Successful mergers; penetrating core markets

Following the launch of its Gobo brand in China in 1985, Globe Union established the Danze brand for high-end products in the US in 1999. But president Ou-yang Ming clearly understands that mergers and acquisitions are the only sure way to grow quickly in the shortest possible time. Therefore, in order to ensure that Globe Union was not limited to offering only faucets, but could provide a full range of bathroom fixtures, the company purchased the traditional US porcelain company Gerber.

According to Ou-yang, a brand must penetrate a core area in order to enter a new market, otherwise it cannot become a leading brand. In order to make headway in the sanitary fixture market, Globe Union acquired Gerber for its ceramic production technology. Globe Union then took advantage of Gerber's experience in the traditional bathroom fixture market to enter the core US traditional channel, which is the wholesale market.

Learning from mistakes

But the merger wasn’t as helpful as Globe Union had anticipated, and the company spent three years puzzling over the nature of the industry. Since Gerber used local clay to make its ceramics, and the clay affected mold firing time and shrinkage, manufacturing operations turned out to be far more complicated than expected. Training workers alone took more than six months, and improving the acceptance rate also took around half a year. Losses continued after the acquisition of Gerber, and Globe Union had to rely on the sales of its original faucet products to compensate for the loss. The company didn't give up, however, and its R&D efforts finally achieved success after repeated attempts. Globe Union ultimately became stronger from the experience, and even drafted a set of standard operating procedures for mergers.

After completing deployment in North America, Globe Union expanded into the Chinese market by acquiring Taiwan's Li She in 2006, and then entered the European market by acquiring Britain's PJH in 2007. After eight mergers in ten years, Globe Union has now established a global operations framework. Globe Union currently has 13 brands, including Gerber and Danze in North America, Lenze in Europe, Gobo in Asia, and AEB in South America. These brands each have their own price levels and channel positioning. In particular, Globe Union's own Danze brand encompasses high-end, high margin products; the company hopes that Danze will find favor with consumers worldwide and become a global brand.

Respected quality and innovation

Globe Union possesses a vertically-integrated production system, and continues to invest in research and development, which has been the key to its swift growth and success. "We emphasize quality and therefore take extreme care in each production process," said Ou- yang Ming, "and we use the most advanced technologies to provide customers with innovative, high-quality, reliable, and durable products."

As a result, Globe Union's products, technologies, and production processes have received numerous domestic and international certifications. It was awarded the MOEA's "Outstanding Exporter" award in 1980, America's "IAPMO" international product quality certification in 1986, and Canada's "CSA" international product quality certification in 1988, ISO-9002 quality certification from Intertek Testing Services in 1995, Canada's "CSA" laboratory certification (making it the first company in Asia to receive this certification) in 1995, BSI's ISO-9001 quality system certification in 1997, America's NSF certification in 1998 (making Globe Union the first company in Asia to receive this certification), America's "IAP-MO-Third Party Witness" testing laboratory certification in2002, CNS 1268 and ISO-90012000 certification, and the MOEA's "Corporate Operations Headquarters" certification in 2004.

The emerging brand

Apart from the foregoing honors, Globe Union was granted the first Rising Star Award in 1, the Company Brand and R&D Award in 2002, and the Output Contribution Award in 2003 and 2004. Finally, on the basis of its brand strength and compound growth rate, Globe Union was granted the "Emerging Brand" award for the most promising brand apart from Top Taiwan Global Brand in2 007.

“Although Globe Union could only achieve a 5% profit margin, at very best,” said Ou-yang Ming with a laugh, “its profit is dozens or even hundreds of times better now that it possesses a stylish brand.” Globe Union has shown that the only way to ensure profitability and growth is to create a company brand and brand value, or even become a channel company.

Brand meaning Keeping up with fashions; expanding channels

Globe Union began as a small trading company with only four desks and two telephones in 1982. But because it wanted to produce products better than those of other companies, President Ou-yang Ming was determined to start building on his company's faucet business. After starting out in what many people thought was an insignificant faucet market, Globe Union has now become the world's fourth largest sanitary equipment manufacturer, and is the biggest faucet manufacturer in Asia.

Globe Union started out with only four or five employees and without any distinctive products. Because he realized that a company like this couldn’t possibly enter major markets, Ou-yang Ming decided to produce a single-handle hot- cold mixing faucet. Although this faucet proved to be difficult to manufacture, it was an entirely new product in Taiwan, and therefore Globe Union started off producing such kind of faucet.

"I wanted to conquer the world market with this type of faucet, and I never expected that I would be brought to court even before the faucet had ever reached the market," said Ou-yang. At that time, an American corporate group happened

to see Globe Union's unique single-handle faucet at a US household products trade show, and initiated a lawsuit against the Taiwanese company. Heaven is merciful to those in distress, however, and Globe Union won the suit, which instead gave Globe Union considerable publicity in the United States. Americans like to see the underdog win, so they cheered when a small Taiwanese company surprisingly vanquished its large opponent, thus creating widespread recognition of Globe Union.

While a brand is meant to attract consumers and win their loyalty, Globe Union's products are durable goods, and aren’t actually purchased very often. In contrast, channel firms purchase  the company's products on a regular basis. But every time a builder or designer purchases Globe Union's products, the more likely they are to purchase them again. Although they are not end users, their use of Globe Union's fixtures is very meaningful.

"Besides developing our own channels in order to maximize the potential of our brand," said President Ou-yang, "we had to make our product line even more appealing in order to effectively establish the right channels, at the same time keeping up with product trends, new functions, and new technologies to win consumers' trust."