National Diamond

(I). Factor endowments

A. Taiwanese Climate、Location、Land、Natural resource

The distribution of tea tree is mainly dominated by the natural environment such as temperature, rainfall, light, wind and soil. It can be cultivated from 40 degrees north latitude to 30 degrees south latitude. The most suitable temperature for growing the tea tree is between 18 and 25 ℃. When the temperature is below 5 ℃, the tea tree will stop growing. When the temperature is above 40 ℃, the tea tree will die easily. Tea tree likes to be wet, the annual rainfall of 1,800 to 3,000 mm, relative humidity of 75 to 80%, an elevation of tens of meters to 2,000 meters; where the atmosphere of the higher relative humidity mountain tea, and more suitable for tea tree growth.

The Taiwan natural environment is suitable for growing high mountain tea. In the area of about 36,000 square kilometers across the island, it occupies 68.7% of the area beyond the contour of the 100-meter contour and about 45.2% of the mountainous area above the 500-meter contour. Taiwan's highland tea plantations, mostly contains a large amount of organic matter, suitable for tea development. If it is enough sunshine duration, the average rainfall area, is the best planting tea place.

Located in the subtropical region of Taiwan, high temperature and rainy weather patterns produce a suitable acid soil for the production of tea trees, which can produce various kinds of green tea, sowing tea, Oolong tea and black tea, making Taiwan the only non-fermented tea, Part of fermented tea and whole fermented tea production areas; as the tea soil quality, climate, elevation and manufacturing methods are different, the quality of tea produced, aroma, taste, throat rhyme varies, the formation of the flavor of Taiwan's tea district Different characteristics of tea, is the world famous tea production areas.

B. Technological know-how

Though most people don't realize it, all types of true tea come from the exact same plant. Everything, from the most robust black tea to the delicate white varieties, starts with the same leaves; the vast differences between tea types reveal themselves during processing.

Although the tea production system in Taiwan originates from Fujian in mainland China, it has become one of the best in the field in recent years after studying and improving the related units in this field. It has gained international reputation in the field of professional production technology of some fermented tea

After two years of research and development, the tea industry has successfully developed the pie cake processing technology. This technique can not only make the various specialty tea in Taiwan into a cake, but also retain the original characteristics of the tea leaf and further enhance the flavor and value of the tea leaves.

C. Skill labor

In order to promote the "safety, health, heritage and development" of Taiwan's tea industry, the Agriculture Commission of the Executive Yuan promotes the quality of tea and enhances the market competitiveness of Taiwan's tea industry. At the Taitung Sub-division of the Tea Industry Reform Branch, Competition ", inviting all the tea districts in the country to select excellent tea chefs (Tea master) for a total of 41 participants in the tea technology competition. Through tea plantation players learning from each other and learning from the experience of making tea, they hoped to be inherited the success of the tea industry.

(II). Demand

"Firewood, rice, oil, salt, soy sauce, vinegar, and tea" are the 7 items considered essential for daily living according to the Chinese. In the previous generation, like grandpa, grandma, dad and mom, they drink tea every day. Tea is a daily drink for people in Taiwan, every household have tea set. People drink tea when they talk business, and this situation focus in central and south of Taiwan. Nowadays, tea still occupy an important position. However, as we know that young people don’t like

“tea” as the people like in past time except for whose family still maintain the habit of drinking tea. They don’t like bitter and acerbic(澀味) of tea, so tea with sugar in tea shop is popular. Also, because the introducing of coffee culture, people like to have a cup of coffee in tea time. Therefore, everyone used to have a cup or a bottle of drink a day, it is now form a drink culture. We all know there are many tea shops in Taiwan and they are in hyper competition. Furthermore, Taiwanese love diversified drinks, so there are developed various drinks in beverage market. Although we have many tea shops everywhere, it is a common phenomenon that people are lazy. In addition, this situation become more and more serious. Therefore, it bring instant drink become more and more popular. In 2015 Carrefour statistic, instant drink occupy more than 40% in total performance and the selling of instant drink will increase in winter obviously. And why people love instant drink, the reasons already showed on 2016 big data. There are three reasons: eutrophic(營養豐富), tasty, and easily make.

Surprisingly, female around 40-49 is the major consumers. According to the first reason- eutrophic, maybe we can infer that this data is focus on healthy instant drink.

Base on collected data of Carrefour, there are 3 billions of business opportunity of instant drink. Some studies showed that few people can classified the quality of instant drink, so what they want are taste. Furthermore, as mentioned here, Taiwanese love diversification. That make various flavors and types of instant drink in the market.

Therefore, to meet multi-variated tastes of consumers that Taiwan instant drink industry always make effort on creating new instant drinks.

(III). Firm strategy, structure, and rivalry A. Strategy

Be confronted with lots kind of brands, how 3:15PM to overcome is a big question.

First they need to strengthen themselves. First, they set up their own unique culture.

Adhere to have natural producing and launch out different series to customers.

Choosing differentiation strategy and then they insist on one thing “Just in time”. It means they will evaluate how much their dealer can sell and then decided to produce how much output in order to have lots unsalable products.

B. Structure

Because this entry obstacle and cots are lower than other industry. Also you don’t need lots capital so that everyone want to join then their competition is fierce. But if want to live in this kind industry, we need to continue to innovate or it is easy and fast to be eliminate here.

C. Rivalry

200 years ago, the ancients brought tea species from Fujian. We are already became a famous area of producing tea leaves. Included black tea, green tea, oolong tea, oriental beauty tea and so on… According to statistical information, the markets still keep growing and the output or consumption increase gradually. Each area in Taiwan have their different environment or skills, they provide many kinds of tea related products.

Brands emerged constantly like mushrooms. Especially Taiwanese pursue

convenience so that instant drinks are very popular. Exceed thousands choices we can choose. Therefore, business men think they have market in instant drink industry they come fast and result to fierce competition.

(IV). Related and Supporting industries

A. Upstream - The unique skill of manufacturing and producing tea leaves.

From the cultivating, researching, planting to picking tea leaves, all need to rely on professionals or special machine. However, compared with other, Taiwanese tea skills and machines are better.

B. Midstream – Small and medium-size tea factory.

It refers to all manufacturers that related to tea processing, tea packing. Those

economic benefits will help them to save the market profit and improve the additional value of tea leaves. It also can provide experiences to upstream factories so that improve R&D and product to meet the market demand.

C.

Downstream – Tea shop and related retail stores

Now we already have lots paths of shopping such as retail stores, online and so on.

There are some competitions so that traditional tea store will have less economic benefits. If the tea brand dedicated to all streams, they can get more permanent business.