A COMPARISON STUDY OF MULTINATIONAL OIL COMPANIES’ ENTRY STRATEGY IN MOTOR FUELS RETAILING MARKETS IN TAIWAN AND CHINA
Date Issued
2005
Date
2005
Author(s)
YEH, Yang-Shan
DOI
zh-TW
Abstract
The petroleum market in Taiwan has been gone through deregulation procedure as its own schedule. China committed in entering WTO to open its motor fuels retailing market for foreigners’ participation in end of 2004 and scheduled to further open its fuels wholesale market in end of 2006. Many multinational oil companies express strong interests in Chinese motor fuels retailing market. They aggressively participate in Chinese motor fuels retailing market and make different progress. According to current Chinese economic size and economic growth rate, the estimation of crude demand will continually tremendously increase in the future. The efficiency of the entire petroleum industry attracts a lot of attentions from the public, especially in the trend of the rising crude price.
This study is to understand (A) the Taiwanese and Chinese petroleum industry policies and the latest motor fuels retailing market environments, (B) the causes of the petroleum market deregulation and the schedules, (C) the privatization procedure of local national oil companies, and (D) the cases of multinational oil companies’ motor fuels retailing market entry strategy in Taiwan and China.
Through reviews of the choices of entry mode by the multinational oil companies in entering the Taiwan and China motor fuels retailing markets in different stages of the deregulation and the strategies of the local national oil companies under the pressures of company privatization in the responses of multinational oil companies’ motor fuels retail market entry, this study concludes that;
(A) It will enhance the stability of motor fuels retailing market prices in Taiwan that the motor fuels suppliers operate more retail stations in the market. And this study does not anticipate there will be any wholesales price war in China upon wholesales market is opened in 2006 since the fuels pricing is constrained by regulations in China.
(B) Taiwan’s petroleum market was deregulated as its own planned schedule, while China was opened its fuels retailing markets per the commitments of WTO entry. There is quite huge difference in the deregulation time frame between Taiwan and China. And there are no regulated retail motor fuels prices currently in Taiwan, while there are directive fuels pricing mechanisms in China.
(C) The privatization pace of national oil companies is different in Taiwan and China. The labor union in Taiwanese national oil company has strong influences on the progress of the company privatization. And there are no disadvantages in retail and wholesale motor fuels market competitiveness for national oil company according to CPC’s experiences, no matter the national oil company is privatized.
(D) The multinational oil companies, with the same criteria, will select the countries with larger market size and higher market growth rate to be the market entry candidates. And most of multinational oil companies, with less than 50% equity, form joint venture companies with the local national oil companies to develop the joint-brand retail networks in China.
Subjects
汽柴油零售市場
石油市場解除管制
民營化
進入模式
Motor fuels retailing market
Petroleum market deregulation
Privatization
Entry mode
Taiwan
China
SDGs
Type
other
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