Key success factors in transforming traditional family business for success and long-term survival in changing markets

Abstract

Most of family-owned enterprises start their operations in the traditional businesses such as manufacturing, trading, or providing services. Some of them are very successful and become major global players in the industries, for example, SC Johnson, Coming, and Li & Fung. However, technological changes often have impacts on the behaviors of the market. New technology can add tremendous capacity for a firm to pursue economy of scale or it can reduce marginal cost to zero. Moreover, in the globalization era, multinational companies expand their business territories by entering to the new markets. They exploit the advance in technology, which allows them to provide better products/services than those of local firms. Technology becomes key driver for the increase in competition in the market because the firms that adopt the technology tend to have competitive advantage over firms that did not. It also drives customers to demand more comprehensive products and services. In order to survive and be forefront in the industry, these family firms need to transform themselves or adopt some technologies to enhance and regain their competitiveness. Not all companies realize the importance of doing so or know how to do so. But still, there are some companies that are able to transform successfully. This thesis will analyze keys to success for these family businesses in transforming themselves to maintain competitiveness in changing markets.