Grand Hall Readies For Grand Slam Growth in 2003

At a time when both high-tech and traditional industries are suffering from disappointing profits, Taiwan's Grand Hall Company, which sells outdoor gas grills, outdoor heaters, and gas valves under its "Globe Café" brand, has been enjoying a banner year with impressive growth and stable profits.

Over the past few years the company has been growing at 30% annually, according to William Home, president of the company, and there is no sign of slowing down this year.

Grand Hall estimates its sales last year at NT$6 billion (US$171 million at US$1:NT$35). With a payroll of 55, this equates to generation per employee of more than NT$100 million (US$2.86 million) in sales last year.


King of the Counter


Grand Hall claims it is seen as the "king of the over-the-counter market" in Taiwan, due to the fact that it is the most profitable firm on the bourse. The company's stock traded at NT$189 (US$5.4) late last year.

Established in 1976 with a capitalization of only NT$1 million (US$25,000 at US$1:NT$40), Grand Hall has grown into an NT$470 million (US$13.4 million) company today. The company had pretax profits of NT$920 million (US$26.29 million) in the January-November period last year, and its cash reserves have grown to more than NT$600 million (US$17 million).

Over the past four years the company had an EPS of NT$5.4 (US$0.154), NT$4.4 (US$0.125), NT$6.8 (US$0.194), and NT$9 (US$0.257), respectively, and it expects to achieve an EPS of at least NT$16 (US$0.457) this year.

Currently Grand Hall, the second-largest gas-grill manufacturer in the world by sales value, has a 6% share of the gas-grill market in North America. All of its current buyers, says the firm, plan to increase their orders this year. Char-Broil, which is a major vendor of low- and mid-market gas grills, will also enter into a cooperation deal with Grand Hall; the deal could expand Grand Hall's market share in North America by another 3%.

Last year the company sold 650,000 gas grills, accounting for 7.65% of the global market.

This year, Grand Hall will introduce a series of water heaters and indoor gas grills. The water heaters have all already passed the certification programs of its customers.

Between new customers, new orders, and new product lines, the company expects to achieve sales of US$1 billion by 2010.


Original Ideas


Home attributes the success of his company to its original-idea marketing strategy. When the company entered the gas-grill market 27 years ago, Home realized that Grand Hall had to sell gas grills designed with features not offered by other competitors. When other suppliers were selling square-shaped gas grills, Grand Hall differentiated its gas grills with a round exterior design. As other suppliers began adopting this innovation, Grand Hall continued to pioneer with the introduction of gas grills with racks. When the rack design was copied, the company again differentiated its gas grills with casters.

In order to constantly come up with new product concepts and ideas, Home often stays at farms or ranches when on business trips to North America so he can see how consumers use gas grills and thus better understand the needs of his customers.

The understanding of consumer habits enables Grand Hall to continually generate new product features tailored to meet the different requirements of its major customers. This commitment to innovation means that customers do not have to spend money on developing their own special brands and products. The company is also careful to differentiate its products and brands to minimize competition among its various customers.

This strategy has helped Grand Hall develop close and stable relationships with its customers, which in turn has been a key to the company's growth. Grand Hall maintains long-term relationships with large retail-sales chains including Wal-Mart, Sears, and Char-Broil, as well as with other large chains in the United States and Australia. Each order from these retailers is usually valued at more than US$10 million.

Good customer relationships also enable the company to steadily boost its market share in its major markets. This year the company expects to increase its share in North America from 6% to 9%, as explained above. Its market share in Australia is expected to grow from 50% to 75% this year, according to Home, as a result of a collaborative marketing initiative with a business partner.

Grand Hall hopes to achieve this ambitious expansion in part by broadening the range of products it sells. In the past it focused on high-end gas grills made of enameled steel, stainless steel, and granite, priced from US$199 to US$5,000. In order to increase its market share the company will now also offer medium-priced gas grills.