• Formosa Lithium Iron Oxide Corporation: A Diversification Challenge of Formosa Plastics Group

Abstract

Formosa Lithium Iron Oxide Corporation (FLIO) produced high quality cathode materials of lithium-iron battery and its production cost was lower than other competitor’s cost. However, FLIO could not effectively increase its sales revenue and faced net loss. In order to change FLIO’s business strategies, Seiko Chen was appointed to serve as the succeeding General Manager of FLIO by FPG. Senko Chen urgently tried to increase sales revenue and built up a research team to develop a new lithium-iron battery. However, a conflict of interest with cathode material customers was appeared when FLIO sold concurrently both lithium-iron batteries and cathode materials.

Keywords: Lithium-iron battery, Cathode material, Business strategy, Conflict of interest