A study on Strategy and Performance of OEM/ODM and OBM Case of Networking Equipment Industry in Taiwan
Date Issued
2008
Date
2008
Author(s)
Cheng, Hui-Ling
Abstract
Taiwan has been known and famous for its OEM (original equipment manufacturer) industry. By the excellent production management and technology, Taiwan gets the very important position in the global supply chains either for traditional industries such as textile and shoe production, or the modem IT industries such as wafer, computer, and electronic components. Mr. Shih, Stan (1992) proposed the Smile Curve concept and pointed out that the enterprises should move toward the both ends of the curve, which presents the high values added fields of R&D and marketing, to survive and develop forever. The subject for enterprises to transform the production process of OEM/ODM into OBM has been paid close attention gradually.n this study, the networking equipment industry is the main research sample. By the multiple regression analysis, the difference of operation performance is investigated in the strategy of OEM/ODM and OBM. The investigated period in this study is from 1998 to 2007. The main empirical results are shown as follows.. Both the industry structure and the firm behavior affect the firm performance：The firm’s asset scale and the growth rate of operating revenue are the important variables. The densities of R&D and marketing fee affect the performance of firms significantly to make profits.. The operating performances of OBM vendors are better than OEM/ODM vendors： The estimated coefficients in the regression model shows the profit rate for the OBM vendors is 18% more than the OEM/ODM vendors in ROA (Return on Assets), ROE (Return on Equity), or net profit margin.. R&D and the marketing strategy are the main factors whether the OBM vendors are able to make profits or not. Therefore, if the OBM vendors can combine the R&D and the marketing strategy, own the leading brands, and spread the products through the marketing channel, then the maximum values of brands would be created. he case of D-Link in our study shows that the most important factor of a successful brand is to create the strong-technology products. Besides, the product positioning and the marketing ability are the key factors also.
Subjects
Multiple Regression Model
Networking Equipment
OEM/ODM
OBM
Performance
Type
thesis
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