Go Branding or Not: Institutional and Organizational Determinants of Branding Decision in Taiwan's IT Industry
Date Issued
2012
Date
2012
Author(s)
Roy Simpson II, Eugene
Abstract
Contract manufacturing, due to their scale-based advantage, contributes significantly to the industrial development in Taiwan for the past several decades. In light of the control of most of value added at the hands of branded companies and the mounting pressure to create value for shareholders, contract manufacturers have come to a watershed: sticking to OEM/ODM, or moving to OBM. However, there have been more failures than few successes in the pursuit of branding, and many manufacturers have chosen to focus on manufacturing only with company branding instead of product branding.
Although strategy research and marketing literatures have long emphasized the need of moving downward the value chain and building brand(s) as a intangible resource for competitive advantage, it remains elusive why only a handful of Taiwanese manufacturers chose to brand their products while others prefer to brand their companies only? This paper is an attempt to respond to the puzzle by revisiting the branding decisions from different theoretical perspectives.
Based on the research of three large and well known ICT companies in Taiwan (BenQ, Quanta and HTC), this study argues that profit-driven motive and customer-compelled force jointly work on the branding decision. Evidence also shows that organizational factors, such as executives’ strategic intent, the pool of competences, firm age, relate more to the branding decision and the transformation outcome (if the firm chooses to brand itself) than the external factors, such as government intervention or customers coercion.
Subjects
Manufacture (MFG)
Original Equipment Manufacturer (OEM)
Original Design Manufacturer (ODM)
Original Brand Manufacturer (OBM)
Institutional Theory
Firm Orientation
Strategic Intent
Type
thesis
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