The dilemma of original equipment manufacturers (OEM) in China: To brand or not to brand

Abstract

The objective of this paper is to understand how the OEM company shape its manufacturing strategies in times of stressful industrial upgrading. Chinese small and medium-sized manufactories mainly play an OEM, ODM role in the global value chain. Recently, they are suffering from rising production costs and intense competition from emerging manufacturing industries in Southeast Asia countries. The profit margin of Chinese OEM manufacturers is squeezed, inducing the transformation and upgrading of China's traditional manufacturing industry is necessary and urgent. Following the multiple-case study, onsite studies, and primary data analysis has been applied for this research. Documentation, observation, and primary data collection are carried out through in-depth interviews and after that utilized for developing five company cases. The study findings reveal the OEM company's vision, strategy, tactics, and forecasting related to future market trends. The paper would provide a useful direction to OEM Manufacturing in China for its strategy developing during the industrial transformation and upgrading.