The Evolution of OEM, ODM, and OBM Business Models

Young Won Park (), Geon-Cheol Shin () and Kyung-Soo Lee ()
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Young Won Park: Saitama University
Geon-Cheol Shin: aSSIST University
Kyung-Soo Lee: COSMAX

Chapter Chapter 1 in Original Brand Manufacturing Business Model, 2025, pp 1-24 from Springer

Abstract: Abstract This chapter examines the evolution from Original Equipment Manufacturing (OEM) and Original Design Manufacturing (ODM) to Original Brand Manufacturing (OBM), focusing on how firms—especially in the cosmetics industry—strategically shift toward higher value creation. OBM enables companies to own branding, customer relationships, and innovation, moving beyond low-margin production to more differentiated and sustainable business models. The transition is not linear but shaped by hybrid strategies, digital tools, leadership vision, and institutional support. Empirical cases like COSMAX illustrate how firms integrate R&D, design, and digital marketing to build brand equity. The chapter draws on global value chain theory and dynamic capabilities frameworks to explain how firms develop OBM competencies through organizational learning, cross-functional collaboration, and innovation ambidexterity. East Asian firms exhibit diverse paths: Korea leverages strong industrial policy and K-beauty branding, Taiwan adopts hybrid ODM–OBM strategies, while Vietnam faces capability-building challenges amid policy reform. The cosmetics sector provides a rich setting to study OBM because of its fast-changing trends, regulatory complexity, and consumer-driven innovation. This chapter lays the foundation for understanding OBM as a strategic reorientation—one that redefines value creation in the digital, consumer-centric, and sustainability-oriented economy.

Date: 2025
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DOI: 10.1007/978-981-95-0253-0_1

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