The business model and innovation mix in the transition of contract manufacturers in the greater China region

Tung-Fei Tsai-Lin, Hui-Ru Chi and Yuan-Chieh Chang

Asia Pacific Business Review, 2021, vol. 27, issue 3, 444-469

Abstract: Many contract manufacturers’ successful transition from original equipment manufacturers (OEM), original design manufacturers (ODM) to original brand manufacturers (OBM) is typical for studying latecomers’ business model transitions in emerging Asia. This study uses data from two industrial innovation surveys (2004–2006 and 2007–2010) in 14 cities located in the Greater China region to describe the innovation practices followed in different business models and the transitions. The results show that OEM latecomers undergo organizational changes in the transitions. ODM entrants have to enhance product innovation and market promotion, and OBM entrants must tailor their organizational and marketing practices. This paper concludes that the business model transition is the matter of firms making an effort to retool their innovation mix for realizing a new value proposition in a specific business model. Theoretical and managerial implications are suggested.

Date: 2021
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DOI: 10.1080/13602381.2021.1894844

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