|
The profits of OEM/ODM model in the traditional manufacturing industry are very low and show a decreasing trend. There are mainly two strategies taken by the OEM/ODM manufacturing industry to gain profits. One is to keep pursuing higher revenue with the economies of scale or scope, which will however obtain quite low gross profit margin. This kind of enterprise will have very low probability to gain profits if it fails to get into the top five in the market of the industry. The other is to jump out of the traditional OEM/ODM model and transform to establish the hybrid operation model combining the OBM and OEM/ODM. Considering the uncertain factors that affect the OBM revenue, this kind of enterprise still retains the OEM/ODM businesses to support the brand operation. Moreover, in terms of the revenue, it does not only pursue the continuous growth, but also concerns the increase of the gross profit margin. The purpose of this operation model is to achieve the sustainable operation of the enterprise. The primary purpose of the paper is to explore the troubles confronted by the hybrid operation model of OBM/ODM/OEM transformed from OEM/ODM model based on the study subject of A case company. First, the OBM business growth has conflict with the old OEM/ODM system in the enterprise. Second, for the sake of the differentiation competition against the competitors in the global marketing, the product types and features are diversified, which requires more development/manufacturing manpower. As a result, the rapid organizational expansion brings internal problems to the enterprise. Third, in terms of the product development strategy, in order to gain the business opportunity in advance, the case company works with the local manufacturers to develop products in the global areas. Such decision also increases the costs of product design or maintenance. In the case company, the business decision-making hierarchy is transformed with the organizational structure adjustment, the outsourcing design and the design strategy, so it can cope with the demands of different business models in OBM/ODM/OEM at an optimal scale. In this way, the enterprise can optimize the operation to achieve the sustainable operation. The paper employs Harvard case-based writing method, including two parts of the case and the teacher’s reference manual. The teacher’s manual illustrates the discussion of the case in details. The major topics include the systematic thinking, organizational design and strategic outsourcing, which are conducted with literature review and the case analysis respectively. It is expected to achieve the purpose of combining theory with practice.
|