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Cited by 29Outsourcing and Supply Chain ManagementGlobal trade, sustainability, and social impactInternational Business and FDI

Survival strategy of OEM companies: a case study of the Chinese toy industry

Chen, Dezhi, Wei, William, Hu, Daiping, Muralidharan, Etayankara·2016·International Journal of Operations & Production Management
DOI 10.1108/ijopm-04-2015-0212
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Abstract

Purpose: Although there have been many discussions on the status and development of original equipment manufacturers (OEMs), theory on how they survive is minimal. Little is known about how OEMs survive and upgrade to other business models, such as original design manufacturers (ODMs) and original brand manufacturers (OBMs), in emerging economies. The purpose of this paper is to extend the theory on the survival path of OEMs from the perspective of emerging countries by examining how OEMs survive cost pressures and upgrade to ODMs or OBMs. Design/methodology/approach: Using a multi-case study method, this study analyzes the survival path employed by OEMs by examining eight firms in the Chinese toy industry. Findings: This study shows that OEMs remain weak in the global toy industry chain due to labor costs. While some OEMs move to low-cost regions, others turn to OBM management, after transitioning through an ODM model, by investing in research and development and marketing. Originality/value: This study explores the survival paths of OEM enterprises, showing that OEMs can first upgrade to ODMs and then to OBMs, or they can directly upgrade to OBMs. Shifting from OEM to ODM is an important step in the transition process, although the contract that OEMs have with their foreign partners does not change significantly.

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Crossref · 10.1108/ijopm-04-2015-0212

Cites

35 of 35 references verified0 citation errors · 0 not checkable

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  • Asian tier 1 suppliers to MNEs and OEMs become GVC lead firms in their own right by shifting production to lower cost locations in the region.

    “For example, Asian tier 1 suppliers to MNEs and OEMs become GVC lead firms in their own right by shifting production to lower cost locations in the region (Azmeh & Nadvi, 2014;Chen, Wei, Hu, & Muralidharan, 2016).”

    From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Chen, Wei, Hu, & Muralidharan, 2016

  • Most studies focusing on GVC suppliers are concerned with upgrading as a performance goal.

    “Most studies focusing on GVC suppliers are concerned with upgrading as a performance goal, as evidenced by suppliers' development of technological and/or branding capabilities, or by their ability to reconfigure activities so as to become lead firms in their own right (e.g., Azmeh & Nadvi, 2014;Buckley 2009b;Chen et al., 2016).”

    From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Chen et al., 2016

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Authors
Chen, D., Wei, W., Hu, D., & Muralidharan, E.
Affiliations
  • Shanghai Jiao Tong University (CN)
  • MacEwan University (CA)
ORCID
Venue
International Journal of Operations & Production Management
Publisher
Emerald
Published
2016-09-05
Volume
36
Issue
9
Pages
1065-1088
ISSN
0144-3577 (ISSN-L)
DOI
10.1108/ijopm-04-2015-0212
OpenAlex
W2516133753
Cited by
29
References
35
Citations by year
2026: 2 · 2025: 3 · 2024: 7 · 2023: 6 · 2022: 3 · 2021: 1 · 2020: 3 · 2019: 3 · 2017: 1
FWCI
2.39
Type
journal article
Language
en
Open access
closed
Licence
www.emerald.com/insight/site-policies (tdm)
Locations
International Journal of Operations & Production Management (publishedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Management Information Systems › Outsourcing and Supply Chain Management
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Global trade, sustainability, and social impact
  • Social Sciences › Business, Management and Accounting › Strategy and Management › International Business and FDI
Keywords
original equipment manufacturers, original design manufacturer, R&D investment, emerging markets

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