臺大管理論叢 NTU Management Review VOL.29 NO.1

55 NTU Management Review Vol. 29 No. 1 Apr. 2019 Such contractual services usually require buyers to commit to a certain supply volume in order to gain scale economies and hence provide cost advantages in manufacturing and operations. The competitiveness of OEM BMs hinge upon product quality, costs, speed, and flexibility of delivery as well as associated services provided to buyers. Although the profitability level of OEM BMs is determined by sources of alternative supply, once engaged the business return is more predictable than that of brand BMs. In addition, when providing OEM business to world-class brand buyers, suppliers have a great opportunity to learn advanced technological and operational knowledge, which in turn improves suppliers’ capabilities. With this understanding of the distinctive nature of and trade-offs between brand and OEM BMs, we will switch gears to discuss the extent and feasibility of adopting both types in one company, which is the focus of our research. 2.2 Dual Business Model Research on BMs has received increasing attention in the extant literature (e.g., Zott et al., 2011). In addition to discussing the essence of BM design and the strategic implications of BM choices, scholars also pay special attention to cases where companies undertake multiple brand strategies for particular products in different market segments (Markides, 2013; Markides and Charitou, 2004). For example, Nestle owns Nescafe and Nespresso in the coffee market, with Nescafe serving as an instant coffee provider for the mass market and Nespresso positioned as an upscale brand. Generally, by operating more than one brand at a time, suppliers can forestall potentially disruptive BMs (Christensen, 1997; Velu and Stiles, 2013), crowd out competitors in their current market, penetrate new markets, create synergistic effects for new and existing models by making more efficient use of common resources, and generate new income streams by operating in tandem (Casadesus-Masanell and Tarzijan, 2012). However, research also indicates that to ensure multiple BMs can work in a single organization, it is essential for companies to manage internal conflicts, as each BM has its own tailored resources and incompatible activities (Markides and Charitou, 2004). Differing from multiple brand BMs, BMs that involve both own-brand and OEM business, which we call dual BMs, have received less attention in the extant literature. However, they are increasingly important due to the rise of offshore outsourcing and market globalization (Alcacer and Oxley, 2014). Product suppliers that implement dual BMs simultaneously launch own-brand business with channel resellers while providing