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

Exploring Dual Business Model Choice of Brand and OEM Businesses 56 contractual manufacturing services to OEM buyers that own their own brands (Lee and Chen, 2000). Hence, dual BMs are more challenging than BMs containing multiple brands, as the relationship between suppliers and buyers is both collaborative and competitive. That is, focal suppliers collaborate with OEM buyers to ensure satisfaction with the quality and cost of supplied products (Luo and Rui, 2009), while potentially competing with them through similar products under their own brand name. Interestingly, despite tension from competition, dual BMs are becoming popular in many industry sectors and have been adopted by established companies. For example, Logitech, a leading PC peripheral brand company, generated around 10% in average of its total revenue from its OEM BM during 2002-2013 by working with famous companies like HP and Apple. Also, Giant, the world’s leading bicycle producer, generated around 30-40% of its revenue during 2010-2015 from its OEM services. Some scholars indicate that several suppliers learn best practices while supplying major branded firms globally and parlay their OEM experience into positions as vital branded name players (Alcacer and Oxley, 2014). While real examples exist, it is unclear why suppliers choose dual BMs. Lee and Chen (2000) proposed a competence-based framework based on the practices of many Taiwanese information technology companies, in which dual BMs are used to realize synergistic value creation for suppliers. They suggested three major sources of synergy: the resource pooling effect; due to commonalities in product development and manufacturing, the cross-signal effect; which attracts buyer companies of a higher tier, and organizational learning effects from supply fulfillment and market exploration. However, they assumed that the synergy generated could sustain implementation without considering how appropriate dual BMs are chosen. They also did not address what types of synergy primarily motivate the decision. Moreover, extant literature shows conflicting views on the sustainability of dual BMs. Alcacer and Oxley (2014) stated that dual BMs could be sustainable when there is a clear strategic direction and proper management of both the means and motives for potential buyers. In contrast, some research has cast doubt on their sustainability for several reasons. First, suppliers and buyers may compete in external markets with similar products under their separate brand names if both aim at the same market and have similar product positioning (Lee and Chen, 2000). Hence, OEM buyers can become concerned about leakage of their business secrets to suppliers’ brand businesses (Arru ada and Vánquez, 2006). Therefore, buyers may undertake a multiple sourcing policy to bolster