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

Exploring Dual Business Model Choice of Brand and OEM Businesses 64 benefit between supplier and buyer can be realized. They are product/service innovation potential of the focal product line and segment-making capabilities with respect to the buyer’s target market. Product/service innovation potential attempts to estimate the value and market size OEM products can generate in the current competitive landscape, while segment-making capabilities evaluate the comparative assets suppliers’ own-brand business can earn with similar products in the same market. With these two variables, decision makers are able to choose dual BMs. Our research found that decision makers devote significant effort from an outside-in view to exploring target markets’ product/service innovation potential. There are three metrics underlying the assessment of innovation potential. Dominant design wins the allegiance of the marketplace when a focal supplier owns key product features that have become the de facto standard which all players must adhere to. Technology standard follows an industrial committee for a de jure standard platform/protocol, providing a mechanism based on the assumption that focal suppliers can create limited innovation. Entry barriers are existing obstacles established by a supplier that restrict competitors from entering a given market. In addition, our research also found that, anticipating threats from buyers, decision makers tend to focus from an inside-out view to explore the target market’s segment- making capabilities. Decision makers delineate the perimeters of their brand activities to form their own niche marketplaces (Santos and Eisenhardt, 2009). Three metrics underlying the assessment of segment-making capabilities are: product novelty , which creates a disruptive product/application through engineering breakthroughs, significantly changing existing features or creating a new product to fill a niche, channel bonding , which constructs durable trade relationships by providing a non-replaceable service that locks in resellers and secures repeat orders, and marketing execution , which uses targeted activities to establish market leadership. In the following sections we will elaborate on how these metrics can be applied to dual BM selection within the context of our seven case studies. In addition to the product information shown in Table 1, we summarize buyer information and OEM business status in Table 2.