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

Exploring Dual Business Model Choice of Brand and OEM Businesses 72 technical director described: “ AV-Firm’s knowledge of competitors is excellent. The main reason is its products have special features based on the study of market’s unstated needs. Its effective pricing program is above average and gives us enough profit for winning big projects. ” Beta focuses on big companies; however, it cannot compete with leading branded firms like Polycom and Cisco. Thus, Beta’s sales volume is not large. For this product, AV-Firm has low product/service innovation potential (see Table 3). The dominant design is low as Polycom and Cisco occupy 80% market share and created several proprietary features embedded only in their own devices to avoid competition. The standard communication protocols limit room for innovation. Further, they have locked in many users to form entry barriers, as they are the default referents in this industry. AV-Firm also has weak segment-making capabilities for this product. AV-Firm’s products provide limited new features, and they cannot satisfy the requirements of large companies that need more advanced features. AV-Firm has relatively weak customer-linking capabilities. As a new vendor in this market, the slow tempo, long transaction cycle, and its low brand awareness are unfavorable to AV-Firm. The president described typical business practices: “ Traditional channel resellers need months to make a sale. They need to promote their products to arouse user interest, then demo them and put them in users’ sites. Users may return products or ask for an extra demo. Our profit margin doesn’t permit our resellers to do this. Beta sells other facilitators to expand its application coverage and lock in customers. But, we just sell a simple package as a one-time only business. ” AV-Firm promoted its own brand mainly to the SMB market, which was still emerging. It spent significant effort gaining acceptance by users through pricing and advertising. The BU head explained: “ Price is still SMBs’ main concern. Beta cannot support SMBs’ inexpensive price needs. We support our resellers with a margin appropriate for penetrating SMB markets. We serve small projects, but Beta only supports big projects. ” Previously, AV-Firm chose a brand-dependent dual BM from 2014-2015, with 62% of its average revenue generated by brand and 38% from OEM (see Figure 2). However, according to our explorative model, it should have chosen an OEM-reliant dual BM. This discrepancy will be discussed later. 4.1.3 PC-TV Tuner (1999-2000) ─Brand-Reliant Dual Business Model Business Background: Around 1993, AV-Firm was the first company to design a PC-TV tuner product and sell it to end users through retail markets (see Table 1). After