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

Exploring Dual Business Model Choice of Brand and OEM Businesses 76 Thus, AV-Firm chose an OEM-dependent dual BM from 2010-2015, with 42% of its average revenue generated by brand and 58% from OEM (see Figure 2). 4.2 Toward a Model for Decision Making The strategic fit between the product/service innovation potential and segment- making capabilities is important. In the previous section, we described how decision makers chose dual BMs. Now, we will illuminate the reasons underlying the results shown in Figure 2. For document cameras, AV-Firm was the first mover in the K-12 market, with around 4 million classrooms in the US and Canada compared to 500,000 classrooms in universities. AV-Firm had the potential to become a dominant player and create entry barriers. Alpha, the OEM buyer, had its own leading position in the interactive white board business, with much higher revenue than AV-Firm (see Table 2). It was not in Alpha’s interest to fight for the camera business. Thus, AV-Firm chose a brand-reliant dual BM for the document camera. For PC-TV tuners, AV-Firm was the first mover to choose the high-potential PC peripheral retail market, and it gained a leading position in the brand retail market. However, due to (1) the increased popularity of PC-TV applications in the laptop market with preinstalled tuners fueled by PC makers’ dominant marketing power, (2) the impact of mobile devices on PC business, (3) the replacement of analog TV with IP-TV, and (4) built-in tuners in non-PC devices such as set-top-boxes, its dual BM has evolved from brand-reliant, to brand-dependent, to OEM-dependent, to OEM-reliant. For network video recorders, AV-Firm was a late mover to the security industry, and many segments had already been occupied by major players. Although the industry had high potential, it was hard to have strong segment-making capabilities because AV-Firm only provided tailor-made services for system integrators. In contrast, Gamma focused on its resellers’ distribution market. Thus, AV-Firm chose an OEM-dependent dual BM. In video conferencing, AV-Firm was a late mover, while two dominant players occupied over 80% market share. So, AV-Firm found and served a virgin market segment-- SMBs-- which had limited market demand. AV-Firm approached these dominant players but no deal was struck as they had far more proprietary technology and no pressure to cost-down. Also, Beta faced fierce challenges from these two players, leading to small sales volume. In theory, with low potential and weak capabilities, AV-Firm should have chosen the OEM-reliant dual BM. Instead, AV-Firm chose a brand-dependent BM. This caused losses as volume was too low and R&D costs were too high.