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

Exploring Dual Business Model Choice of Brand and OEM Businesses 86 which first highlighted dual business models and the associated synergy creation. First of all, our capabilities-based framework leads to four types of dual BM: brand-reliant, brand- dependent, OEM-dependent, and OEM-reliant. This enriched our understanding of how product suppliers can grow by planning right-fit dual BMs. Second, while our findings confirm the three types of synergy proposed by Lee and Chen (2000), we suggest that balancing long- and short-term outcomes is another critical synergy for adopting dual BMs. Markides (2013) called such a balance an ambidexterity challenge. Including all four types of synergy enhances the practicality of dual BMs. Lastly, given these four types of synergy, our study further identified their order of importance in choosing dual BMs. These provide real-world lessons for decision makers, and collectively make the dual BM decision framework more complete. Despite the usefulness of dual BMs that embrace both own-brand and OEM business, they are not without cost. There will also be various tensions from both inside and outside the organization. Externally, product suppliers may face competitive tension with OEM buyers if differentiation between the supplier’s and OEM buyer’s brand becomes marginal. Internally, inter-departmental conflicts over resource allocation and performance management may emerge due to the different natures of brand operations and OEM execution. Further, engaging in both own-brand and OEM business may reveal inconsistent identity to employees, customers, upstream suppliers and alliance partners. When the impact resulting from the above-mentioned factors becomes significant, value creation from dual BMs is reduced. To successfully operate dual BMs, it is imperative that product suppliers take proper measures to manage potential tensions. In the case of AV-Firm, the CEO explained: “ If conflict is unavoidable between brand and OEM business, we will give the OEM business higher priority in order to reduce tensions. ” The VP of sales added, “ Brand business is time consuming. OEM is project- based and short-term. Without the success of short-term business, long-term business cannot be sustained. ” Consequently, AV-Firm dynamically adjusts the scope of market coverage of its own-brand business, which is subtly accepted by OEM buyers, to reduce potential competitive tensions (Santos and Eisenhardt, 2009). When AV-Firm is no longer regarded as a competitor by the OEM buyer, market conflict is reduced. In addition, AV-Firm formally sends a positive message to OEM buyers and internal colleagues indicating that reducing OEM costs is a higher priority at this stage than brand innovation. Thus, internal tension and conflict are reduced with clear strategic guidance.