On the other hand, if the product life cycle is shortened, the mental loss of enterprises investing in production equipment will inevitably increase. In order to reduce the opportunity cost, OEM is widely used for production, which cannot be said to be a strategy to make full use of external resources. Economic competition is more and more spread all over the world, and brands and channels are playing an increasingly important role in the final value of actual goods. The annotation of the original manufacturer's bid under OEM mode just illustrates the importance of this point.
In the economic competition, people are more and more aware of the importance of brand, because only by establishing a good image among consumers can we win the support of more marketing channel partners and make products penetrate into a wider consumer group through joint efforts with channel partners. For this reason, many multinational companies with good business performance have been paying attention to the construction of brand image and marketing channels. Therefore, making full use of OEM to push mature products or products that other enterprises have production advantages to their own marketing channels and win a wider range of consumers by using their own advantages in value-added services can also be called "borrowing chickens to lay eggs". In the era of information economy, the division of labor is becoming more and more detailed, new products are emerging one after another, and the high-tech content is gradually improving. It is impossible for final consumers to judge the applicability of products by their scientific and technological content, because they need all-round services based on solutions. In a sense, modern enterprise competition is to assess the ability of enterprises to find consumer needs and provide them with comprehensive solutions, and the importance of a single product is gradually decreasing. The real problem is how to meet the increasingly complex and personalized consumer demand.
OEM puts forward a good way: based on its own proprietary technology, the enterprise integrates into other products produced by OEM to provide customers with solutions suitable for their own needs, which not only promotes the development of the enterprise's own technology, strengthens the influence of its own brand, but also enables customers to obtain more comprehensive, timely and thoughtful services from comprehensive solutions. On the other hand, OEM enterprises have also developed under the impetus of enterprises, which fully embodies the principle of rational allocation of resources. In addition, OEM can allocate limited internal resources more effectively, minimize management levels and improve management efficiency. Compared with the buyer, the supplier is in a relatively passive position, however, it is still profitable to adopt OEM.
1. Enter the international market and participate in international competition.
Competition in domestic household appliances and other industries is becoming increasingly fierce, and the market tends to be saturated. Some domestic manufacturing enterprises do OEM work for foreign brands in order to open up the market. Enhance the global awareness of enterprises.
2. Large-scale production, reducing costs
Economies of scale generally exist in modern production, that is, with the expansion of output scale, the unit cost tends to decrease. This may come from the deepening of specialization and the distribution of fixed costs. If the enterprise itself has this overcapacity, the effect of cost reduction will be more obvious. Participating in OEM supply means the expansion of output scale, which not only increases product sales, but also reduces costs.
3. Learn from experience and improve management level.
Enterprises that provide OEM often play an important role in the product supply chain of OEM buyers. OEM buyers can have strong strength in production management, marketing and product development. In the process of cooperation, OEM suppliers can organize production according to the requirements of the buyer in terms of product quality control, cost control and operational efficiency control. With advanced organizational control, we can accumulate experience from "learning by doing" and improve the management level of enterprises.
4. Product innovation, enhance the ability
If OEM products are innovative products, suppliers can not only meet the needs of buyers, but also sell them in domestic and foreign markets under their own brands. Or increase the length of the product line and launch new products; Or deepen the depth of the product line and increase the variety of existing products, which will increase the competitiveness of enterprises in any way.
For buyers and sellers, OEM mode not only enjoys the overall competitive advantage of products, but also has the most distinctive advantage, that is, the flexibility of buyers and sellers inside and outside the market. Either party can terminate the contract at any time as long as it finds a more profitable way. From this perspective, the OEM market is efficient.
5. Save sales investment
When enterprises face foreign markets, it is difficult to establish a completely independent circulation network because of the vast territory and different business habits in different countries. But it will be much more convenient to borrow the sales force of foreign companies. For example, Fuji, Ricoh and so on. OEM is adopted for its manufacturers and brokers in Europe and America, which reduces the friction in the business process, reduces the large amount of sales funds that enterprises should have invested, and enables enterprises to adapt to overseas operations.
Most enterprises engaged in processing, production and export in China have developed under the background of industrial transfer in developed countries, so their markets are mostly overseas. With the decline of labor cost advantage and the expansion of industry production scale, such enterprises are generally faced with problems such as falling profit rate and slow development, and many enterprises are trying to carry out secondary development. However, when thinking and trying strategic development, these enterprises have three hidden bad symptoms that need to be paid great attention to.
1. Scale expansion-weakness behind growth
Some processing and export-oriented enterprises recognize the trap of diversified development and clearly point out that they will continue to seek development in the original industry at the initial stage and will not engage in diversification. On the question of how to seek development in the original industry, almost all the top managers of these enterprises answered "expanding the scale of production". However, with the increase of domestic labor costs, the production profits of processing and export-oriented enterprises tend to decline, and the competitive position of production links in the industrial chain tends to decline; On the contrary, the profit rate and competitive position of market segments are relatively rising-this phenomenon will occur after all industries develop to a certain stage. For example, the home appliance industry encountered this situation a few years ago, forcing home appliance manufacturers to finally implement the market integration strategy and realize the penetration and control of market links.
Although the expanded production scale can improve the competitive position of enterprises in the industry, its position may be more passive because it fails to improve its position in the industrial chain, and it will also cause further dependence on market links. When considering the development of the original industry, processing export-oriented enterprises should not simply deal with the problem of expanding production scale, but should be particularly cautious when considering the way to expand production scale, otherwise, they will not only not enhance their competitiveness, but also increase the cost of enterprise transformation or withdrawal.
2. Cost advantage-the weakness behind success
The key to the successful development of China's export-oriented processing enterprises lies in their obvious cost advantages. Among the factors that form cost advantage, the comparative advantage of labor price in China is the main factor. However, with the development of this industry in China, the cost advantages of processing and export-oriented enterprises are being offset by some opposite factors:
First of all, the advantage of labor price is unsustainable for a specific enterprise. With the development of China's economy, the comparative advantage of labor price is definitely weakening. Due to the rising labor price, many enterprises are troubled by the decline in profit rate; Secondly, because the cost advantage derived from labor price is the advantage of China's processing and export-oriented enterprises compared with similar production enterprises in other countries, rather than the unique advantage of a specific enterprise in China, this overall advantage does not constitute the competitive advantage of a specific enterprise within the scope of domestic competitors.
With the intensification of industry competition, the development of specific enterprises began to be restricted by the lack of unique competitive advantages. Obviously, for specific enterprises, they must form their own unique and difficult-to-imitate competitive advantages through other means. As far as cost is concerned, the cost advantage obtained through efficient production organization ability, logistics system improvement ability and process innovation ability can continuously support the development of enterprises. Processing and export-oriented enterprises have long relied on the advantage of labor price and paid no attention to the cultivation of this ability. Therefore, for this kind of processing and export-oriented enterprises, this factor brings success, which in turn becomes a hidden danger for their further development.
3. Agency export-the heavy behind relaxation
According to the survey of Fusi Management Consulting Company, processing and export-oriented enterprises are highly dependent on foreign markets, and some enterprises rely on exports for more than 90% of their products. However, with the excellent export performance, it is the fragile or even incomplete market function of such enterprises. The reason is that these processing and export-oriented enterprises do not sell their products through their own sales networks abroad, but generally adopt the way of export agents and only deal with a few foreign first-class agents. For these enterprises, the real market is completely a "black box", and their ability to grasp the ultimate demand of the market, establish an efficient sales network and flexibly use different sales methods has long been abandoned.
The profit range began to shift to the market, which requires these enterprises to have strong market ability. Otherwise, in overseas markets, one's own destiny is more and more controlled by others, and the risk of survival and development is increasing. In addition, many processing and export-oriented enterprises are also preparing to open up the domestic market, which requires sufficient market capacity, which can not be done only by first-class agents.
However, export-oriented enterprises use export agents for a long time, ignoring their own market functions, and the formation of market functions takes a long time. Therefore, for processing and export-oriented enterprises, agency brings benefits, but at the same time it also causes the incomplete market function of enterprises, which will become a heavy "debt" for enterprises to seek greater independent development in the next step.
4. Anti-dumping troubles
Because the cost of OEM export products is lower than that of world-famous brands, they are often subject to anti-dumping when sold in developed countries, because the local government has caused huge losses to China enterprises in order to protect their own industries.
5. Lack of brand
When China enterprises process more and more ingredients for others, their own brands will be less and less, which is a severe test for China enterprises.