2. Research Review
3.3 Research subject
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methodology is a positive social interaction. The interviewing data is the result of the interaction (Yuan, 2002).
This research uses face to face interview. There are three kinds of interviewing methods; structured interviews, unstructured interviews and semi structured interviews.
This research uses semi structured interviews. A structured interview is a highly control way to interview. Certain interviewing methods like questionnaires include questions, sequenced and then recorded. Semi structured interviews have three main characteristics.
Firstly, there is a certain topic and few questions, but interviewer does not need to stick to those specific questions. Secondly, before the interview the interviewer can schedule some online questions. However, when interviewing, interviewers can change or think about new questions in accordance with interviewees’ responses. The way to ask questions and the sequence of the whole process can also change freely. Thirdly, the interviewer does not need to use certain intonation or text to interview, but according to the answer of respondent. As for unstructured interviews, there is no certain topic, conversation between interviewer and respondents is totally free (Yuan,2002). The different servitization paths from OEM/ODM to OBM between each company and different industry that company belongs to. This research mainly focuses on a certain topic. Semi-structured interviews are thus chosen.
3.3 Research subject
This research mainly focuses on consumer goods industry because past research mainly focused on capital goods industry. Of Taiwan’s goods exports in 2012, approximately 99 percent were from the industrial sector, while agriculture goods comprised around 1 percent of exports. In terms of imports, over 77 percent of Taiwan imports are of agricultural goods and raw material, reflecting Taiwan’s limited arable
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land and lack of indigenous natural resources. Capital goods are the next largest imports (14 percent), followed by consumer goods (approximately 10 percent)( Joshua, 2014).
The consumer goods industry is a localized industry in Taiwan, as shown in the above data. Its relationship with end customers in Taiwan is closer than capital goods industry.
How manufacturers view the demand of end customers is more important in consumer goods industry. Some capital industry marketers are more concerned with the specifications of products than with how these specifications respond to customer needs (Hutt and Speh,1992). Furthermore, the acceptance of the necessity of formal market research about the demand of end customers has proceeded slowly in capital industry marketing relative to that in the consumer goods industry (McTarish and Maitland, 1980). One possible explanation is because in capital goods industry, some of the companies have grown successfully on the basis of engineering skills and technological development (McTarish and Maitland, 1980). Many managers in such firms are promoted out of engineering and R&D departments. It is not unusual, therefore, that technical values tend to dominate their decision making. Due to the difference between capital goods industry and consumer goods industry, this research mainly to explore more about consumer goods industry.
In order to understand the value-added paths from OEM/ODM to OBM, this research centres on three representative and distinguishing firms in the suitcase, shoe and IT industry, namely Lian Yin, DAPHNE and ASUS. These three companies are representative of the OEM/ODM industry over the past 60 years. The servitization process from OEM/ODM to OBM may not be the best way for OEM/ODM companies to transform. Though it is a possible way to increase success.
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3.3.1 Lian Yin
From manufacturing suitcases in Shanghai and wholesaling them in Taiwan, the primary business of Lian Yin is now selling, renting and fixing travel related suitcases and bags. Lian Yin created two brands, LY (Lian Yin) and AllezVoyager. Products manufactured and sold by Lian Yin have an unlimited duration and unconditional after sale fixing service.
The reason why Lian Yin is a good representative case is because it depends on a suitcase renting and fixing service. It was these services that made the brand famous Lian Yin is one of the top companies in suitcase industry. Lian Yin is a SME(small and medium enterprise) depending on very limited resources, but has still been very successful at developing its own brand. The company has many mass media organisations requesting interviews in recent years and its stores often have 1000 customers per day to visiting them.
3.3.2 DAPHNE
DAPHNE’s founder company is “EZ capital”. Originally manufacturing low-end shoes in Taichung, DAPHNE now has the second largest market share in China.
DAPHNE now has three different price-level of products, Shoebox, DAPHNE (D18), DAPHNE (D28). Plus agent brands, AEE, Amedo and AREZZO. Shoebox focuses on a lower price level and now has 1500 retail stores. DAPHNE (D18) and DAPHNE (D28) focuses on the mid price level, but each has a different target market. D18 is targeted at young women from ages 18 to 25. D28 targets a more mature market of women aged from 25 to 45. As for agent brands, DAPHNE uses them to supplement its brand and product line. In total, in china, DAPHNE has more than 6000 stores. In 2012, it also
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returned to Taiwan and opened 100 stores. This is its first step towards internationalization. DAPHNE’s product line now includes clothes and accessories. As DAPHNE wishes to become a fashion provider.
This research uses DAPHNE as a case because it is a successfully company that transferred from manufacturing to a brand based model in the shoe industry. In the 1980s, many companies were manufacturing shoes, “EZ capital” is the most successfully of those companies in terms of transitioning into do brand business.
Successfully emerging from the low profit OEM state.
3.3.3 ASUS
ASUS, founded in 1989, is one of the world's leading provider of 3C solutions.
ASUS is committed to providing the best value to individuals and business users of products, applications and systems. Having the world's leading engineers and technology R&D teams’ support, ASUS product line covers a wide range of hardware fromPCs, PDAs, motherboards, graphics cards, servers, optical storage, wired / wireless networking products to mobile phones and other 3C products. ASUS operates in more than 20 countries and has more than 62,000 employees. Originally only manufacturing motherboards ASUS now operates a OBM business model. ASUS is worth 10.6 billion dollars and is the leading company in the information industry in Taiwan.
The reason why this research uses ASUS as a case is because it is a very successfully company who transfered from manufacturing to OBM in the IT industry.
Outstanding R&D abilities as well as understanding of customers and IT trends, means ASUS has become popular with end customers. ASUS placed first in the 2013 Taiwan Global Brands survey.
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