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An Exploratory Study on the Transition from OEM to OBM: Case Studies of SMEs in Korea

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  • Keun Lee
  • Jaeyong Song
  • Jooyoung Kwak

Abstract

This study investigates how the transformation of latecomer small- and medium-sized enterprises (SMEs) in emerging economies from dependent or subcontracting original equipment manufacturing (OEM) firms into independent or original brand manufacturing (OBM) firms is possible to achieve a significant catch-up in their share of regional or global markets. Given that SMEs are rarely able to make such a transition, we elaborate this dynamic process by performing case studies on eight Korean SMEs. These SMEs created their own paths instead of following their forerunners. These paths are neither entirely new nor take the form of leapfrogging, but are characterized by new combinations of existing paths. We identify several risk factors, such as counterattacks and intellectual property lawsuits, that latecomer SMEs face from incumbent SMEs. In addition, we emphasize the importance of cultivating firm-specific knowledge by engaging in a continuing process of trial and error type in-house experiments.

Suggested Citation

  • Keun Lee & Jaeyong Song & Jooyoung Kwak, 2015. "An Exploratory Study on the Transition from OEM to OBM: Case Studies of SMEs in Korea," Industry and Innovation, Taylor & Francis Journals, vol. 22(5), pages 423-442, July.
    • Handle: RePEc:taf:indinn:v:22:y:2015:i:5:p:423-442
    DOI: 10.1080/13662716.2015.1064257
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    References listed on IDEAS

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    Cited by:

    1. Keun Lee & Marina Szapiro & Zhuqing Mao, 2018. "From Global Value Chains (GVC) to Innovation Systems for Local Value Chains and Knowledge Creation," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 424-441, July.
    2. Zhou, Qingna & Gao, Ping & Chimhowu, Admos, 2019. "ICTs in the transformation of rural enterprises in China: A multi-layer perspective," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 12-23.
    3. Jun Jin & Zhengyi Zhang & Liying Wang, 2019. "From the Host to the Home Country, the International Upgradation of EMNEs in Sustainability Industries—The Case of a Chinese PV Company," Sustainability, MDPI, vol. 11(19), pages 1-19, September.
    4. Dwivedi, Abhishek & Pawsey, Nicholas, 2023. "Examining the drivers of marketing innovation in SMEs," Journal of Business Research, Elsevier, vol. 155(PB).
    5. Xing, Yuqing & Huang, Shaopeng, 2021. "Value captured by China in the smartphone GVC– A tale of three smartphone handsets," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 256-266.
    6. Wang Hao, 2022. "National identities and cross-strait relations: challenges to Taiwan’s economic development," ZFW – Advances in Economic Geography, De Gruyter, vol. 66(4), pages 228-240, November.
    7. Keun Lee & Raeyoon Kang & Donghyun Park, 2022. "How Industrial Design Matters for Firm Growth at Different Stages of Development: Evidence from Korea, 1970s to 2010s," Asian Economic Journal, East Asian Economic Association, vol. 36(2), pages 101-126, June.
    8. Tien Son Nguyen & Jen-Ming Chen & Shih-Hsien Tseng & Li-Fen Lin, 2023. "Key Factors for a Successful OBM Transformation with DEMATEL–ANP," Mathematics, MDPI, vol. 11(11), pages 1-18, May.
    9. Ahmadvand, Emad & Salami, Seyed Reza & Soofi, Jahanyar Bamdad & Tabatabaeian, Seyed Habibollah, 2018. "Catch-up process in nanotechnology start-ups: The case of an Iranian electrospinning firm," Technology in Society, Elsevier, vol. 55(C), pages 1-8.

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