UPGRADING TO OBM AS HIGHER COMMITMENT MODE BY A BRITISH OEM IN CHINA: INSIGHTS FROM A CASE STUDY

Abstract

It is still unclear why some developed economy (DE) global startups decide to internationalize into emerging economies (EEs) where the legal enforcement and intellectual rights protection are weak,rather than into well-established mature economies.To address this gap, this paper explores what strategies a smallBritish original equipment manufacturer (OEM) employed to venture into China at beginning and to increase its commitments later on.  Using asingle-case studyanalyzing its10-year growth trajectory, we found that this British OEM exploited innovative keyword marketing to achieve fast growth, and then used upgrading to own brand manufacturing (OBM)as a higher commitment mode in China at a more mature stage of development.  However, building own brand coupled with strategic alliance with a Chinese state-owned giant brought high risks and uncertaintiesto the conduct of the OBM strategy.Cross-cultural misunderstanding in communicationbetween two firms became a critical obstacle.   Overall, this paperhighlights the key role of entrepreneurs in shaping firms’ international entrepreneurial behavior, revealing evidence about a novel development pattern of a DE global startup OEMcompeting in the world’s largest emerging economy, China.  Thus, itprovides new insights into an under-explored area of research at the intersection of the perspectives of international entrepreneurship and strategic management

Keywords: OBM, OEM, global startup, global value chain, international entrepreneurship


Article Review Status: Published

Pages: 102-115 (Download PDF)

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