An Analysis On The Value And Risk Of Beverage Industry's OEM Model

Beverage industry is among those opening up earlier in China.In recent years, with the sustaining improvement of consumption level and demand in China,capital has been swarming into the Chinese market from home and abroad resulting in a crazy expansion of international beverage magnates.Many domestic beverage manufacturers,especially the medium and small ones with local brands,have to face the difficulty and threat of strategy conversion,merger and bankruptcy.Due to their inferiority in self-R＆D level,brand operation and management,assets amount, marketing network building and capital operation capability,they are strongly hit in fierce market competition with market share reducing and brand nationwide expansion ending in failure.Facing the predicaments,how beverage manufacturers break through? It is a realistic problem worth of further discussion.Firstly,this paper introduces the concept,background,developments and trend of OEM,and relates OEM model to beverage industry.It detailedly analyses the industrial features of the Chinese beverage industry,current competitive pattern and OEM model application.It uses Michael Porter's Five Forces Model and SWOT method to analyse and explain the internal and external reasons that Xiamen LQ Company adjusts from independent brand building to OEM.Secondly,this paper sets up a profit and loss balance theory model to preliminarily analyse theoretical motive and starting point of beverage branded manufacturer(OBM) adopting OEM model.It takes LQ Company as example to explain economic effects brought by OEM such as technology spillover,capital accumulation,job creation and corporate culture promotion.It uses SCOR model and fuzzy-analytic hierarchy process(F-AHP) to analyse the value contained in OEM supply chain of beverage industry from supply chain perspective.Finally,it points out the predicament and risk faced by OEM enterprises and puts forward the solutions to keep OEM symbiosis in good condition, promote OEM enterprises' core competitiveness and improve coporate performance.The author thinks,although OEM has many weaknesses,the OEM model of beverage industry is different from that of others such as domestic appliance,IT and textile industry,because it aims to meet the demand of domestic consumption. Therefore,under the current competitive situation and pattern of beverage industry in China,OEM is still a favorable solution and eligible management strategy for the beverage manufacturers trapped in their own brands.