| In the background of economic globalization, OEM has once played a very important role to involve Chinese export and processing enterprises in the international specialization and trade. However, the model depending on labor cost advantage is unsustainable for enterprises’long-term development, and its drawbacks are obvious: short processing chain, low added value, meager profit margin, and high dependence on demand abroad. Nowadays these issues are growing prominent as financial crisis haunted American and European markets and global economic structure is undergoing crucial transformation. In this situation, China can not be isolated from the upheaval as well, which we can perceive from Chinese macro-economic policies in recent years that emphasize on transformation of the economic development model, economy restructuring and independent innovation. The stark reality that we have to face is, as the labor cost in China climbs up, the OEM enterprises are losing their edge and this poses them a pressing issue-upgrading in supply chain and transformation of business model.By selecting one of enterprises engaging in hosiery industry-CRC Atsugi as subject of the study and using the general method of strategy analysis, this thesis gave us an insight into the path of transformation and upgrading of OEM business model under guide of theories of Comparative Advantage and Global Value Chain.The thesis started with scanning the macro-environment of hosiery industry, and then utilized Porter’s Five-force Model to make a full and profound analysis on the hosiery industries and their competition structures in the U.K. and China respectively where the most CRC Atsugi’s business are involved, indicating that the M&S dominant supply chain could be sorted as Captive Value Chain according to the patterns of Global Value Chain governance in which the relationship between leading firm and suppliers characterized by high degree of control and dependence had seriously hampered the development of CRC Atsugi. Especially while the macro-environment was getting increasingly fierce, the transformation strategy from OEM to the model oriented by private brand became compulsive. Considering the background that CRC Atsugi belongs to a conglomerate organization-China Resources (Holdings) Company Limited, Chapter4focused on the influences that the powerful mother corporate culture, strategic framework and managerial system have had on CRC Atsugi’s strategy planning and development, pointing out on the hosiery chain shaped at the level of direct mother company-China Resources Textile, the separation of two critical links of the value chain was shackling the growth of CRC Atsugi’s private brand.After elaborating all the factors from the external environment, the thesis began to probe into the interior of CRC Atsugi, firstly reviewing the internal resources, then making analysis of the value chain, mainly highlighting the two key links-R&D and Marketing, and finally shedding light on her core competitiveness. Besides, SWOT was also used to give a summary in the end of the Chapter.On the basis of first five chapters’analysis, Chapter6proposed a transformation and upgrading route for CRC Atsugi. Firstly, to get upgraded from OEM to ODM by diversifying customer portfolio while reducing the weight of M&S to the entire business. Secondly, applying forward integration strategy to the internal hosiery chain to facilitate the development of private brand by acquiring Shenhua. Lastly, based on the above first and second steps, to realize the private brand leading the entire business by strengthening distribution abilities.To ensure the practice of the proposal, Chapter7further put forward the safeguard measures in terms of optimizing product and customer portfolio, effective organizational communication, the role of core competitiveness in private brand development, construction of organizational culture and human resources management.The thesis provides a constructive way to the long run development of CRC Atsugi as well as the enterprises in the similar situation and appealing for transformation and upgrading. |
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