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6 Strategies from OEM to own-brand

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The head office of Geber Consulting is based in Taiwan, where for five decades companies have been hugely successful as OEM manufacturers - making products for other brands. Think of Foxconn, one of the world's electronic manufacturing giants, who makes most of Apple's products. Many of these companies now want to develop their own brands. The main challenge in launching your own branding is not to alienate your existing OEM customers. 

As a successful OEM company, should you create your own brand?

We have developed six proven strategies for successful OEM-to-own-brand transitions.

 

1) Just do it!

Sometimes the situation is so complicated  - or so simple - that you can just go ahead with your new brand strategy. Your OEM customers may be so small or focused on a specific market segment or geographical area that your new brand will not threaten them. Or they are so big that whatever you do will annoy them, and you have no option but to just push ahead. 

 

2) Find your niche!

As an OEM manufacturer, you also have R&D talent under your roof. Use it wisely to find a niche or new product which will complement your existing OEM customers' products. 

 

3) Engage your OEM customers

Sometimes it's best to be open about your plans and present them to your OEM customers directly. Together, you may find better solutions than going it alone. Plus, you keep your OEM customers and together create more value for yourself and them. 

 

4) Do it secretly

In other situations, any move towards your own brand will turn your OEM customers against you. In these cases it is advisable to hide your plans by starting a new company who then also becomes your customer. Although we usually advise against this strategy, it is warranted in certain industries, particular where expensive machinery is concerned. 

 

5) Don't do it

Believe it or not, certain companies who want to have their own brand are not cut out for it. You may lack the necessary capabilities or your OEM customers might be so dominant in their industry that any attempt to launch your own brand is doomed from the start. Our in-depth analysis will show whether your dream of owning your own brand is viable. 

 

6) Beat them at their game

Last in the list, this is the most ambitious and difficult choice. It is also the best. 

As a successful OEM manufacturer with years of R&D experience, you may be in a position to take on your customers heads-on. Your new brand could be better, cheaper, or more innovative than anything you have ever built for your customers. With all that experience you can create value in ways your OEM partners never thought possible. Look at Asus for example  - they started in OEM/ODM and now build the world's most advanced gaming notebooks. Whatever you do, be aware that launching your own brand is not just a matter of branding. It's a matter of strategy. 

 

Switching from OEM to OBM means a complete change in corporate culture. 

 

Turning from a pure OEM manufacturer into a successful brand means changing your entire corporate culture. As consultants, we spend weeks talking to all your departments and try to involve everyone in management during this transition. It starts with the CEO but affects every level and job type in your company, from the engineers to the receptionist.

Becoming a brand is not a matter of developing a new product with a shiny logo, it means changing every employee's attitude and perception of the company. It's a tricky process, but an exciting journey.  Contact us today for advice.