O.E.M. Strategies Depending on the Product Life Cycle

Abstract

The use of Original Equipment Manufacturing (O.E.M.) has been one of the major strategies in a matured market. Both the Original equipment Manufacturer and the Original Equipment Manufacturee have had the same purpose-to reduce cost. But recently, in the field of competing technological standards (ie. electronics industry), the use of O.E.M. has become an important strategy. It has various purposes. From the view point of product life cycle, purposes of the original Equipment Manufacturer are as follows: to search business opportunity in an emergent market, to expand product lines in a growing market and to maintain product lines in a matured market. On the other hand, purposes of the Original Equipment Manufacturee are as follows: to make 'Good Competitors' in an emergent market, to strength advantaged products in a growing market and to reduce the number of competitors in a matured market.