Transition from OEM to OBM: A case study of Fenix

Abstract

This paper reveals an under researched phenomenon: the ways that export-oriented, original equipment manufacturing (OEM) clothing companies upgrade to original brand manufacturing (OBM), and the implementation challenges involved, especially at the high end of the market. In order to provide an in-depth understanding of this particular phenomenon, this research adopts a qualitative form of methodology and features a case study of recent business practice in Hong Kong.

The background of the Hong Kong clothing manufacturers is examined from the perspective of the global commodity chain (GCC). A review of OBM opportunities in Hong Kong is conducted and the possible explanations for initiating OBM are also identified.

The insights from the Fenix case study reveals the advantages of adopting an indirect path towards achieving OBM, factors governing decisions and actions during the transformation, inherent obstacles of branding in the high-end market and the synergies of running the OEM and OBM business models in one company. These insights serve as an example of success in both transforming the enterprise from OEM to OBM and diversification of markets to sustain OBM business activities.

Citation

Chyr, S.Y., Taylor, G. and Hui, C.L.P. (2008), "Transition from OEM to OBM: A case study of Fenix", Research Journal of Textile and Apparel, Vol. 12 No. 3, pp. 77-85. https://doi.org/10.1108/RJTA-12-03-2008-B008