Imperical Study On Factors Attecting Korea OEM Company's Business Strategy Transition

After 1960 exports became the main factors of South Korean's economic development,and 50 years later to today,its importance has even grown more.Among which,the export of OEM(Original Equipment Manufacturing)constitutes a significant proportion of total exports in the late 20 th century.Its export volume grew increasingly up until 1990,after which it had a decreasing trend.Hence,the decline in OEM exports prove that South Korea's OEM firms have encountered a bottleneck in the new international market environment.South Korean small and medium enterprises have lost their international competitiveness,hence many firms relocate their production base abroad,develop self-owned brands,or after having increased their R&D abilities,transitioned to the new mode of ODM(Original Development/Design Manufacturing).This paper explore the success of ODM export firms using a combination of qualitative and quantitative methods.Through case analysis,existing research reports and the actual work results,the paper analyzes the four contributing factors of transitioning ODM export firms,namely firm factor,strategic factor,competitiveness factor,purchasing factor,and on the basis of these four factors,three assumptions are made.To increase the accuracy of every assumption,a survey is conducted with two to three questionnaires set for each assumption to increase research accuracy.From the survey of 67 firms,the reliability analysis is applied using SPSS software and the validity analysis is applied using AMOS software.Because the measured variables are latent variables,in order to reduce the data loss,the principal components analysis is used to the factor for the minimization of the number and rotation method of varimax.The structural equation model was formed from the reliability analysis and validity analysis.The structural equation model by confirmatory factor analysis to find the latent factor without error,then through statistical regression analysis method to test the causal relationship between the latent factors.Structural equation model test shows that the main conclusion is: firm scale,business strategy,product strategy,promotion strategy,research and development capabilities,quality competitiveness are the six factors that contribute positively to the transition of ODM export.But export experience,marketing ability,price competitive these three factors may not necessarily have effect on ODM export transformation.The main contribution and innovation of this paper is mainly analysis of OEM firms that have lost labor cost advantage and how they adapt to the new market environment.The limitations of this paper is that sample firms are the three biggest industries of ODM,with total sample firms of 67,hence different industry and different firms may not be applicable to the conclusion of this paper.In addition,this paper's analysis of ODM effect are endogenous,exempting government policy,barriers to entry,macroeconomic environment,social environment etc.exogenous factors.Hence,further research into this topic is necessary for academic development and to make up for this paper's research limitation.