| After China being one number of WTO, OEM became one of the important engines of economic growth in China. OEM executes in various Industry lines, and has been China’s long-term practice. As time goes on, OEM malpractice becomes clear by the time of increased competition in domestic and internal markets. Many OEM companies began to consider restructuring and upgrading, and therefore by extension OEM and ODM and OBM. Different modes fit for different businesses with different abilities required. To seek sustainable development, enterprises need to find the right upgrade path.There are multiple path options for enterprise upgrading. The routine can be a gradually upgrade from OEM to ODM and OBM, or OEM direct transition to OBM through design and R&D capabilities building. Also there is success example of OEM/ODM/OBM been at same time in one enterprise. Whether OEM,ODM or OBM, it represent a different mode of operation and profit model, which is a nature division of labor between large enterprises and small enterprises in different stages of development, and also is the capital of the profit and risk tradeoffs between necessary choice. Which method the most appropriate enterprises? OEM enterprises should look for personalized upgrade path according to their own characteristics with considering of related industry, own advantages and disadvantages together with product categories.After18years of hard working, Chervon has quickly grown to become one of the largest suppliers of power tools in China, ranking top10power tools manufacturer in the world. Chervon’s products are exported to Europe and USA market. Their own brand has been successfully developed in China. In addition to business development, Chervon also started on the road to transform. Starting from the original OEM, Chervon has turned to OEM/ODM/OBM three models co-exist, and hope that finally been a OBM, with ODM and OEM subsidiary of strategy. Restructuring process takes time, along with more issues and struggling. Crisis has been emerged with internal and external. Chervon has to pay high attention to improve the crisis now. Chervon must face crisis, recognize the existing problems and speed up the pace of improvement. TTI group is the most similar competitors, also a good benchmarking. TTI group is started from the OEM, development step by step become a well-known power tool brand supplier of coexistence of three business models, but still survival very good and staying at the industry’s top three. Key success factors of TTI can give some hints to Chervon. Coexistence of diversified modes has very high demands on the resource management, especially human resources, which is on the limits OF management under today’s economic and social environment. The managing system of people management and enterprise culture reconstruction need to have a totally new reform.Taking Chervon group as the research subject, the paper firstly introduced OEM general concepts and related transformation and upgrade theory; secondly summarized China OEM enterprise and electric tools industry developments and features; thirdly described Chervon group problems in the process of transition; then provided a comprehensive analysis of external and internal environment related with Chervon group; the following part benchmarked on the most similar competitors TTI group for in-depth analysis;Pointed out the differences on the ability between Chervon and TTI; finally proposed appropriate solutions to Chervon issues on the basis of comparative analysis. |
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