| In the background of Reform and Opening in1980s, China based on the advantage of labor resources endowment, became the work of the world by undertaking a large number of labor-intensive industries transferring from developed countries or new industrial countries. And China also has formed the export-oriented economic development mode mainly on international subcontracting, realizing an unfailing economic growth. Learning chances are provided for Chinese enterprises due to the division of global value chain, leading to the increase of China’s economy. While in the process of the integration into the global value chain, Chinese OEMs (Original Equipment Manufacturers) have to rely on the low-cost land utilization and labor, with the major business of original equipment manufacturing, leading to a low product added value and a low profit margin, which makes these enterprises in the middle part of the smiling curve. The very economic mode results in a strong dependency on international enterprises and weak competence for Chinese OEMs; and this mode also restricts the driving effect on the other domestic industries, as well as the development of local enterprises, against the optimization and upgrading of industrial structure. In the recent years, with the industrial upgrading in China, the production cost increase leads to a further decrease of OEMs’profit. As a result, several OEMs can hardly make a living in China. In this situation, more and more enterprises realized that the only path to adapt to international competition environment and to obtain a position with higher competence in the value chain, is to change the traditional OEM mode and to carry on brand upgrade. Although the brand construction of OEMs in China has gained a certain effect with the development in recent years, there is still a considerable gap of brand construction between China and developed countries; the gap is mainly reflected in the low value, small scale and the lack of core competences of brands in China. Therefore, the research on Chinese OEMs’brand upgrade, understanding the difficulties, motivation, path and strategies of brand upgrade, shows its necessity in the background of global value chain, so that Chinese enterprises can adapt to the international competitive environment more easily and obtain a position with stronger competence in the value chain.This paper chooses the Chinese OEMs in the background of global value chain as the research object, conducting a study on the motivation, the path and the strategy of OEMs’brand upgrade, systematically building a model of the brand upgrade, and verifying the proposed model through a variety of case studies. The motivation determines willing to upgrade while the basic condition determines the ability. Specifically, the motivation prompts the OEMs to carry on the brand upgrade upward the value chain curve, while the basic condition supports the upgrade. Both of them codetermines whether the OEM can upgrade the brand along the upgrade path or not. When choosing the brand upgrade strategies, OEMs must adjust the key strategy according to their position and condition, so that the enterprises can rise to the high-end of the value chain as soon as possible.In this paper, time dimension and process dimension are combined, to divide the brand upgrade path to four periods:brand bud, brand start, domestic brand and international brand. In brand bud period, enterprises rely on the original equipment manufacture; in brand start period, the production mode is original design manufacture, or a combination of original equipment manufacture and original design manufacture; in domestic brand period, own brand manufacture is the main production mode; in international brand period, international brand manufacture is the main production mode. In the process of upgrade from brand bud period to brand emerging period, the main basis of enterprises is the accumulation of funds and experience in early OEM mode, and the main motivation is making profits and external environment changing, and the key strategy is to achieve large scale production and original equipment manufacturing, ensuring the initial fund and technology accumulation. In the process of the upgrade from brand emerging period to domestic brand period, the self-help brand and the accumulation of technologies are basis, and the main motivation is the increased external market competition and the improved internal productivity, and the key strategy is to improve the brand awareness through marketing, to innovate new techniques ensuring the product quality, and to build the own marketing channels. In the process of the upgrade from domestic brand period to international brand period, a high brand awareness, core technologies and marketing channels are needed, and the main motivation is the EO (entrepreneurial orientation) and the promotion of independent innovation strategy, the key strategy is to obtain core competence through further technology innovation, and to implement localization strategies ensuring the build of international brands. At last, a variety of case studies are stated in this paper, verifying the proposed model of brand upgrade.In this paper, brand upgrade and OEMs are combined under the background of global value chain. The facts and theory basis are expected for Chinese OEMs to find a better brand upgrade path, so that these enterprises can adapt the international competition environment and acquire a position with stronger competence in the value chain, achieving the sustainable development of economy. |
