Business Model Innovation Based on Collaborative Product Development: A Case Study of Taiwan Design Services

Due to the ever-increasing global competition in the market, most Taiwan companies have attempted to transform their business from OEM to ODM, and thus continue to create niche values. “One-stop Shopping” design services have emerged as an innovative business model during this trend, particularly in high-tech industries. In this model, a design company collaborates with various manufacturing companies in a product development chain, integrates different core competences, leverages individual resources, and thus offers complete product development services as a virtual enterprise. International customers can readily outsource NPD as a whole to the service team through the design company. This paper discusses such a business innovation based collaborations of SME’s. Important findings regarding the innovation are generalized from a case study of the electronics industry, including value creations, potential risks, and enabling methods. Finally, we propose a protective buffer theory that facilitates the execution of this business model.

[1]  R. Amit,et al.  Value creation in E‐business , 2001 .

[2]  H. Schmitz,et al.  How does insertion in global value chains affect upgrading in industrial clusters? , 2002 .

[3]  Sumantra Ghoshal,et al.  Going Global: Lessons from Late Movers , 2000 .

[4]  Jeffrey H. Dyer,et al.  The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage , 1998 .

[5]  Maurizio Sobrero,et al.  Strategic Management of Supplier-Manufacturer Relations in New Product Development , 2002 .

[6]  J. Vleggaar,et al.  Collaborative R&D and European Industry , 1996 .

[7]  Louis Y. Y. Lu,et al.  The R&D and marketing cooperation across new product development stages: An empirical study of Taiwan's IT industry , 2004 .

[8]  Chih‐Hai Yang,et al.  EXPORTING AND PRODUCTIVITY: A FIRM‐LEVEL ANALYSIS OF THE TAIWAN ELECTRONICS INDUSTRY , 2003 .

[9]  Ching-Chiang Yeh,et al.  The Taiwan system of innovation in the tool machine industry: a case study , 2003 .

[10]  Collaborative Product Development for the New Economics --- An Empirical Study of Methods and Enabling Functions , 2005 .

[11]  Chih-Hsing Chu,et al.  Collaborative product development in Taiwan PCB industry , 2004 .

[12]  Joan Magretta,et al.  The Power of Virtual Integration: An Interview with Dell Computer''s Michael Dell , 1998 .

[13]  Fu-Chung Wang,et al.  A Multidisciplinary Concurrent Design Environment for Consumer Electronic Product Design , 1996 .

[14]  Freddy Fuxin,et al.  Categorisation of Geometry Users , 2001, Concurr. Eng. Res. Appl..

[15]  Eric H. Kessler,et al.  A reexamination of product and process innovations using a knowledge-based view , 1999 .

[16]  A. Morris.  The challenge of collaborative commerce , 2002 .

[17]  T. Holmes.  Localization of Industry and Vertical Disintegration , 1999, Review of Economics and Statistics.

[18]  R. Narula.  R&D Collaboration by SMEs: new opportunities and limitations in the face of globalisation , 2004 .

[19]  J. Bessant,et al.  Mass customization: the key to customer value? , 2004 .

[20]  P. Chang,et al.  Finding the niche position — competition strategy of Taiwan's IC design industry , 2002 .