Taiwanese Firms Gain And Prolong Competitive Advantages

1684 Words Oct 13th, 2014 7 Pages
Executive Summary
Taiwanese firms gain and prolong competitive advantages, by acquiring and broadening their underlying resource base through linkage, leverage and learning processes, and through institutional supports, rather than seeking an understanding of how they create advantages in the first place. They pose linkage as the initial step that generates opportunities for the LCFs, resource leverage through contract manufacturing, brain drain and corporate Apprenticeship as the means through which the LCF is able to exploit the linkages established, and learning as the outcome of repeated applications of linkage and leverage by the LCF, resulting in the acquisition of dynamic technological capabilities. (Matthews, 2002a) In addition, institutional supports are indispensable for guide, shape and channel of linkage and leverage processes.
One of main factors that Taiwanese companies laddered up their global status by acquiring competitive advantages is due to three types of linkages of OEM, ODM and OBM. Su Lee Tsai described each term as the establishment stage, the modernization stage and the equalization stage. OEM is a specific form of subcontracting under which a complete, finished product is made to the exact specification of the buyer (often a large transnational corporation (TNC)). The product is then marketed through the buyer’s own distribution channels and brand name. Inventec made the OEM agreements with Japanese companies such as…
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