Strategies and Tactics of Chinese Contract Manufacturers and Western OEMs (2001-2011)

35 Pages Posted: 12 Nov 2012

See all articles by ManMohan S. Sodhi

ManMohan S. Sodhi

City University London - Sir John Cass Business School

Christopher S. Tang

University of California, Los Angeles (UCLA) - Decisions, Operations, and Technology Management (DOTM) Area

Date Written: November 10, 2012

Abstract

As policy makers seek to draw lessons from the growth of Chinese manufacturing, we need to better understand the evolving strategies adopted by Chinese manufacturers since the economic reforms of the 1980s. Focusing on the apparel and electronics sectors, we look at how Chinese manufacturers sought to move to higher value-adding parts of the supply chain in different ways during the period 2001-2011 and how their western OEMs responded. As a first step towards understanding the co-evolving strategies and tactics of Chinese contract manufacturers and western OEMs, we use a simple game-theoretic framework of contract manufacturer and OEM strategies to look at the actual tactics many Chinese contract manufacturers adopted. Our findings are that Chinese contract manufacturers ended up co-operating, competing, or co-opetiting (i.e., cooperating and competing at the same time) with western OEMs. Also, western OEMs used their position in the supply chain to devise counter-measures, possibly ending with win-win solutions for both sides.

Keywords: Co-opetition, co-evolution, supply chain, value chain, strategy, tactics, game theory, contract manufacturing, electronics industry, apparel industry

Suggested Citation

Sodhi, ManMohan S. and Tang, Christopher S., Strategies and Tactics of Chinese Contract Manufacturers and Western OEMs (2001-2011) (November 10, 2012). Available at SSRN: https://ssrn.com/abstract=2173751 or http://dx.doi.org/10.2139/ssrn.2173751

ManMohan S. Sodhi (Contact Author)

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Christopher S. Tang

University of California, Los Angeles (UCLA) - Decisions, Operations, and Technology Management (DOTM) Area ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

HOME PAGE: http://www.anderson.ucla.edu/x980.xml

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