A Study of OEM and Its Impact on Market Structures

This paper analyses the implementary condition, motivation factors and the impact on market structures of OEM. Based on the analysis of postulate of OEM, it studies the motivation factors in both upstream and downstream firms from the cost saving angle and then point out that the separation of market risk from upstream and downstream firms and the following cost saving is the key factor for firms to choose OEM. Then it studies the impact of OEM on the market structures by taking example for Chinese mobile telephone market. Lastly, it suggests a more justified and objective attitude towards the extensive participation in OEM of Chinese firms as a professional manufacturer.