As technology advances, new computer, telecommunications and consumer electronic products are constantly being introduced, giving consumers more choice than in the past. However, fluctuations in the business cycle mean that competitors fight to gain market share and this often results in an oversupply of 3C products and a decline in prices. Taiwan's notebook industry is world-famous, but because of pressure from foreign companies profit margins are relatively low. The notebook producers try to control the price of the components by putting pressure on component makers. This leads to a price war between the suppliers and even the winners of this war still have to cut prices on a quarterly basis.
Technology, consumer preferences and prices are all changing rapidly. Component agents are being squeezed between suppliers, who want to maintain a fixed price, and customers who want prices to be cut. This has reduced profit margins. This research focuses on how passive component agents change in response to this situation and meet the demands for higher quality, better service, lower prices and faster delivery. The case study concerns Company A, which originally acted solely as a passive component agent. It examines how, between 2002-2010, the company restructured its business and supply chain and developed its own-brand components to gain key competitive advantage and establish an operating platform.
This study researched the relevant literature and information concerning Company A to produce a summary of the company's transition strategy and how it was implemented. It is hoped that this research will provide a reference for other agents which are going through a similar transition.
Keywords: passive components, OEM, own-brand, competitive advantage