Iuiga takes an original design manufacturers (ODM) approach to its business. Compare and contrast the Business Systems Model of this approach to the Business Systems Model it would need if it took an Own Brand Manufacturer (OBM) approach. Which one do you think would create the most value for Iuiga? Why?

Answered: Iuiga takes an original design…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

Iuiga takes an original design manufacturers (ODM) approach to its business. Compare and contrast the Business Systems Model of this approach to the Business Systems Model it would need if it took an Own Brand Manufacturer (OBM) approach. Which one do you think would create the most value for Iuiga? Why?

Expert Solution

Page 1

Original design manufacturers (ODM) approach refers to the business model under which the brand owner allows another manufacturer to manufacture the product. In other words, the manufacturer manufactures the product and sell it to the brand owner who will then make some slight changes such as labelling, branding, etc. before selling it further.

On the other hand, Own Brand Manufacturer (OBM) approach refers to the model in which the brand owner takes care of the full product development process, from designing the product to manufacturing, labelling, branding, marketing, and selling the product.