An evaluation of the key strategic issues facing a company moving from contract manufacturing to own brand manufacturing

Abstract

In today‟s very competitive business environment contract manufacturing companies are continually competing to gain new customers, increase revenue and aspiring to become number one in their manufacturing environment. However, in doing so, a company is faced with many diverse choices, such as offer better quality products, lowcost products or perhaps a contract manufacturer may decide to try and reap the majority of rewards such as seeking new clients, increasing revenue and/or increasing manufacturing capability. These are some of the primary concerns of a contract manufacturing company based in the midlands transitions from contract manufacturing to own brand building. (Chen, 2013), mentions in his article branding vs. contract manufacturing that “Little research has been done on this topic as there is a gap in the literature regarding the issue‟s companies face while making a transition from contract manufacturing to own brand building”. Therefore, the author of this dissertation has decided to identify the issues that could possibly occur while trying to identify any possible solutions to whilst addressing the aforementioned challenges. The primary objectives that the author sets out to address within this dissertation are as follows: To explore the reasons why the companies decided to make the transition To identify the procedures/techniques they used when making the transition To identify the difficulties that arose while transitioning and the solutions used by the companies To evaluate the success of the transition The author gathered information regarding these objectives through primary research which involved interviewing four people at management level within various companies that have been involved in such a transition, using semi-structured interviews. These findings along with findings from conducting research within existing literature relevant to the topic area enabled the researcher to identify the potential problems a company may face while making the transition, the techniques a company might use to counteract or negate the problems and lastly enabled the author to identify whether the transition was a success or a failure. The primary findings which were gathered proved positive as 75% of the interviewees suggested that the transition was successful despite any difficulties that arose along the risky yet worthwhile journey.