Business Model Innovation Based on Collaborative Product Development: A Case Study of Taiwan Design Services

Due to the ever-increasing global competition in the market, most Taiwan companies have attempted to transform their business from OEM to ODM, and thus continue to create niche values. “One-stop Shopping” design services have emerged as an innovative business model during this trend, particularly in high-tech industries. In this model, a design company collaborates with various manufacturing companies in a product development chain, integrates different core competences, leverages individual resources, and thus offers complete product development services as a virtual enterprise. International customers can readily outsource NPD as a whole to the service team through the design company. This paper discusses such a business innovation based collaborations of SME’s. Important findings regarding the innovation are generalized from a case study of the electronics industry, including value creations, potential risks, and enabling methods. Finally, we propose a protective buffer theory that facilitates the execution of this business model.