Abstract

During the past decade, brand owners have preferred to use research and development (R&D) outsourcing tointegrate activities based on value chain considerations. Today, however, this preference has changed because ofcompetitive pressure in the high-tech industry, and brand owners are opting to secure R&D resources internally.This study focuses on how to properly allocate R&D resources and leverage the knowledge capabilities ofcontract manufacturer to maximize the benefits of each product type. This study was conducted from the pointof view of a brand owner, and a case study was also used. The effects of R&D outsourcing levels on knowledgesharing between brand owners and contract manufacturers were investigated by analyzing four product types:auxiliary products, core products, innovative products, and exploratory products. In this study, knowledgesharing was divided into technology and market knowledge sharing. Two conclusions were drawn based on theresults. First, the results indicated that managers adopt distinct levels of R&D outsourcing according to theproduct type. Second, product types with matched R&D outsourcing levels caused dissimilar results regardingtechnology and market knowledge sharing between brand owners and contract manufacturers. Managerialimplications and suggestions are also provided in this paper.

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