Design Management Capability Framework in Global Value Chains: Integrating the Functional Upgrading Theory from OEM to ODM and OBM

Abstract

Design management (DM) capability development is significant in securing a competitive position in the global commercial market. However, companies integrate DM into their businesses at different levels. Many frameworks and audit tools have been developed to assess the level of design capability and DM, and to facilitate the integration of design into business strategy. Latecomer firms (LCFs) operating in the emerging economies, tend to follow a gradual upgrading trajectory and develop their DM capability. Participating in the geographically fragmented activities of global value chains (GVCs) has provided LCFs with an opportunity to develop their manufacturing, DM, and brand building capabilities. In following an upgrading trajectory in GVCs, LCFs have pursued three particular business strategies utilizing certain levels of DM capabilities. To point out the linkage between business strategies commonly followed in GVCs and DM capability levels of companies, we propose a new assessment approach: ‘Design Management Capability Framework in GVCs’.