Research on the Formation, Breakthrough and Countermeasures of the Captive Governance Mode of China’s Sporting Goods Original Equipment Manufacturer (OEM) Companies

Abstract

The integration of China’s sporting goods industry into the global value chain (GVC) has brought opportunities for the development of the industry. However, the both-ends-abroad OEM production mode is "locked" in the low value-added processing and production link in the GVC, which is located at the lowest end of the GVC. When international financial crisis breaks out, the orders of domestic OEM companies decrease significantly, which directly affects the development of the companies. Thus, it indicates that China's sporting goods OEM companies should not rely too much on international processing and export trade, but to rely on the local market to build a national value chain (NVC), integrate domestic and foreign sellers and suppliers and form an orderly product competition and certain market share ability through corporate mergers and acquisitions, product outsourcing, etc. Through the leverage of NVC, leading companies can achieve the expansion of the competitive advantages. Cultivate domestic multinational companies that can compete with international multinational companies in NVC, so that they can focus on the governance and control of the core links of the value chain, realize independent product research and development, brand and sales channel construction, support and help small and medium-sized domestic enterprises take the path of professional development in NVC, actively guide and encourage cooperation with the core to create value chain advantages, and achieve win-win cooperation and products’ functional upgrade.