Synergy, Tensions and Smart Power Strategies

Abstract

We examine how product suppliers can effectively implement brand-and-OEM dual business models by investigating the synergy and tensions generated during different phases of implementation and providing strategies for increasing synergy and reducing tensions. We conduct a longitudinal case study of an electronic supplier's various products. We find that during the seeking phase of a dual business model, synergy is generated by signal effect and tension by inconsistent identity; during the fulfilling phase, synergy comes from organizational learning and resource pooling, and tension from heterogeneity management and resource investment prioritization; and during the harvesting phase, synergy originates from balanced long-short term outcomes and tension from market conflict. We also find that during implementation the suppliers adopted smart power strategies that combined hard and soft power. Hard power deliberately increases synergy and soft power subtly reduces inherent tensions. Hence, the benefits of a dual business model can be realized. We add insight to the business literature on how product suppliers adopt smart power strategies in order to gain returns on engineering efforts during the implementation of dual business models.