Summary of our successful case of an OEM company:
- Industry & Background of Enterprise
- Business Challenges and Challenge Statement of Project
- Project Scope
- Transformation Strategies and Business Results
Industry:
OEM (Original Equipment Manufacturer)
Background of client:
One of the major paper manufacturers in Hong Kong
Design Thinking Double Diamond Innovation Framework
The project is guided by the Design Thinking Double Diamond Model, a structured innovation framework that emphasizes both divergent and convergent thinking. The process begins by clearly determining and identifying key challenges, followed by deep discovery and definition of user needs. It then progresses to developing and delivering innovative solutions that create meaningful, measurable impact.
Business Challenges:
Semi-finished or white-label product manufacturers face immense pressure from brand owners. They are expected to:
- Reduce production prices.
- Shorten production times.
- Decrease minimum order quantities.
- Maintain high product quality.
These harsh conditions have led to rising operational costs and sharp profit declines. As a result, many manufacturers were forced to relocate operations to less developed countries to stay afloat.
Similarly, an international high-quality paper manufacturer in Hong Kong, which operated as an OEM supplier for packaging paper used in durable shipping boxes for international courier companies, was facing a profitability crisis. Despite increasing sales, the company struggled with declining profit margins due to intensifying market competition.
Challenge Statement of the Transformation Project:
How to transform the business from OEM (Original Equipment Manufacturer) to OBM (Own Branding & Manufacturing) and achieve sustainable profitability.
Types of Transformations:
Business Model Transformation and Product Transformation
Duration of Project:
24 months
Strategies for Transforming Business & Resolving Challenges
Strategies for Transforming the Business and Resolving Challenges
Using design thinking, the paper manufacturer explored innovative applications of its paper products across different markets. Through this process, the company identified a significant unmet demand for premium packaging paper, particularly in the high-end gift packaging segment.
The company transformed its white-label products into iconic branded products by developing highly differentiated, value-added paper products. A notable example was the creation of intricately designed “Lai See” (red packets) with cut-out designs and premium textures. These products not only highlighted the paper’s superior strength and refined craftsmanship but also satisfied the emotional needs of users who desired instant gratitude when giving red packets.
Additionally, the company directly engaged end consumers through a unique marketing and sales channel, targeting high-end markets with its branded products.
Key Performance Indicator(s) of the Project:
- Brand Awareness
- Profit
Breakthrough Business Results
The transformation from OEM to OBM was a resounding success:
- The self-developed branded products, such as the high-end “Lai See” packets, launched successfully in the market.
- The gross profit margin of these products increased over 100 times, demonstrating the power of innovative product differentiation and branding.
By turning paper—a commodity-like raw material—into a high-value ODM (Original Design Manufacturer) product, the company not only penetrated the high-end market but also became a benchmark for cross-industry innovation.
This case highlights the importance of leveraging design thinking to uncover hidden opportunities, meet emotional and functional consumer needs, and achieve sustainable business growth.
Our Proven Track Record in other Sectors
To maximize the ROI of transformations, we have helped enterprises to innovate their business models, products, and services to generate breakthrough results, including revenue, profit, market share, customer acquisition & retention, and employee engagement. To enhance the success rate of transformations, we have developed the best practices of Design Thinking and innovation management for 8 aspects: aviation, banking, hotel, insurance, retail, public transport, manufacturing, and community development.
