This is one of the most important essays. It enveloped many years of business operations, failures, successes and cunning. Following or contemplating it will save time.
The best way to understand this topic is by going into real examples.
Research & Development (R&D) is an expensive toy. Spend too much like Steve Jobs during his Lisa project, he got sacked by the very company he founded. Spend too little like Nokia cell-phones, it closed shop in 2013, after it became the world's largest vendor of mobile phones from 1998 to 2012 (Nokia Story is here).
In 1970s, Steve Jobs forced and conned his best friend, Steve Wozniak (Woz), to build a simple desktop computer from commercially available parts in a garage (Apple Story is here). Steve Jobs literally squeezed out all of his friend's technology know-how at one go, i.e., years of self-studying and researching up to University of California, Berkeley. Woz was a genius in his own right. This commercialization reduced cost tremendously, but, unfortunately allowed pirates from the east to duplicate it wholesale and with ease. By end 1970s, Apple became so popular that it single-handed created the desktop computer market. There was a saying that time, for every original apple computer sold, 99 clones were made. This provided a tremendous momentum and support for continuing purchase of Apple computers. Slowly but surely, it evolved towards business applications, which is the main force behind any historical success (recall Blackberry Story created for use in business emails).
Then, Steve Jobs made the first mistake in life. He made Apple III and launched in 1980 and made it totally non-copyable by any pirates. Apple sale went down like a rock. Unfortunate for Apple, during this time, IBM decided to enter this market segment with the original intention to provide a slightly more clever version of a dumb slave terminal to their main-frame computer. The IBM PC (personal computer) was meant to do a little printing, word-processing before communicating direct with their main-frame. [Rumour] Bill Gates of Microsoft was asked to write the Operating System (DOS) through his mum, a secretary to IBM vice-president. To IBM, the PC is just a toy. But, its launch timing was so immaculate that it went on to kill off Apple's home computer market in one quick stroke. By 1990s, Apple was more or less dead. The IBM PC was once again fully copied by the pirates of the east and became the new darling. Like before, there was a saying that time, for every original IBM PC sold, 999 clones were made. By this time, the desktop computer was the new found power given to ordinary home (and later, office) users to claim against main-frame dinosaurs.
Again IBM got greedy. IBM created a new pentium PC with a new operating system PS/2 and made the PC totally non-copyable. Sale of IBM went south, but, Microsoft not being a part of PS/2, then proceed to let IBM PC clones to install and run the clone computers as if nothing has happened. IBM was dropped from the market just like that. The power of masses cannot be under-estimated.
To date, Microsoft still allows full-copying of their softwares, hence, able to remain reasonably dominant in the desktop and laptop markets.
This above part is quite a well-known and documented history.
Up and about the same time, in 1950s, after the Kuomintang retreat to Taiwan, the Taiwanese society was relatively stable politically in the 1950s. However, it faced some obstacles economically as a result of the mass destruction during World War II and the Chinese hyperinflation in the 1940s. The sudden increase in population caused by the Kuomintang migration from mainland China also affected Taiwan's economy. During this time, only the US came to their aid. They were given food and resources. The bags that contained these food and resources were then taken apart and made into underwears for the kids. It was that tough during those times.
By end 1970s, the executive premier, Chiang Ching-kuo's Ten Major Construction Projects served as the basis for heavy industrial development and computers in Taiwan. Unlike that fucken little island, Taiwan provided a serious sum of US$1 billion for Taiwanese to develop clones for the Apple and IBM computers. Taiwan government believed in her people and allow the full development of OEM (original equipment manufacturer) high-technological products and the grants were given freely to citizens. To date, after that critical investment in her people, Taiwan remained the only dominant player in the electronics manufacturing. This was how brands like HTC and Asus started by being OEMs and slowly but surely, they each became original product and household name.
The same story goes to Samsung, after Apple asked Samsung to make components for their PCs and mobiles.
The Argument
Every retail chain loves to build their own house brands. They know their venerability in sale. When the brand is well-known, the sale channels of the retail chains would have less bargaining power. Therefore, all the time, the retail chains seek to limit this branding growth. Given every possible chance, the retail chains will build their own house brands. But, as said before, R&D is very expensive. In the end, the retail chains only managed to change only the external packaging of the products, but not its content. The manufacturing process of the products is jealously guarded by the original producer. So you will find a fuck-price peanuts, selling alongside Tong Garden's peanuts (obviously, Tong Garden in order to gain access into the fuck-price retail chain agreed to repackage some of its peanuts with a fuck-price packaging and allow the fuck-price peanuts to be sold at a dollar cheaper) or fuck-price canola oil, selling alongside RBD's canola oil.
If you were to buy petrol from the pump stations, noticed their refilling trucks are sometimes from very odd companies, i.e., every oil company do often cross-sell their oil products to each other. Hence, their advertisements about how good and efficient is their petrol are pure bullshit. There are all the same.
Back to the PC market, Microsoft used to and still is dominant in the pc market. At one time, rival, Linux, was developed and distributed free. But, it was deemed to be an inferior product from Microsoft's Windows. Since Windows was easily copied, Linux never take off even though it was free. Right now, Microsoft is no-where near the mobile units. Android, the operating system for mobiles, is given a free rein to develop its product. In time, Google, the owner of Android, would be far richer than Microsoft and Apple combined.
After the first read, the arguments above may appear disjointed and a little confusing initially. Read it a few more times, you will see the reason behind each story. It is important that you are able to deduce the relationship between R&D, product and survivability of self.
So it is obvious that you would start off with very little R&D resources. So be like Asus, HTC and Samsung, start to develop the product using your own bare hands. Employ little critters as your free workers. Don't be afraid to brand your product under someone else's house brands. Keep improving the quality of the product. This is one thing nobody can take away from you. But, do reduce the risk by allowing as many retail chains to brand it under their names. That way, the retail chains will feel less threatened by your rise. Given enough time, your own brand may or may not appear, but, you will be rich beyond measure.
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