Learn in the textbookLeveraging External Resources and Inter-Company Collaboration
DefinitionOEM means that a contract manufacturer makes and supplies products that are sold under another company's (the client's) brand.
ExplanationThe client can widen its own-brand lineup without producing anything itself, and the contractor keeps its existing equipment busy with steady volume. Its hallmark is that the name on the product in the store differs from the company that actually made it.
AnalogyIt is like a supermarket's own-brand snacks that are actually made by a different snack maker.
Memory hookShort for Original Equipment Manufacturer; Japanese renders it as 相手先ブランド製造, manufacturing under the partner's brand.