Oxo Case

Since the company’s foundation in 1989, OXO’s single most important factor to success has been their product design. This in combination with the relatively low manufacturing costs and connections of the founder of the company, made it possible to enter the housewares industry by positioning themselves as a premium housewares brand. After being approached by supermarket- chains, OXO launched several new product lines to comply with mass-market pricing levels. Competing in this market proved to be complex and as this market accounted for a mere 1% of the company’s sales it was decided to discontinue mass market product lines. This reconfirmed that the OXO’s success was relying on the usability and design of its products.

To support growth, the company had to expand its product portfolio. Its design solely relied on one external partner and its manufacturing on several somewhat primitive manufacturers in Asia. These manufacturers made it possible to make high-quality products at low cost, however the product development process was complicated and lengthy. Now that new opportunities opened up for OXO, they had to expand their product portfolio.

As the design partner (working on royalties contract) did not have the capacity to support this expansion, OXO had to make a decision in which way to support this expansion. In my view, the criteria on which the decision should be based are as follows:

1. Compliance

- Can the partner sustain product portfolio expansion (short term & long term)

- Does the partner comply with existing design practices of OXO and partner

2. Practicality

- Can OXO work efficiently with the partner

- Cost of partnership

Taking the above criteria into account, OXO had 4 different options in this situation:

1. Keep existing partner and combine with large design agencies:

In this