Abstract
Fastener industry in Taiwan has developed more than 60 years. The industry structure and supply chain are also well developed. Because of this background, the fastener firms in Taiwan have good strength on both technology and product. From technology side, most of the firms have R&D capability. From the product side, since fasteners are the basic components, they are classified in three levels. In Taiwan, there are more than 1,100 fastener firms with different business models, including lean streamline production, specialization, processing and so on exist in each level of products, which means the firms have well controlled in this basic components. Though fastener firms cluster obviously in Taiwan, there are still many different business models. In this research, the writer interviews seven experts from the fastener industry and collects the secondary data to investigate the Make-or-buy decision in fastener industry. The interviewees include one firm with lean streamline production model, two firms with 70% lean streamline production model, two firms with specialization model and one firm with processing model. According to the previous researches, most of the researches relating to make-or-buy issue are discussing the transaction cost theory, competition, the effects to transaction cost by uncertainty etc. However, due to the industry cluster phenomenon, the transaction cost decrease indirectly because of the social capital. According to this research, the arts of products and the characteristic of decision maker is a significant reason for business model of the firms. Besides, firms value to increase the added-value of main product. Investing in R&D will help firms to adjust the change of environment and challenge.