Based on the sample of 135 small and mediumsized industrial enterprises of Jiangsu Province, competitive priorities are divided into cost, quality, delivery and flexibility, and firm performance is divided into financial and nonfinancial performance in OEM mode, and then this paper explores the relationship among competitive priorities and performance in OEM mode by using factor analysis. The results show that quality, delivery and flexibility all have a significantly positive effect on financial and nonfinancial performance; however, cost has no effect on performance. Therefore, it provides references for small and mediumsized industrial enterprises when they make decisions to choose appropriate competitive priorities.