By Topic

An investigation into the key elements of the Chinese Shanzhai model: Alternative path to growth, cross-specialization partnership, and opportunistic niche infiltration

Sign In

Cookies must be enabled to login.After enabling cookies , please use refresh or reload or ctrl+f5 on the browser for the login options.

Formats Non-Member Member
$33 $13
Learn how you can qualify for the best price for this item!
Become an IEEE Member or Subscribe to
IEEE Xplore for exclusive pricing!
close button

puzzle piece

IEEE membership options for an individual and IEEE Xplore subscriptions for an organization offer the most affordable access to essential journal articles, conference papers, standards, eBooks, and eLearning courses.

Learn more about:

IEEE membership

IEEE Xplore subscriptions

2 Author(s)
Hung-Hsiang Kao ; Graduate Institute of Technology and Innovation Management, National Cheng-chi University, Taipei, Taiwan ; Jen-Fang Lee

How do small emerging-market late-entrants with weak capabilities and scarce resources overtake leading U.S. and European firms in emerging markets? To answer this question, this study investigates Chinese Shanzhai firms in mobile phone, automobile, and notebook PC through secondary data, firm interviews, and retail channel observation. The result of this study not only helps understand the Shanzhai innovation model but extends the theory of vertical alliance and provides other aspiring emerging-market late-entrants a framework for devising winning innovation strategies. This study finds the key to the rapid and steady rise of Chinese Shanzhai firms is their vertical alliance model characteristic of alternative path to growth, cross-specialization partnership, and opportunistic niche infiltration. First of all, these firms seek out room in the marginal areas of the existing industrial system by changing their scope of operations and restructuring the value network. Secondly, they build up an open platform for innovation different from that of the incumbents' through cross-industry partnerships for collaboration and value co-creation to make up for what they lack. Lastly, they target a niche market by providing maximized Price-to-Performance ratios and maintaining diverse product lines to then infiltrate the mainstream market.

Published in:


Date of Conference:

18-22 July 2010