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Technology development has been long considered to be a primary factor for establishing a competitive edge. This paper deals with dynamic patterns of the technology development and strategic changes of Siemens VDO Electric Motor Co. in China, focusing on the technology development project in the company. The purpose of this paper is to find underlying principles in successfully managing technology development projects which involve collaborative efforts in the context of MNC in developing countries. For this purpose, this paper takes a system-analytic approach to the innovation process and strategic changes. From the process perspective, it explains dynamics of the technology development process of Siemens VDO Electric Motor Co. in China and its strategic changes along various development stages. From the strategy perspective, some underlying principles behind the successful technology development process are identified: the focused-and-phased, the buy-for-make, and the harmonized collaboration-and-competition approaches. Finally, strategy implications are discussed.