The purpose of this paper is to examine the rise and the fall of China's local handset manufacturers, to explore the issue of how learning strategies of latecomers evolve in relation to changing environmental features and their own technology accumulation.
The paper employs a case study approach.
As latecomers approach technology frontiers, learning strategies need to change timely. After latecomers gain their initial foothold in the domestic market, R&D and innovation capabilities become vital for maintaining their margins and sustaining their growth. This paper illustrates that latecomers should use the relatively strong case flow for their long‐term efforts on innovative capability building, which were generated from their initial market success.
This paper provides a systematic analysis on the rise and the fall of China's local handset manufacturers, less addressed by previous studies. This paper has following contributions: it identifies factors contributing to the rise and the fall of China's local handset manufacturers. These findings will act as an effective checklist for Chinese managers to design competitive strategies against multinationals. Second, it identifies that distribution channels can act as a source of competitive advantages for latecomers to compensate for their technology disadvantages at early stage. It is less addressed by previous studies in the field of technological learning. This finding may be of interest to managers in large catching‐up countries with home market advantages such as India, Brazil, Mexico and Indonesia.
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