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Article
Publication date: 26 July 2011

Ke Rong, Zheng Liu and Yongjiang Shi

The purpose of this paper is to explore a way to reshape the business ecosystem for existing industries by comparing traditional and Shanzhai networks in China. The…

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Abstract

Purpose

The purpose of this paper is to explore a way to reshape the business ecosystem for existing industries by comparing traditional and Shanzhai networks in China. The research is also conducted on the supporting activities by service intermediaries in the ecosystem.

Design/methodology/approach

This research starts with a literature review on firms' strategy of industry maturity from three perspectives, including technology orientation, innovation orientation, and network orientation. The approach of multiple case studies is adopted to unveil the reshaping process of the business ecosystem. Two types of networks are mapped: the traditional mobile companies' network and the Shanzhai network. Intra‐network and inter‐network cross‐case analyses aim to generate the research findings and provide implications for different ecosystem players.

Findings

First, the relationship between industry and the business ecosystem is placed into a two by two matrix. Second, in order to reshape the business ecosystem, the traditional network prefers geographical dispersion to other countries to establish a new ecosystem, whereas the Shanzhai network brings niche substitutes to cut down industry entry barriers. Third, government agencies, as one of the service intermediaries, not only support the traditional network dispersion by providing preferential policies, but also support the reshaping process enabled by the Shanzhai network with legal guidance and resource capture. Fourth, other service intermediaries such as law firms, technology services, talent searchers, financial and industry associations, have greater impact on the Shanzhai network than on the traditional network. Fifth, from the comparison between these two networks, strategies to reshape the ecosystem can be differentiated in five aspects: frugal solution, platform enablement, organization recentralization, downstream innovation, and regulation adaptation.

Research limitations/implications

This research further develops the observations into service intermediaries not only in core business but also in the extended level of the business ecosystem. The Shanzhai phenomenon also provides an excellent example implicating classical theories like cluster, innovation and global manufacturing virtual network. From a methodology perspective, this research combined the roadmap methods and cross‐case analysis. However, this study focuses more on Shanzhai network study than the traditional network.

Practical implications

Five nurturing strategies implicate small firms in the Shanzhai network and large firms in the traditional network as well as service intermediaries.

Originality/value

This paper is the first one to deeply study the relationship between industry and the business ecosystem in China, and the reshaping process of a mature business ecosystem from the traditional network, Shanzhai network and service intermediaries' perspectives.

Details

Journal of Science and Technology Policy in China, vol. 2 no. 2
Type: Research Article
ISSN: 1758-552X

Keywords

Article
Publication date: 26 February 2010

Sheng Zhu and Yongjiang Shi

The purpose of this paper is to explore an indigenous innovation phenomenon – entitled the Shanzhai phenomenon – which has emerged in the Chinese mobile phone industry…

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Abstract

Purpose

The purpose of this paper is to explore an indigenous innovation phenomenon – entitled the Shanzhai phenomenon – which has emerged in the Chinese mobile phone industry, and to understand its value creation network and operational mechanism, as well as to recognize its policy implications in regional and industrial developments.

Design/methodology/approach

Although the Shanzhai phenomenon emerged from the end of 2008, detailed understanding of its systems and operational mechanism is still very limited, partly because of its secrecy and dynamics in the value chain operations. Based on characteristics of the Shaizhai phenomenon, the paper focuses on three levels of the phenomenon – regional historical, regional industrial specific, and typical Shanzhai mobile phone project levels – to pursue a comprehensive understanding of the Shanzhai system and its emerging environments. At the regional and industrial level, the combined approaches of interview and secondary data collection is adopted. At the Shanzhai project level, a case study approach is conducted by focusing on the project and its whole value chain, from the idea creation towards detailed product design, production and integration, as well as its distribution.

Findings

Chinese government has called for indigenous innovation to upgrade Chinese manufacturing capability and value creation as well as appropriation. Based on the fast growth of the Chinese indigenous mobile phone industry in the last two years, the Shanzhai manufacturing system is recognized as a new positive alternative way for Chinese manufacturing companies to achieve this aim. Behind the Shanzhai phenomenon, there is a strong globally specialized and collaborated network enabling the down‐stream Chinese small‐ and medium‐sized mobile phone companies to very quickly respond to customers' demands or lead the demands. This new type of alternative innovation system is transforming unaffordable luxury goods into affordable for normal consumers. Because of its mass volume and involvement, however, government policies to harness the energy and development direction become essential.

Research limitations/implications

This research is just a very early stage of preliminary observation. From the methodology perspective, it provides background information about Shanzhai phenomenon and an in‐depth case study about a Shanzhai project. Comprehensive understandings of the Shanzhai phenomenon in terms of its behaviours, systems constructs and patterns, trajectories in the future and implications for policies will be achieved only at a much later date.

Practical implications

ShanZhai manufacturing might be one possible alternative innovative paradigm in some sectors of China.

Originality/value

This is the first academic research paper to offer relatively comprehensive and systematic observations about the emerging ShanZhai manufacturing system in the largest developing country.

Details

Journal of Science and Technology Policy in China, vol. 1 no. 1
Type: Research Article
ISSN: 1758-552X

Keywords

Article
Publication date: 7 March 2016

Rongwei Ren, Lei Yu and Yunxia Zhu

This paper aims to study the evolution of innovation-based dynamic capabilities in informal copycat-style firms. As a kind of informal economical organizations…

Abstract

Purpose

This paper aims to study the evolution of innovation-based dynamic capabilities in informal copycat-style firms. As a kind of informal economical organizations, copycat-style firms in many emerging economies play an important role in their development of the economics. The development of Shanzhai firms, Chinese-style copycat firms, from imitation to innovation has become an important micro-foundation of China’s economic growth and the manufacturing development. With the cluster development of the Chinese mobile phone industry as the macro and industrial environment background, this paper chose Beijing Tianyu Communication Equipment Co. Ltd as the typical example of innovation in Shanzhai firms and studied the evolution of innovation-based dynamic capabilities in this company.

Design/methodology/approach

This paper chose Beijing Tianyu Communication Equipment Co. Ltd as the typical example of innovation in Shanzhai firms and studied the evolution of innovation-based dynamic capabilities in this company by adopting the leading-edge dynamic capability theory, innovation theory and industrial cluster theory. The authors further discussed how to improve the dynamic capabilities in Shanzhai firms in China.

Findings

It is finally suggested that Shanzhai firms should reduce innovation failures and lower damage degree of dynamic capabilities through consistent innovation and paying attention to their innovation improvement.

Originality/value

It will be very significant to research the survival or diminishing of Shanzhai firms from a theoretical perspective, which will eventually enhance property right protection and innovation development in China.

Details

Journal of Entrepreneurship in Emerging Economies, vol. 8 no. 1
Type: Research Article
ISSN: 2053-4604

Keywords

Article
Publication date: 17 September 2019

Fu Lai Tony Yu and Diana S. Kwan

The purpose of this paper is to explain the miraculous rise of the mobile phone industry in China in particular and China’s impressive industrial growth in recent decades…

Abstract

Purpose

The purpose of this paper is to explain the miraculous rise of the mobile phone industry in China in particular and China’s impressive industrial growth in recent decades in general.

Design/methodology/approach

This paper uses qualitative or story-telling approach for empirical analysis. Specifically, it uses case studies to illustrate the authors’ arguments.

Findings

Utilizing the theory of imitative strategies of latecomer firms and I.M. Kirzner’s concept of entrepreneurial alertness, this paper argues that adaptive entrepreneurs in China’s phone industry survive by being alert to profit opportunities, flexible and adaptable to the changing environments. With limited resources and low technological capabilities at the beginning, Chinese phone makers conduct replication via reverse engineering. Through entrepreneurial learning and imitation, they are able to make indigenous or incremental innovation. The modified models with functions compatible to different groups of consumers and sold at low prices are able to penetrate the low-end markets in the Third World nations.

Practical implications

The authors’ explanation on the success of China’s mobile phone industry sheds light on broader China’s industrial growth as a result of economic reform.

Originality/value

Most studies on China’s mobile phone industry focus on technological analysis, without acknowledging the role of entrepreneurship. This study fills the gap.

Details

Asian Education and Development Studies, vol. 9 no. 3
Type: Research Article
ISSN: 2046-3162

Keywords

Book part
Publication date: 22 November 2014

Erika Kuever

To show that Chinese consumers are constantly redefining and revaluing goods along the axes of the real and the false, with little regard for legal definitions of brand…

Abstract

Purpose

To show that Chinese consumers are constantly redefining and revaluing goods along the axes of the real and the false, with little regard for legal definitions of brand authenticity or “fakeness.”

Methodology/approach

The data was collected through interviews, focus groups, observations, and casual conversations over 16 months of ethnographic research in Beijing, China.

Findings

In their everyday consumption practices and navigation of a complex and often dangerous marketplace, Chinese consumers categorize products based on their perceived “truth.” The paper introduces a typology that describes these local categories and explains their utility for consumers.

Research limitations/implications

The data was primarily conducted in an urban capital with a highly educated and high-average-income populace, thus it does not represent all Chinese consumers or a statistical sample.

Practical/social implications

This paper explains how the same globalizing processes that helped brands establish themselves in the Chinese market now threaten the capability of all brands to gain and retain the trust of consumers

Originality/value

By explaining how new calculations of value are being produced under glocalized regimes of manufacture and distribution, this research makes an important contribution to our understandings of brands and their limits.

Details

Consumer Culture Theory
Type: Book
ISBN: 978-1-78441-158-9

Keywords

Book part
Publication date: 9 March 2015

Jingzhong Ye and Huiyang Fu

In any time and space and under any circumstance, we find peasants are never passive actors in their livelihoods and rural development. Instead, they always create space…

Abstract

In any time and space and under any circumstance, we find peasants are never passive actors in their livelihoods and rural development. Instead, they always create space for manoeuvre in order to make changes. This chapter analyses the innovative actions taken by the majority of rural inhabitants in rural areas during the overwhelming modernization process, so as to affirm that peasants are the main actors of rural development. It is they who have shaped the transformation of rural societies and the history. Through the analysis, this chapter concludes that rural development is not an objective, a blueprint nor a design. It is not the to-be-developed rear field in modernization. It is not the babysitter for cities, nor a rehearsal place for bureaucrats to testify their random thoughts. Rural development is what peasants do. The path they have chosen reveals scenery so different from modernization. If we regard development as a social change, or a cross with influential meanings, we could understand rural development as peasants’ victories over their predicament. Villages accommodate not only peasants, but without peasants villages would surely vanish. In this sense, the most important part in rural development or rural change is peasants – their conditions and their feelings.

Details

Constructing a New Framework for Rural Development
Type: Book
ISBN: 978-1-78441-622-5

Keywords

Book part
Publication date: 10 December 2018

Ruoqing Zhang and Wenkai Zhou

The objective of this chapter is to interpret a supply chain as an ontological entity with being-in-the-world of spacetimemattering. A case study approach is adopted to…

Abstract

The objective of this chapter is to interpret a supply chain as an ontological entity with being-in-the-world of spacetimemattering. A case study approach is adopted to reveal the strategies undertaken by one of China’s fastest growing Internet companies – Xiaomi Inc. – to create competitive advantage through its management of product design and supply chain integration. Utilizing publicly available data, we analyze the company with quantum storytelling and network analysis techniques. Our analysis concludes that Xiaomi’s success originates from two aspects. First, Xiaomi is a good storyteller, who makes stories appealing to customers by involving them into product design and branding. Second, Xiaomi’s parsimonious supply chain substantially improves its market responsiveness and reduces disruption risks; more importantly, it helps to offer products of great value to customers.

Details

The Emerald Handbook of Quantum Storytelling Consulting
Type: Book
ISBN: 978-1-78635-671-0

Keywords

Article
Publication date: 29 January 2020

Zheng Li, Jun Li, Jin Chen and Tsvi Vinig

This is a special issue of Chinese Management Studies and this study aims to engage with debates on innovation in China and to provide new insights for innovation research…

Abstract

Purpose

This is a special issue of Chinese Management Studies and this study aims to engage with debates on innovation in China and to provide new insights for innovation research in the context of China, seeking to develop a greater understanding of the concept of “innovation with Chinese characteristics”.

Design/methodology/approach

This study reviews the Chinese innovation management literature in general and the selected papers in this special issue in particular and proposes two new directions for future research.

Findings

The nine papers that constitute this special issue present research on important aspects of innovation in China, ranging from the effectiveness of government subsidisation for innovation, the impact of fiscal decentralisation on innovation, the role of management behaviour in promoting (or discouraging) innovation and the effects of differing business models on innovation. These papers shed valuable new light on the theory and practice of innovation in China. The papers are discussed in the context of four primary arguments about innovation management in China identified from the broader literature in the field. These relate to the pattern of China’s innovation performance over time, the reasons for its effectiveness, the role of alliances and influences of indigenous factors. It is also shown that management of the internationalisation of innovation and of efficient internal innovation are two important directions for future research on Chinese innovation in an era of de-globalisation.

Originality/value

The studies presented here provide valuable contributions to theory building in innovation research, as well as some important ideas for directions of future research on innovation in China in the new era of de-globalisation.

Details

Chinese Management Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1750-614X

Keywords

Content available
Article
Publication date: 16 June 2020

Zheng Li, Jun Li, Jin Chen and Tsvi Vinig

Abstract

Details

Chinese Management Studies, vol. 14 no. 2
Type: Research Article
ISSN: 1750-614X

Article
Publication date: 4 November 2013

Sunny Li Sun and Yanli Zhang

How do different corporate governance structures fare under conditions of fundamental environmental transformations? Treating governance structure as a knowledge…

Abstract

Purpose

How do different corporate governance structures fare under conditions of fundamental environmental transformations? Treating governance structure as a knowledge distribution mechanism embedded in institutional frameworks, the paper aims to propose that the efficiency of this knowledge diffusing process will increase organizational survival under a punctuational change.

Design/methodology/approach

Using the case of Chinese banking industry during 1897-1927, a period of rapid technological, economic, and regulatory shifts.

Findings

Money shops (qianzhuang) with decentralized, open and extended governance structure were better able to adapt to rapid changes in the environment and had a higher survival chance than ticket stores (piaohao) with centralized, closed and internalized governance structure.

Research limitations/implications

When exogenous shocks dramatically change the environment, decentralized, open and extended governance structures can more easily discover new habitats in which a modified form of organization can thrive.

Originality/value

By examining the Chinese banking industry during the fundamental shift of the environment at the turn of the twentieth century, this paper sheds new wisdom on the understanding of the current turbulent world and helps us discover new solutions to cope with the institutional transition necessary to survive and prosper in the new world environment and pave the road ahead.

Details

Nankai Business Review International, vol. 4 no. 4
Type: Research Article
ISSN: 2040-8749

Keywords

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