Huawei’s Leapfrogging to Overtake Ericsson

Chapter 8 explores how Huawei was able to emerge as the leader in the telecommunications system sector, overtaking the incumbent Swedish giant Ericsson. It answers this question by focusing on whether a latecomer firm trying to catch up uses technologies similar to or different from those of the forerunners. The study investigated patents by Huawei and Ericsson and found that Huawei relied on Ericsson as a knowledge source in its early days but subsequently reduced this reliance and increased its self-citation ratio to become more independent. The results of mutual citations, common citations, and self-citations provided strong evidence that Huawei caught up with or overtook Ericsson by taking a different technological trajectory. Huawei developed its technologies by relying on more recent and scientific knowledge; in terms of citations to scientific articles and citation lags, Huawei extensively explored basic research and up-to-date technologies to accomplish its technological catch-up. This study suggests that leapfrogging by exploring a new technological path is a possible and viable catch-up strategy for a latecomer. Moreover, Huawei’s case re-confirms the hypothesis that catch-up in technological capabilities tends to precede that in market share. Huawei overtook Ericsson in terms of quantity and quality of patents before annual sales. In summary, the results suggest that Huawei’s catch-up with Ericsson in the telecommunications equipment market is owing not only to its cost advantage, the large domestic market, or the Chinese government’s support but also more importantly to its technological leapfrogging based on its technological strength and independence.

EXPRESS: Effective Sme Import Strategy: Its Drivers, Moderators, and Outcomes

We propose a conceptual model of the drivers, moderators, and outcomes of a firm’s effective import strategy, anchored on the Dynamic Capabilities and Industrial Organization theories. While the former theory explains the mechanism through which dynamic capabilities facilitate import strategy effectiveness that boosts competitive advantage and ultimately enhances financial performance, the latter theory sets the foundation for explaining the contingency role of both competitive intensity and environmental uncertainty on translating effective import strategy into competitive advantage. The model was tested using a sample of 151 British importers of small-to-medium size, with results indicating that possession of high levels of certain dynamic capabilities of a generic (i.e., adaptive and entrepreneurial) and import-specific (i.e., source identification and market development) nature are conducive to import strategy effectiveness. The latter was found to generate both product-differentiation advantage and low-cost advantage, although this was contingent on the degree of competitive intensity and environmental uncertainty prevailing in the importer’s home market. Finally, it was confirmed that both product-differentiation advantage and low-cost advantage have a favorable impact on the importer’s financial performance.

Brand Spillover as a Marketing Strategy

When a weak-brand firm and a strong-brand firm source from a common contract manufacturer, the weak-brand firm may advertise this relationship to promote its own product. This paper investigates whether the weak-brand firm should use such brand spillover as a marketing strategy and how this decision depends on the firms’ characteristics and market conditions. We develop a game theoretic model consisting of one contract manufacturer and two firms with asymmetric brand power. The contract manufacturer determines the wholesale prices for the two firms and then each firm decides whether to source from the contract manufacturer. If both firms outsource to the contract manufacturer, then the weak-brand firm may choose whether to promote its product through brand spillover. Although brand spillover improves the attractiveness of the weak-brand firm’s product at no cost, we find that the weak-brand firm should not use brand spillover if (1) its original brand power is sufficiently low or (2) the contract manufacturer does not have a significant cost advantage. Interestingly, the adoption of brand spillover by the weak-brand firm can benefit all three parties under certain circumstances. Nevertheless, when the contract manufacturer has a significant cost advantage, in equilibrium the strong-brand firm will be hurt by brand spillover and hence should take actions to prevent it. This paper was accepted by Dmitri Kuksov, marketing.

IImplementasi Strategi Keunggulan Biaya dalam Usaha Express Laundry Purwakarta

The number of businesses in laundry resulted in the number of competitors getting tougher. One of the management strategies that can be applied in creating and increasing competitive advantage is to implement a cost advantage strategy. This study aims to determine the cost advantage strategy in the Express Laundry business in Purwakarta. Data collection techniques in this study by conducting direct observations in the field and interviews with informants in accordance with the problems studied. The type of research used is descriptive qualitative. The result of this research is the implementation of a cost advantage strategy in the laundry business, Express Laundry provides quality products at low prices to be an attraction for customers. Armed with good service and affordable service prices, this business can have high market potential. Good service quality from a laundry or laundry business is the most important thing in providing satisfaction to customers. Keywords: Cost Advantage, Laundry Business, Express Laundry

Chinese Cost Innovation, the Shanzhai Phenomenon, and Accelerated Innovation

This chapter traces the evolution of Chinese innovation strategies starting with cost innovation, accelerated innovation, and its roots in Shanzhai and concluding with digital innovation, which is at the leading edge of Chinese innovation. The distinctive features and antecedents of each of these Chinese approaches to innovation are explained and illustrated. Cost innovation involves using Chinese cost advantage in radically new ways to offer customers around the world dramatically more for less. Accelerated innovation is achieved by re-engineering innovation processes to increase the pace of innovation while reducing costs. The genesis of these capabilities to accelerate innovation can be traced back to Shanzhai: the practice of rapidly copying competitors’ products. Finally, digital innovation by Chinese companies using big data, machine learning, and artificial intelligence algorithms is explored.

Innovation as A SME Recovery Strategy during The Covid-19 Pandemic in Yogyakarta

The COVID-19 widespread has hurt all economies around the world. In this context, it is hoped that many SMEs will implement a new normal strategy pattern that requires changes in business and management after the pandemic. This research aims to present a multidisciplinary methodological approach to guide SMEs in innovating products for new markets and utilizing limited resources with appropriate strategies. The results showed that. In Yogyakarta, Indonesia, the SME industrial sector prefers a differentiation strategy over cost advantage to drive SME performance. This sector has introduced the practice of using e-commerce which has initially been to reduce production costs to be unique innovations in the market with unique or different products and services offered by companies and improve the performance of SMEs.

Clonal variation in coppiced and uncoppiced growth, root-sprout stem formation, and biomass partitioning in Salix interior on two highly disturbed site types

Salix interior Rowlee (INT), a wide-ranging North American willow from the small taxonomic group Salix sect. Longifoliae, is notable for its ability to form multi-stemmed vegetative stem colonies arising via root sprouts (RS) from a shallow horizontal root network. This study quantifies biomass production for both 1-yr-old coppiced plants and the original 4-yr-old plants, as well as for the RS stems associated with each ortet (original mother plant) using eight selected genotypes established on two distinct site types. Significantly greater coppiced and uncoppiced ortet stem dry mass was recorded on the coarse-textured, shale rock overburden (SO); possibly due to significantly greater fertility, compared to adjacent gravel outwash deposits (GD), which had greater RS stem mass. Significant clonal differences, as well as site type × clone interactions, were found for ortet stem dry mass, especially on SO sites, When expressed as a fraction of total stem dry mass produced on 2 m × 2 m biomass plots, the RS component represented a significant 57% of total stem dry mass per plot on GD sites. The use of colony-forming willows such as INT minimizes the need for periodic replanting, providing a cost advantage over conventional short-rotation, coppice-based woody biomass plantations using species that do not have the ability to reproduce via root sprouting.

OVERCOMING ABSOLUTE AND COMPARATIVE ADVANTAGE: A REAPPRAISAL OF THE RELATIVE CHEAPNESS OF FOREIGN COMMODITIES AS THE BASIS OF INTERNATIONAL TRADE

David Ricardo indicated in his famous numerical example in the Principles that it would be advantageous to Portugal to import English cloth made by 100 men, although it could have been produced locally with the labor of only 90 Portuguese men. As the production of the cloth required less quantity of labor in Portugal, it has been commonly inferred that this country had a production cost advantage over England in cloth making. This inference will be proven wrong here by showing that the English cloth had a lower cost of production than the Portuguese cloth. This finding refutes the widespread belief that Ricardo had formulated a new law, principle, or rule for international specialization, known as “comparative advantage.” He used the same rule for specialization as Adam Smith in the Wealth of Nations. Thus, the popular contraposition of Smith’s absolute versus Ricardo’s comparative cost advantage has to be dismissed.

Demand-Enhancing Services for Tangible Products in a Distribution System With Online and Off-Line Channels

Services such as delivery, warranty, and product returns that are bundled with various tangible products play a critical role in their market performance. As manufacturers strive to streamline operations and deliver consistent services across channels, this article analytically examines whether those who sell their products directly online and off-line through retailers should direct control, delegate to retailers, or outsource to third parties the delivery of these services. Our main findings are as follows. Manufacturers should not outsource demand-enhancing services to third parties if they do not ensure relatively low operating costs, as they reduce the level of service provided to customers. Assuming no channel partner has a cost advantage in service delivery, manufacturers should directly control the provision of services that are used identically by online and off-line customers. Manufacturers may not be able to directly and cost effectively offer services that are used differently by online and off-line customers. In such a context, depending on the relative sizes of off-line and online market bases, retailers may be considered either as single providers of the service for both online and off-line customers or jointly with manufacturers as providers for off-line customers only. We discuss the implications of these findings.