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A Research on Building Competitive Advantage Through Imitative Innovation: An Alternative Strategy for the Startups

Author: Deule Aberl Jackson
Tutor: Cheng Guoping
School: Wuhan University of Technology
Course: MBA
Keywords: Competitive Advantage Imitative Innovation Startup Company Counterfeit Technology Development
CLC: F272
Type: Master's thesis
Year: 2009
Downloads: 101
Quote: 0
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Abstract


As a starting company struggles to build and sustain its competitive advantage, learning from the leading and successful companies is an indispensable approach. In the course of learning, a company may decide to follow a strategy of copying the creativity of industry leaders, modifying each copy enough to give it some originality and market value. When this process succeeds, this starting company will have managed to kick start the process of building its competitive advantage, further learning, improvements and later on innovation will place the startup at the technology arena with leading companies necessary for competitiveness in the business. This research has considered imitative innovation as a strategy suitable for startup companies. Using questionnaires, case study, interviews, personal observation supported by theories and literature review, the research has conducted a study from some provinces with highest number of technology related startup companies in China. The study’s objective was to understand what approach Chinese startup companies use to acquire technology, the motives these startups have when adopting imitation strategy, the role of Chinese government in the process of technology acquisition and building competitive advantage, and finally what lesson Tanzania startups draw from the Chinese story.Chinese startup companies recognize the role of technology in the development of the enterprise and the industry in general. Foreign Direct Investment (FDI) through joint ventures and trade imports are the main sources of technology for the startups. Regarding the motives for the technology acquisition strategy, respondents acknowledged the need of imitating the best companies during the uncertainty times, with more than a half of respondents admitting to combine short term and long term benefits in their technology development strategy. Chinese government measures on joint venture policies, brain drains and incentives were acknowledged to help the startups struggle in technology acquisition, assimilation and improvements. Tanzania despite having well drafted technology development policies, strategic actions are needed in technology acquisition and assimilation and improvement. The researcher sees an opportunity for the Chinese startups to use the flow of FDI to develop the technology base, and fight against short term gains-counterfeiting and piracy, while Tanzania need to do much on reverse engineering and learning from China and other investors in collaboration with technology stakeholders.

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