From lagging behind to going beyond: windows of opportunity and latecomers' catch-up strategies

Abstract

Purpose To answer the questions: what roles windows of opportunity act in the catchup process of latecomers, what strategies latecomer enterprises should adopt to size windows of opportunity to catch-up with incumbents even going beyond? Design/methodology/approach This paper studies the catch-up history of the Chinese mobile phone industry and proposes a sectoral innovation system under scenario of technology paradigm shifts. Then a history-friendly simulation model and counterfactual analysis are conducted to learn how different windows of opportunity and catch-up strategies influence the catch-up performance of latecomers. Findings Results show latecomers can catch up with technology ability by utilizing technology window and path-creating strategy. However, catching up with the market is not guaranteed. Demand window can help latecomers to catch up with market as it increases their survival rates, different sized windows benefit different strategies. However, it also enlarges incumbents' scale effect. Without technology window technology catch up is not guaranteed. Two windows have combination effects. Demand window affects the “degree” of change in survival rates, while the technology window affects the “speed” of change. Demand window provides security; technology window provides the possibility of a breakthrough for technology ability. Practical implications The findings of this paper provide theoretical guidance for latecomer enterprises to choose appropriate catch-up strategies to seize different opportunity windows. Originality/value This paper emphasizes the abrupt change of industrial innovation system caused by technology paradigm shifts, which makes up for the shortcomings of previous researches on industrial innovation system which either studied the influence of static factors or based on the influence of continuous changes.