The Building Mechanism And Evolution Path Of Latecomer Firms’ Optimal Distinctiveness

One of critical "strategic dilemma" that latecomer firms may encounter during catch-up stage is to be "similar" with or "different" from the incumbents.Being similar implies that latecomers simply attempt to follow and imitate by acquiring external resource,such as importing advanced technologies,whereas being different indicates the accumulation of resource internally and a different development path or trajectory from those of incumbents.For this question,there are two opposite voices.On the one hand,scholars like Kim,observed that latecomers tried to catch-up with advanced countries by assimilating and adapting the mature and obsolete technology of incumbents.On the other hand,scholars like Lee,argued that latecomers did not simply follow previous paths of technological development,rather,they sometimes skipped certain stages or even created their own paths that differ from those of industry forerunners.These two viewpoints have important theoretical significance for deconstructing latecomers’catch-up strategies,however,both are based on static perspectives.Actually,latecomer firms often adjust the resource building logic and reconcile competing demands for differentiation and similarity according to the characteristics of different catch-up stages.Therefore,what is the evolution path of latecomer firms’ resource building logic?This study deeply explores this question by introducing resource orchestration perspectives.As the newest development of resource-based view(RBV),resource orchestration tries to open the "blackbox" of value creation process by focusing on how managers exploit resources.It includes three sub-processes,namely structuring,bundling and leveraging.It analyzes the different focuses of these sub-processes to reveal the evolution path of value creation.In recent years,it has been widely used in strategic management,innovation and entrepreneurship.In order to understand how latecomer firms balance the competing demands for differentiation and similarity during innovation catch-up,This study also incorporates optimal distinctiveness,a new development at the interface of strategic management and institutional theory,which stands for positive stakeholder perceptions about a firm’s strategic position that reconciles competing demands for differentiation and conformity.Current researches have proposed several orchestration mechanisms for attaining optimal distinctiveness,but most of them are based on static perspectives and few is process-orientation research.Therefore,the research question is how latecomer firms achieve optimal distinctiveness through resource orchestration during innovation catch-up?In details,this study attempts to answer a)how does optimal distinctiveness change during innovation catch-up?b)how does resource orchestration evolve during innovation catch-up?c)what is the driving mechanism of this evolution path?This study chooses longitudinal single case study to answer these questions by analyzing the innovation catch-up process of Inspur(1996-2019)in server manufacture industry.This study finds that the evolution process of latecomer firms’resource orchestration during innovation catch-up has evolved from compensatory orchestration to threshold orchestration and then to integrative orchestration.In the stage of building the essential knowledge base,latecomer firms give emphasis to acquire external resources,enrich current capabilities,and design exploiting market opportunities strategy for creating low-level competition advantages to compensate liabilities of market and technology,which shapes passive differentiation.During the transition process,in order to be similar with incumbents,latecomer firms tend to accumulate internal resource,stabilize current capabilities and pioneer new capabilities.What’s more,they pay more attention to deploy resource advantage strategy and exploiting market opportunities strategy to create partial strategic balance.However,during the stage of the building strategic capabilities,latecomer firms would like to focus on external and internal resource synergy,enriching and pioneering capabilities.In addition,they will deploy creating entrepreneurial opportunities strategy to be as different as legitimately possible to come true active strategic distinctiveness.This study also finds the driving mechanism of resource orchestration evolution:technological regimes to show clearly the direction of industrial development,market space to provide demand support and legitimacy to help latecomer firms to get stakeholder support.This study enriches the catch-up theories based on the process perspective,establishes a theoretical"bridge" between innovation catch-up and optimal distinctiveness and expand the application of resource orchestration in the catch-up situation.Meanwhile,this study also will provide implications for catch-up practice of other latecomer firms in Cliina.