Entrepreneurial learning in China’s low-end mobile phone market

Abstract

PurposeThe 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/approachThis paper uses qualitative or story-telling approach for empirical analysis. Specifically, it uses case studies to illustrate the authors’ arguments.FindingsUtilizing 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 implicationsThe 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/valueMost studies on China’s mobile phone industry focus on technological analysis, without acknowledging the role of entrepreneurship. This study fills the gap.