How do Latecomer Firms Capture Value From Disruptive Technologies? A Secondary Business-Model Innovation Perspective

Abstract

To fill the research gap between extant theory of disruptive technology and latecomer firms' business-model innovation practices in emerging economies, we explore the new latecomer advantage implied in the phenomena of overshooting and nonconsuming. Based on inductive theory building with a comparative case study, we find that latecomer firms, though disadvantaged in technological capabilities and market resources, can successfully introduce disruptive technologies from advanced economies into emerging economies through secondary business-model innovations. They provide cheaper, simpler, but good enough products or services that ordinary citizens in emerging economies can easily afford and access. How do latecomer firms capture value from disruptive technologies within the emerging economies context? While articulating an appropriate value proposition that is attractive for local customers is of great importance for those latecomer firms, they should also fully utilize strategic partners' complementary assets to build a unique value network embedded within local infrastructure. Thus, those latecomer firms tactfully bypass the substantial first-mover advantages and global advantages of multinational incumbents, and leverage their latecomer advantages such as low price and local savvy. Thus, latecomer firms should not ignore those disruptive growth opportunities within the large population of mass customers and nonconsumers in emerging economies.