Research on Motivations of Transnational Enterprises Carrying out Disruptive Innovation in Chinese BOP Market

Abstract

In recent years, some transnational enterprises began expanding their business to Chinese low-income consumer market, and get good return. From the view of disruptive innovation, it indicates that these transnational enterprises have carried out disruptive innovation strategy in the Chinese market. Based on disruptive innovation and BOP market theory, this paper shows that the main factors which motivate transnational enterprises to carry out disruptive innovation strategy in Chinese market are: the nature and scale of the Chinese market, and how to avoid local enterprises to become “destroyer”. On the other hand, it is necessary to develop the disruptive innovation capability for transnational enterprises to tap the above market. Key words: Transnational enterprises; Chinese market; Base of pyramid; Disruptive innovation