Overcoming 'latecomer disadvantages' in small and medium-sized firms: evidence from China

Abstract

In this paper, we examine the fundamental difficulties faced, and specific strategies adopted, by small and medium-sized latecomers, in developing new technologies. We argue that it is necessary for these firms to overcome two types of latecomer disadvantages; that is, resource disadvantage and reputation disadvantage. We developed four propositions to deal with these disadvantages, and analysed two latecomers to illustrate the propositions. We find that developing effective strategies to gain support from non-customer stakeholders is of critical importance and the strategy of sticking to the development of the most advanced technology is effective in gaining support from these stakeholders.