How do latecomer firms achieve disruptive innovation? A business ecosystem perspective

Abstract Based on previous research related to disruptive innovation and ecosystem governance, this paper aims to explore the process by which latecomer firms achieve disruptive innovation through building ecosystems. We adopted a single-case study approach to achieve a deeper theoretical construction of this emerging phenomenon. An emerging Chinese firm was selected through theoretical sampling. We used the Gioia methodology to code and analyze the extensively collected primary and secondary data. On this basis, we reveal the process by which it achieves disruptive innovation and examined the role of business ecosystem governance in this process. Our findings illuminate the dynamic process by which latecomers achieve disruptive innovation, showing that the latecomers can achieve both disruptive technology design and disruptive market reconfiguration with the help of the business ecosystem. The study also reveals two main approaches to ecosystem governance, namely relationship governance and value governance, which play different roles in different periods of ecosystem development. Consequently, our study enriches theories related to business ecosystem governance and disruptive innovation in the latecomers. Important management implications suggest that the latecomers must not only have the ability to create new advantages in differentiation technologies, but more importantly, to open up corresponding markets for maintaining technological advantages.