Catch-up strategy of latecomer firms in Asia: a case study of innovation ambidexterity in PC industry

Abstract

Over the last decade, more and more East Asian firms have moved beyond imitation and are delivering innovative products and services to the market. This study examines (a) how a latecomer firm in East Asia transformed its business model in pursuit of manufacturing its own brand and (b) how it managed its exploration and exploitation of the market and technology in response to growth and competition. Given the lack of research on firms transitioning from contract manufacturing (CM) to own-brand manufacturing (OBM), this study offers fresh insights into how Acer, a leading Taiwanese original equipment manufacturer (OEM), has pursued new ways of creating value using an innovation ambidexterity strategy to maximise its customer value and boost performance. Acer is chosen for this case study because of its significance and impact in the global PC industry. Data were collected through interviews and secondary data analysis. Our findings show that innovation ambidexterity is a deliberate transition process, taking firms years to reshape their business models. Our findings also present a viable solution to sustainable competitive advantage and keys to firms' renewal in face of environmental change. This study contributes to the innovation management literature, and the use of the innovation ambidexterity framework examines how firms explore new ways of creating and capturing value and face challenges.