Title: Catch-up strategy of an emerging firm in an emerging country: analysing the case of Huawei vs. Ericsson with patent data

Authors: Si Hyung Joo; Chul Oh; Keun Lee

Addresses: Department of Industrial Engineering, Chonnam National University, 77 Yongbong-ro, Buk-gu, Gwangju, 550-757, Korea ' Department of Global Business Administration, Sangmyung University, 20 Hongimun 2 – gil, Jongno – gu, Seoul, 110-743, Korea ' Department of Economics, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul, 151-742, Korea

Abstract: The telecommunication system industry has long been dominated by the Swedish giant, Ericsson. Huawei, a newly emerged firm from China, entered the industry, grew rapidly, and finally overtook Ericsson in terms of sales in 2012. Given the rarity of this phenomenon, this study seeks to explain how this became possible. We first verified that Huawei's market share catch-up is rather owing to its technological capabilities than its cost advantages. Then, our analysis of the European patents shows that Huawei grew rapidly by developing technologies that are different from those of Ericsson, and that the former relies more on recent and scientific knowledge in its innovation strategies. This study suggests that creating one's own technological path rather than following the path of the incumbents could be a viable strategy for successful technological catch-up.

Keywords: market share; technology catch-up; Huawei; Ericsson; patents; latecomers; catch-up strategy; emerging firms; emerging economies; patent analysis; telecommunications industry; telecoms; technological capabilities; innovation strategies.

DOI: 10.1504/IJTM.2016.080543

International Journal of Technology Management, 2016 Vol.72 No.1/2/3, pp.19 - 42

Received: 22 Jun 2015
Accepted: 31 Jan 2016

Published online: 29 Nov 2016 *

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