Research on product innovation mode based on modularity theory: A case study on Haier product innovation

Based on the modularity theory and taking Haier PTOI0 technology water heater as the case, the paper researches Chinese enterprises, product innovation mode and features, and reveals how Chinese enterprises product innovation capability forms and what competitiveness it has. Haier builds the capacity of internal modularity through combining model manager system, module manager system with marketization mechanism, and builds the capacity of external modularity through integrating upstream suppliers\´ core technologies on the open product innovation platform. The mode of " internal modularity + external modularity" exerts obvious and positive effects on product innovation of Haier: shortening life cycle of product innovation, reducing development cost, promoting diversification, enhancing reliability, increasing market competitive capability. Meanwhile, the mode also possibly hinders the systematic innovation and makes new product imitated easily, leading enterprises to fall into the situation of homogenization competition. The mode this paper discusses may have significant reference value for Chinese enterprise to strengthen product innovation capability and product competitiveness.