Innovating to Create Value for the Mass Customers in Developing Countries: New Dimensions of Secondary Innovation

How to create value for the mass customers through innovation-whether technological innovation or business model innovation-has attracted increasing research attention from the field of strategy and innovation management, such as Christensen´s theory of disruptive innovation. Many local enterprises in China, like UTStarcom, have achieved great market success through business model innovation to provide cheap but good enough products or services that ordinary Chinese citizens can afford, rather than expensive ones with excessive functions. This exploratory work attempts to explore new potential source of latecomer advantage implied in the phenomena of overshooting, described by Christensen, and extends the theory of secondary innovation with new business model dimensions. A business model framework, comprising of value proposition and value network, is proposed to explain the process how a latecomer creates and realizes the economic value latent in the acquired technology for the mass customers in developing countries. Secondary innovation, in terms of value creation, can be conceived as an iterative process initiated by the discovery of a new business model for a technology-based acquisition which leads to development, production, and marketing tasks striving for the secondary commercial success of the acquired technology within a new value network especially in developing countries