Laggards go beyond catching up to become niche champions: a longitudinal case study in China

Using a longitudinal case study on Cixing, which is a leading Chinese player in the flat knitting machine industry, this paper explores the process in which laggard firms catch up and exceed catching up to become niche champions in China. We propose a theoretical framework that illustrates the significance of contexts and response strategies for niche champions at different stages, focusing on the market and technology perspectives. In particular, the context is formed by the market ladder and technology modularization, requiring laggard firms to adopt appropriate market development and technology learning strategies in order to respond to the environment and achieve growth. During the catch-up stage, these companies should employ a market leveraging strategy and a technology deconstruction strategy to match the incumbents in the context of a pyramidal market ladder with low technology modularization. In the beyond-catch-up stage, as incumbents, they should adopt a market repositioning strategy and a technology reconstruction strategy to evolve into niche champions in the context of an upgraded market ladder with high technology modularization. Our research contributes to the literature on catch-up and niche champions by elucidating the process, contexts, and strategies of laggards in catching up and becoming niche champions in the global market. Practical insights are also offered to firms and policy makers in emerging economies.