Shanzhai Case Solution

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What are the environmental factors that help drive the Shanzhai phenomenon? * In china, peoples are fearless experimenter’s mindset. * Eye holes in regulations specified Shanzhai folks scope to grow. * protection law of IP is very poor.

* Comparatively weak, inconsistent or non-transparent business policy. * Shanzhai performers are very flexible & efficient vendors. What characteristics are critical to the success of Shanzhai handset companies? * Focuses on local market.

* Target mass customers.
* Short cycle time.
* Emphasis on cost.
* Modify product features & functions to customers’ requirements. * No investment in finished inventory, storing, logistically networks & sales staff. How have these characteristics been used by leading edge mainstream companies? * They targeted the low-end handset market in similar cities and rural districts. * Should sell their phones at point-of-sale in chain stores and supermarkets. * Paying generous commissions to the salespeople at the retail stores. * Use low quality and feasible features for the requirement of local customers. * Reduces the cost of phones.

4, What can mainstream companies do to mitigate the impact of Shanzhais?

To mitigate, or minimize, the impact of shanzhais, mainstream companies can attempt to develop products that are difficult to copy, both in design and functionality. This is difficult, however, when open innovation is so highly promoted and it will likely be imitated at some point in the future regardless. Mainstream companies should attempt to keep their products on the market as long as possible without imitation and invest heavily in R&D to continuously work on the next-best thing to introduce.
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