Capability sequencing: strategies by township and village enterprises in China

摘要

Purpose - This study aims to identify and assess the strategies of township and village enterprises in China to capture competitive advantages. Design/methodology/approach - The paper employs a self-administered questionnaire survey approach, involving a sample of managing directors of township and village enterprises in the Fujian Province, China. Findings - The analysis identifies the causal linkages across time between firms' different capabilities. Labor-intensive industries and rural locations offer township and village enterprises (TVEs) opportunities to create capabilities to minimize costs. The cost minimization and systematic learning capabilities, in turn, lead to low-priced innovator positioning. It also suggests that the co-evolution and co-existence of different capabilities contribute to capability inimitability. Research limitations/implications - Future studies on Chinese TVEs should expand the empirical database and include TVEs in underdeveloped areas and to investigate how firms survive within severe resource limitations. Practical implications - The findings of this study indicate that dynamic capabilities are important not only for firms in rapidly changing environments, but also for those in relatively stable industries, such as labor-intensive industries. Firms should develop different capabilities over time and combine these into complex capabilities bundles. Originality/value - The findings from this study indicate that firms in developing countries can achieve cost leadership and differentiation, but the route to the destination has a path-dependent history.