Fast followers in Asia

There are thousands of businesses here in Asia that follow a fast-follower innovation strategy* in fragmented industries with monopolistic competition. The monopoly that these firms have is often their location and the fact that people like variety. You'll often see the following scenario unfold in these industries: a new product offering will arrive on the scene with little fanfare. After some time, this product offering starts to garner attention from customers, other businessmen and, possibly, the media. At this stage, the new product offering moves from being fairly low key to highly visible: the visibility is then equated with profitability. Before you know it, the market is flooded with new entrants, keen to snatch a piece of the economic action from other businesses (usually small, family owned firms). Some of these fast followers will be successful, while others will make a loss. The weird thing is that, from the outside, it is very difficult to distinguish the loss-making firms from the profitable ones, as they all appear to be reasonably busy. Go to any Asian city and you'll see this scenario played out time and time again.

In situations like the one above, it's really important to think about business model innovation and value innovation to avoid getting caught up in the inevitable price war. There is a free article from the authors of Blue Ocean Strategy on value innovation HERE.

* (Crawford [1980] uses the term "adaptive" innovation strategy)
ADAPTIVE: The firm chooses to wait and let others lead, and then to quickly adapt or modify the product. By means of “innovative imitation,” it seeks to be second but best.