The evolutionary path of technological capability and the choice of niche market: A longitudinal research from QOK corporation

The evolutionary path of technological capability and the choice of niche market in a niche firm, which is an important topic in innovation and strategy research, is of great significance to how domestic firms to access, to use, to protect technological capability in order to gain competitive advantage. Based on a case from QOK company, this paper is building a model to examine the dynamic relationship between the evolutionary path of technological capability and the choice of niche market. There are three results: (1) In the initial stage (or the early stage of a new market entry), a successful niche firm would utilize its imitation capability to enter an industrial section with low competition and high profitability with differentiation strategy. (2) In the development process, the niche firm´s technological capability was improved by technology diffusion, when a moderate entry into diversified markets was positively related to the improvement of the firm´s technological capability, as well as an excessive entry was negatively related to the improvement. (3) Developed to a certain size, the niche firm developed its core technological capability through the choice complementary asset and its indigenous innovation, and began to focus on its core niche market.