Case | HBS Case Collection | May 2010 (Revised June 2012)

From Imitation to Innovation: Zongshen Industrial Group

by Willy C. Shih and Nancy Hua Dai

Abstract

As Zuo Zongshen drove the transformation of the Zongshen Industrial Group from an early imitator in the motorcycle business to a company that increasingly focused on innovation as a way to get out of the hyper-competitive commodity business, he continually faced new challenges. The company had become a leader in gasoline powered motorcycles and small gas engines, but increasing taxes and restrictions on the use of motorcycles in congested urban areas had spawned a new industry, electric motorbikes, which posed a threat to the company's core business. Sourcing the technology for these e-bikes, and hiring and retaining the management and creative talent the company needed, were continuing challenges. The case traces the development of capabilities in the Zongshen Industrial Group, how it used the early imitation phase to foster rapid technological learning and upgrading, and how it used a unique corporate structure and listing strategy to finance the acquisition of important technologies.

Keywords: Experience and Expertise; Learning; Investment; Disruptive Innovation; Knowledge Acquisition; Organizational Change and Adaptation; Organizational Structure; Competitive Strategy; Manufacturing Industry; Motorcycle Industry; China;

Citation:

Shih, Willy C., and Nancy Hua Dai. "From Imitation to Innovation: Zongshen Industrial Group." Harvard Business School Case 610-057, May 2010. (Revised June 2012.)