This study applies a resource-based perspective to investigate how competition by informal firms affects innovation in formal firms in China. By analyzing survey data, collected from 1,686 Chinese manufacturing firms, we find that formal firms tend to increase their rate of innovation when faced with informal competition. However, formal firms’ access to increased global supply chain collaboration mitigates the challenges presented to their rate of innovation by the informal firms. We present implications for future research, practice, and policy-making.

Learning outcomes: This paper aims to first, identify the external and internal factors that a company needs to analyze when formulating its digital platform strategy. Based on the framework of PESTNPG (political economic social and culture technological population and globalization) and internal analysis a company should analyze both internal and external factors to formulate its digital platform strategy. For companies from emerging markets the institutional-based market created by national or local governments is important for digital platform strategy. Second dynamic capability theory and its linkages to digital platform strategy. The dynamic capabilities view is considered as a primary theoretical lens in the strategy literature to analyze a company’s strategies to achieve sustainable competitive advantages. To carry out a successful digital platform strategy companies need to build strong dynamic capabilities to capture or create opportunities and reconfigure their resources simultaneously. Third the advantages and disadvantages of different digital platform strategies (i.e. an independent digital platform and online–offline integration platform) and the possible consequences and risks of different strategies. It is important to evaluate different types of digital platform strategies that require different capabilities in terms of business structure product structure revenue structure organizational structure and technology architecture. A company needs to link these capabilities to a digital platform strategy to enable the integration (or separation) of online business with offline business. It also increases the accuracy and efficiency of online business. Fourth key points of digital platform strategy implementation. Companies need to identify key profit models for their digital platform to promote business growth and financial returns. It is equally important to increase customer value by leveraging its digital exhibition platform and to learn to use digital technology to foster organizational dematerialization. Case overview/Synopsis: Zhejiang Meorient Commerce & Exhibition Inc. (hereinafter referred to as “Meorient”) was a leading company in the exhibition industry in China. The unexpected outbreak of COVID-19 plunged Meorient into a state of emergency that forced it to fight for survival. Further, China had launched a national strategy of Digital China, which created new market opportunities for Meorient. As a result, Meorient gradually developed and launched its digital exhibition services in 2015. Meorient suffered significant losses in 2020 due to COVID-19 and had to formulate a new strategy based on a digital exhibition platform in 2021. Chairman Pan Jianjun had two options. One was a purely digital platform strategy without the original offline exhibition business. The other one was an online and offline integration strategy. Which option was the best way forward for Meorient? Pan had to make a choice. Some of the top management team members believed Meorient should completely transform into a digital platform company and provide comprehensive online digital exhibition services. Over the previous 20 years, Meorient had accumulated a large amount of data from domestic and foreign exhibitors and professional buyers and had gradually developed a digital exhibition platform. It was one of the companies that pioneered digital transformation within China’s exhibition industry. More conservative thinking held that Meorient's strategy should focus more narrowly on the integration of online and offline exhibition businesses. Toward the post-pandemic era, China’s national strategy of “Digital China” accelerated the development of digital infrastructures. During such critical transitional period, Meorient had to choose wisely if it was to sustain its profits or even survive. Complexity academic level: The case is aimed at students in undergraduate, MBA, short course executive, EMBA or other executive education programs, especially where digital transformation is featured subject matter. Supplementary materials: Teaching notes are available for educators only. Subject code: CSS 11: Strategy

Knowledge mobility is more challenging in service innovation networks due to the nature of intangibility and co-development of service innovation. A central question is how to govern knowledge mobility for service innovation performance in such innovation networks. Given the inconsistent findings, more comprehensive research is needed to uncover the effects of contract-based and relation-based governance modes on knowledge mobility in service innovation network. Drawing from social exchange theory and network governance literature, this study examines how firms can employ relation-based and contract-based governance modes to affect interfirm knowledge mobility and collaborative innovation performance in service innovation networks. A survey of 308 knowledge-intensive service firms reveals a mediating effect of knowledge mobility on the relationship between relation-based governance mode and service collaborative innovation performance. Second, relation-based and contract-based governance modes have a negative joint effect on knowledge mobilizing in service innovation network. The findings bear important theoretical and managerial implications for innovation network governance in knowledge intensive services.