Exploring the industry follower's entry strategies from China's bandit business model

Purpose – This present study attempted to examine the difference between brand‐name and bandit technology companies in terms of operating models. Furthermore, the paper aimed to investigate the origin and developmental model of bandit. Design/methodology/approach – This study compared the open innovation approach against a closed one from the perspective of competitive strategies. This study used the content analysis and qualitative system dynamics (QSD) approach to explore the competitive strategies and inhibitory factors of bandit business model, and subsequently presents a causal‐effect loop of business operations development in different stages. Findings – Bandit business model could be divided into three stages, according to the business operations development, namely “growth, inhibition, and re‐growth”. It often faces obstacles, when a bandit business expands to a certain level, stemming from the consequently disadvantageous conditions which limit the enterprise development. A bandit business will not remove such obstacles unless it reinforces its impregnable core values. Originality/value – This study contributed the attempt to use the qualitative system dynamics (QSD) approach to explore the competitive strategies and inhibitory factors of emerging business model as “bandit”. As bandit products generate high utility for consumers and easily penetrate a demand‐driven market, the Chinese bandit economic behavior (including copycat business practices) omnipresent in the economic market has triggered a controversy across the society. The findings in bandit business model uncovered the reasons that encourage the founding of small‐sized start‐up firms by practitioners, and showed the unseen path for business and innovation model research in the future.