How Do Small Firms Survive Competition in China’s Emerging Air Purifier Industry?

Abstract

This study investigates small firms’ competitive strategy in the emerging air purifier industry in China. Based on archival and interview data, I argue that small firms may not avoid competition with large firms in both mainstream and niche markets, but they are likely to be accommodated by large firms. To survive, small firms are challenged more by the demand side than the competition side. It would be more helpful if they target the niche markets because these markets offer favorable conditions for them to reduce the negative impact of a major weakness they possess: the unknown brand. The study provides implications for a key question in the small business literature: whether small firms should be in large firms’ territory and compete with them.