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11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
11 shanzhai   china's ip stronghold
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11 shanzhai china's ip stronghold

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  • 1. Shanzhai in China
    1
  • 2. Types of Shanzhai
    Copy
    Parody
    Private Lebal (Baipai,) e.g., Kirkland at Costco
    New Brand
    2
  • 3. What Is Parody?
    3
  • 4. What is Parody
    A parody (pronounced /ˈpærədiː/; also called send-up or spoof), in contemporary usage, is a work created to mock, comment on, or poke fun at an original work, its subject, author, style, or some other target, by means of humorous, satiric or ironic imitation.
    It is known as Shanzhai in China
    4
  • 5. Parody Examples in China
  • 6. Parody Examples in China
    6
  • 7. Parody Examples in China
    7
  • 8. Parody Examples in China
    8
  • 9. Parody Examples in China
    Parody Lamborghini-Ferrari
    9
  • 10. What is Shanzhai
    Shanzhai (simplified Chinese: 山寨; pinyin: shānzhài) refers to Chinese imitation and pirated brands and goods, particularly electronics. Literally "mountain village" or "mountain stronghold", the term refers to the mountain stockades of warlords or thieves, far away from official control. "Shanzhai" can also be stretched to refer to people who are lookalikes, low-quality or improved goods, as well as things done in parody.
    10
  • 11. Shanzhai
    Learning focus is Cellular Phones
    11
  • 12. Causes of Shanzhai
    12
  • 13. Rancor
    Opium War 1839 – 1842
    Anglo-French Invasion in China (Second Opium War) 1860
    Eight-Nation Alliance 1900
    Russo-Japanese War 1904 – 5
    Sino-Japanese War 1937 – 1945
    13
  • 14. Survival of OEM
    The average OEM profit is less than 4%
    This number could be even lower if governments had not provided compensations.
    International brands’ can be 50% and do not want to reduce it.
    14
  • 15. Customization &Business Model Innovation
    Re-package, add-on for individual customers, delivery in 1 hour
    GSM Quad Band Dual SIM
    Quick Response Manufacturing
    15
  • 16. Quick Response Manufacturing
    In China’s cellular phone market
    An ecosystem
    Center – Media Tek’s Turn-key solution
    16
  • 17. Media Tek’s Turn-key solution
    One IC has Cellular phone, MP3, touch panel, … functions
    IC + software, all design problems solved at Media Tek
    Downstream companies (Independent Design House, IDH) only need to put on peripherals such as screens, cases, etc. radio receivers, etc.
    17
  • 18. Quick Response Manufacturing
    Synchronized procurement
    Product development, material movement, production, logistics, and distribution all achieved simultaneously.
    18
  • 19. Quick Response Manufacturing
    Production time – from one year to 1 months
    Need only 3 people – one contacting Media Tek, another find OEM, and the other selling products and collecting money
    19
  • 20. Blue Ocean & Disruptive Innovation
    To be discussed when we talk about Blue Ocean Strategy – Strategic canvas & Disruptive Innovation
    20
  • 21. Innovation from Imitation?
    21
  • 22. Innovation from Imitation
    Do only Chinese copy?
    Can innovation come from nowhere?
    22
  • 23. Copyright in the USA in 18 Century
    The first American "pirate“ – Benjamin Franklin
    A Philadelphia printer who re-published the works of British authors without seeking their permission or offering remuneration.
    The person who discovered electricity
    23
  • 24. Charles Dickens
    Dickens’ North
    American reading tours
    of 1842 and 1867-68
    Lobbied the
    American Congress
    to recognize the
    copyright of British authors
    24
  • 25. Charles Dickens
    During his first visit, made him anathema in certain political circles and in the American press
    25
  • 26. Webster Dictionary
    An AMERICAN dictionary of English Language
    26
  • 27. Japan and Korea’s Model
    Toyota's first production car - Model AA was introduced in 1936. It was heavily based on Chrysler Airflow and chassis and electrics were copied from Ford.
    In late 1930's Toyota and Ford had talked about a joint-venture but war interrupted talks.
    27
  • 28. Toyota & Chrysler
    28
    Toyota Model AA
  • 29. Toyota & Chrysler
    29
    Chrysler Airflow
  • 30. Scion
    30
  • 31. Scion
    31
  • 32. Scion
    32
  • 33. Scion tC
    MRSP US$17,000
    33
  • 34. Japan and Korea’s Model
    Almost every model of Hyundai is a copy.
    34
  • 35. Japan and Korea’s Model
    First: 2009 Mercedes Benz CL 550
    Second: Hyundai Sonata Revealed
    New Hyundai YF Sonata and Kia Cadenza are HOT (Report on November 10, 2009
    35
  • 36. More on Hyundai
    36
    Cadillac 2008 CTS
    2009 Sonata
  • 37. Taiwan follows US Patent Laws
    Results?
    37
  • 38. Innovation Needs Cash, Market, and Experience!
    38
  • 39. Failure of Patents
    39
  • 40. Patent Works?
    Innovation firms benefit from patents?
    Patents spur innovation? – no evidence
    But how about cost?
    How about industries? (cf. Biotech versus IT)
    40
  • 41. Cost/Benefit of Patents
    Profit for the US firms:
    1997 $8.4B – 1999 $9.3B
    2/3 in chemical and pharmaceutical companies
    Cost: domestic litigation alone:
    1997 $8B – 1999 $16B
    companies doing the most research and development are sued the most.
    41
  • 42. Intellectual MonopolyStory of Watt
    1768, Watt ‘repaired’ Newcomen engines ‘with substantial borrowing’ and applied for a patent
    Nothing much happened then
    42
  • 43. Intellectual MonopolyStory of Watt
    1775, patent almost expired
    Industrialist Matthew Boulton with good relationship with the parliament supported him.
    The patent was extended until 1800
    Watt spent more time engaged in legal action to establish and preserve his monopoly than he did in the actual improvement and production of his engine.
    43
  • 44. Intellectual MonopolyStory of Watt
    1790, the superior Hornblower engine was in production, Boulton and Watt went after him with the full force of the legal system.
    Many new improvements to the steam engine became available by 1804, but
    these innovations were kept idle until the Boulton and Watt patent expired
    44
  • 45. Intellectual MonopolyStory of Watt
    An important limitation of the original Newcomen engine could be fixed by a method patented by James Pickard, which prevented Watt from using it.
    The existence of a patent forced Watt to contrive an alternative less efficient mechanical device to fixed the problem.
    45
  • 46. Intellectual MonopolyStory of Watt
    It was only in 1794, after the expiration of Pickard’s patent that Boulton and Watt adopted the economically and technically superior device to fix the problem.
    46
  • 47. Intellectual MonopolyStory of Watt – without patent
    When the patents expired many establishments for making steam-engines of Watt's principle were then commenced.
    However, Watt’s competitors principally aimed at cheapness rather than excellence.
    47
  • 48. Intellectual MonopolyStory of Watt – without patent
    As a result, far from being driven out of business, Boulton and Watt for many years afterwards kept up their price and had increased orders.
    48
  • 49. Intellectual MonopolyStory of Watt – without patent
    After getting one step ahead, Watt remained ahead not by superior innovation, but by superior exploitation of the legal system.
    The fact that his business partner Boulton was a wealthy man with strong connections in parliament, was not a minor help.
    49
  • 50. Why Hornblower Is Superior?
    It was a substantial improvement over Watt’s
    It introduced the new concept of the “compound engine” with more than one cylinder.
    This was the basis for further steam engine development after Watt’s patents expired.
    50
  • 51. Why Hornblower Is Superior?
    Hornblower built on the earlier work of Watt, making use of his “separate condenser.”
    The monopoly over the “separate condenser,” blocked the development of “compound engine,”
    Retarding economic growth.
    51
  • 52. Intellectual MonopolyStory of Watt
    During Watt’s patents, the UK added about 750 horsepower of steam engines per year
    In the thirty years following Watt’s patents, additional horsepower was added at a
    rate of more than 4,000 per year.
    52
  • 53. Intellectual MonopolyStory of Watt
    The fuel efficiency of steam engines changed little during the period of Watt’s patent;
    while between 1810 and 1835 it is estimated to have increased by a
    factor of five.
    53
  • 54. Jerome Lemelson
    1923 – 1997
    Over 600 patents – used as submarine patents
    Worth US$1.3B
    So, how did he do?
    54
  • 55. Jerome Lemelson’s Strategies
    Knew the critical technologies for market demand
    Cordless telephone, fax machine, camcorders, etc.
    55
  • 56. Jerome Lemelson’s Strategies
    Continuation applications
    a patent application filed by an applicant who wants to pursue additional claims to an invention disclosed in an earlier application of the applicant (the "parent" application) that has not yet been issued or abandoned.
    This type of application is useful when a patent examiner has allowed some but rejected other claims in an application, or
    where an applicant may not have exhausted all useful ways of claiming different embodiments of the invention.
    56
  • 57. Results of Jerome Lemelson’s Strategies
    Lemelson’s patents occupied the top thirteen positions for the longest prosecutions from 1914 to 2001.
    Served as “Submarines”
    In 2004, his estate was defeated in Symbol and Cognex case – plaintiff sought (and received) a ruling that 76 claims under Lemelson's machine vision patents were unenforceable.
    57
  • 58. 58
  • 59. Is Parody an Enemy?
    59
  • 60. Experiment of Fictionwise.com
    We might expect that the sale of unencrypted electronic books results in relatively few sales since they will immediately appear for free on peer-to-peer networks,
    Strikingly, the data shows exactly the opposite.
    60
  • 61. Experiment of Fictionwise.com
    Owned by Barnes & Noble
    eBooks in in encrypted or non-encrypted formats.
    The encrypted books tend to be by the best known authors and highly rated.
    Both types of books sell for a similar price – about $5 for a novel.
    61
  • 62. Experiment of Fictionwise.com
    Fictionwide.com lists the top 25 recent best-sellers and the top 25 best-sellers for the last 6 months.
    On the randomly chosen date of September 1, 2002 no encrypted ebooks appeared on either list.
    Almost five years later, the situation has changed somewhat in favor of encrypted books, but not dramatically so.
    62
  • 63. 63
  • 64. Copycat or Innovation?
    64
  • 65. Schumpeter’s Innovation
    The Theory of Economic Development, 1934, Harvard University Press, Boston
    The introduction of a new good or of a new quality of a good.
    The introduction of a new method of production.
    65
  • 66. Schumpeter’s Innovation
    The opening of a new market, whether or not this market has existed before.
    The conquest of a new source of supply of raw materials or half-manufactured goods.
    The carrying out of the new organization.
    66
  • 67. The introduction of a new good or of a new quality of a good.
    Quad Band (GSM & CDMA)
    Dual SIM
    Media Tek’s turn-key solution
    Receiving TV signals
    Longer idle time
    Anti-theft tracking
    67
  • 68. The introduction of a new method of production.
    New supply chain – cluster
    Media Tek with independent design houses
    Swift reactions to market changes
    68
  • 69. The opening of a new market, whether or not this market has existed before.
    The bottom of the pyramid
    Disruptive innovation – avoid overshooting
    Highly customized
    69
  • 70. The conquest of a new source of supply of raw materials or half-manufactured goods.
    Media-Tek’s processors
    Abundant suppliers
    Control distribution channels
    70
  • 71. The carrying out of the new organization.
    Media-Tek’s open source business model
    Cluster – Taiwan’s scientific park model
    Close to customers (fewer middlemen from 5 – 8 to at most 3 levels for cellular phones)
    71
  • 72. Disruptive Innovation!
    72
  • 73. Compromise
    73
  • 74. Compromise between Submarines and R&D Houses
    iPod
    P&G’s Connect + Develop
    Media Tek & Motorola
    Media Tek joined TD-SCDMA
    74

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