Building on a case study of five Chinese solar thermal companies and one association, our study aims to understand how the innovator’s choices regarding the use of technology and organizational practices for new product development enable companies to design and diffuse appropriate technology in emerging markets. The study uncovers two critical factors that enhance the appropriateness of technology: redefining the identity of technology and building a local supply system. Our analysis shows that synergic innovation in both architecture and component leads to the appropriate functionalities desired by emerging markets. Moreover, modular design and the building of a local supply system enhance the process appropriateness of technology. Our study provides an empirical basis for advocating going beyond minor adaptations of existing products to creating appropriate technology for emerging markets, and extends our understandings of the upstream process of designing appropriate technology. Moreover, the emphasis on the local supply system reflects a holistic framework for shaping and delivering appropriate technology, expanding the existing research focus on the perspective of the technology itself. Our research also has managerial implications that may help firms tap into emerging markets.
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