Contextual Innovation and R&D Strategy: An Analysis of the Competitive Advantage of Social Media Companies in China

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The Ohio State University

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Social media has largely changed the way that we communicate since its invention. The strategy adopted by the social media companies also has transformed the business practice and knowledge management. This research is an interdisciplinary study that based on the fields of economics, sociology, biology and business. It investigates how social media companies’ strategy on R&D (research and development) affects the financial performance of the companies in the same industry. It defines the competitive advantage of a company as the superior financial performance in the industry. Two groups of companies are being studied: the U.S. companies that adopt the technology-focus R&D strategy and the Chinese companies that adopt the market-focus R&D strategy. This research consists of two major parts: a qualitative research that consists of a case study of five Chinese social media companies and a quantitative research that use linear regression to examine the correlation between the R&D investment and the financial performance of the company. The findings are the companies that adopt market-focus R&D strategy tend to gain a higher return on R&D investment and a lower expense on non-production cost.


Arts and Sciences Undergraduate Research Scholarship
Social and Behavioral Sciences Undergraduate Research Grant
Undergraduate Education Summer Research Fellowship


Business Model Innovation, Research and Development, Social Media, China, Strategy