This project is an analysis of how Chinese counterfeiting and
cloning affects high tech products. It provides a thick description
of the concepts and context of Intellectual Property (IP)
infringement and cloning in China. The analysis is based on a
theoretical framework consisting of three classic organizational
economics theories Transaction cost economics, Agency theory, and
the Resource based view theory, as well as four strategies for
dealing with Chinese counterfeiters developed by the consulting
firm A.T. Kearney. The purpose is to analyze and predict what would
be the likely outcome if Apple Inc's iPhone product entered the
Chinese market. A four stage causal chain is developed to test the
result. It is concluded that Apple's iPhone product will enter the
Chinese market in 2009 and would be most likely to use an outpacing
strategy which is likely to be successful if contingent factors do
not occur. However the project also finds that numerous contingent
factors are likely to occur due to among other factors Apple's
supply chain. Cloning of the iPhone product by Chinese cloners is
therefore likely to present a serious threat to Apple inc. in the
Chinese market.
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