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The People's Republic of China (China) has become a workshop to the world, and manufacturing there is increasingly moving beyond labor intensive, low value-added products. As a result, China poses a severe competitive challenge to companies in many industries around the world. For such companies, the recent successes of the bicycle industry in the Republic of China (Taiwan) may provide at least some reason for hope.Broadly speaking, Taiwan's previous economic success has been built on the competitiveness of its small and medium sized enterprises, and competition among such companies has tended to be high. Such firms have shown a remarkable ability to recombine and form new networks in line with market changes. We call such networks ''modular, symbiotic supplier networks'' and, during the 1980s and early 1990s, they created competitive advantage for the island nation by virtue of their ability to support rapid product development.

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Replication can be a powerful strategy for firms, but the replication of organizational practices is not easy, and there exists a real tension between replication and adaptation. This paper looks at the sourcing strategies and supplier networks of three Taiwanese machine tool companies in mainland China to understand the conditions under which replication may be more or less likely to occur. In addition, by viewing the cases as examples of the production network internationalization and by considering the issue of convoy migration in such a context, this paper presents a new way of thinking about the internationalization of industrial networks. Copyright Springer Science + Business Media, Inc. 2005internationalization, production networks, replication, machine tools, China,