Abstract: Shortage of talents and lack of resources and funds are two major problems in the development of local manufacturing enterprises. The development of local manufacturing enterprises relied on the follow-up and imitation of technology. However, in the context of rapidly changing technological environment and rich market demand, it is difficult for local manufacturing enterprises to catch up with strong incumbents and achieve technological innovation and market share. Finding breakthroughs is the key for local manufacturing enterprises to achieve innovation and development. Disruptive innovation originated from the non-mainstream low-end market and niche market. By changing the customer demand, applying differentiated products, technologies, services, business modes, etc., changing the competition rules of the existing mainstream market and developing new markets, local manufacturing enterprises can catch up and surpass the incumbent enterprises. Disruptive innovation can not only break through the monopoly position of technologically advanced enterprises in the high-end of industrial chain, but also be used to find potential market customers and build new business modes to bring innovation opportunities to local manufacturing enterprises. Under the unique market environment and emerging technology background, disruptive innovation is of great significance to the innovation and development of local manufacturing enterprises.The research characteristics of this paper are asfollows: First, expand and enrich the specific modes of local manufacturing enterprises to achieve disruptive innovation. The second is to construct a theoretical model for local manufacturing enterprises to achieve disruptive innovation. The third is to further refine the research of knowledge search and opportunity ability from the perspectives of peer search, cross-border search, opportunity perception and opportunity development.This paper follows the single case exploratory research method and the principle of theoretical sampling, chooses Xiaomi Company as the case study object. As a latecomer in the field of smart phones, Xiaomi has entered the niche market at a low price, using Internet technology for product development and sales, changing the traditional competition mode of the mobile phone industry and meeting the characteristics of disruptive innovation. In less than ten years since its establishment, Xiaomi has developed rapidly and successfully surpassed Lenovo and LG to become the fourth largest Internet company in China. Its innovation process is typical and representative, which can provide reference for similar companies and many local manufacturers. This article uses the first-hand information which the author interviewed in Xiaomi Company and related second-hand data, to analyze and summarize the development process of Xiaomi′s disruptive innovation.The research results show that Xiaomi′s disruptive innovation has experienced three stages: the market positioning disruption stage, the service design disruption stage, and the operation mode disruption stage. Knowledge search is an important driving factor for local manufacturing enterprises to implement disruptive innovation, and opportunity capability is the core ability of local manufacturing enterprises to achieve disruptive innovation through knowledge search. In the disruption stage of market positioning, Xiaomi Company searches for technology, development trends in the same industry and cross-industry innovation experience. On the basis of obtaining knowledge and information related to product technology, it redevelops advanced technology and forms low-cost high-performance products which have significant difference with the mainstream market, and therefore invades the low-end market. Then Xiaomi perceives the unmet consumers′ needs in the existing market through Internet thinking, strengthens user participation, improve product performance, develop personalized products, develop new markets and build competitive advantage. In the disruption of service design, Xiaomi Company understands customer needs and cross-industry service modes through knowledge search, and strengthens communication with users by stimulating employee innovation and establishing a complete online user communication system to enhance user experience. At the same time, an offline after-sales service system with short-term response and efficient processing was established to handle user feedback at any time, to sense the changes in user needs, and to change the demand as a new product or service development opportunity to preempt the market. In the disruption of the operation mode, Xiaomi Company fully understands the operating conditions of competitors in the same industry and advanced patent technologies in other industries, explores the development trend of the industry, and establishes a new retail expansion mode covering multi-domain products. At the same time, it sets up professional teams to explore and hatch potential start-ups, as well as strategic cooperation with related companies. By these, Xiaomi breaks through the boundaries of the enterprise, builds an innovation ecosystem that covers multiple links in the value chain, and drives the cooperative enterprises to develop together to achieve disruptive innovation and sustainable growth.The theoretical value of this paper is to explore the driving factors for local manufacturers to achieve disruptive innovation and further expands the theoretical results of disruptive innovation. It further clarifies that knowledge search is the foundation for local manufacturing enterprises to achieve disruptive innovation. Opportunity capabilities is the key to local manufacturing enterprises to achieve disruptive innovation. The practical value of this paper is to provide experience for local manufacturing enterprises to achieve disruptive innovation. In addition to providing simple and cost-effective products to meet the needs of niche markets, local manufacturing enterprises can also achieve a strong catch up from low-end to high-end disruption through continuous service improvement, operational mode innovation and ecosystem construction.

Key words: disruptive innovation, knowledge search, opportunity capabilities, case study