Abstract: The rapid development of Internet information technology provides a new situation for the technological catch-up of latcomer firms. Chinaese latercomer firms performance outstanding in technological catch-up. Some of them have being in the process of from catch-up to surpassing. Analysing Chinese largest Internet company Alibaba as a longitudinal case, this research explores the co-evolution mechanism of business model design and technology innovation and establishes a co-evolution framework of environment, business model design, technology innovation strategy and technology catch-up with composite perspective. It has three main conclusions: (1) The dynamic fit and the co-evolution of business model design and technology innovation strategy is the important mode of latcomer firms’ echnological catch-up. (2) The process of co-evolution has good interaction with the environment, which is better for technological catch-up; (3) The effect of technological catch-up effects the design of organization configuration and the choice of strategy. These conclusions will enrich the research of technological catch-up from the perspective of theory and practice.

Key words: business model design, technology innovation strategy, technological catch-up, latecomer firms, Alibaba