How should firms deal with counterfeiting?

Abstract

Purpose – The production and sale of counterfeit products is big business in the international economy. Nowhere is this more evident than in China. This paper aims to review the anti-counterfeiting strategies that have been identified in the literature on counterfeiting. Design/methodology/approach – The paper takes the form of a literature review. Findings – This paper reviews 11 anti-counterfeiting strategies that have been suggested by relevant literature and has identified some of the success conditions. It also finds that firms should seek to take a longer-term view and to protect their technology-based competitive advantage. This is already happening: Japanese blue chip companies have begun to relocate sensitive R&D and high-tech manufacturing away from risky locations and back to Japan. Research limitations/implications – The paper shows that the dominant legal enforcement (perspective) approach has been of limited success and explains the reasons for its failure. Practical implications – The paper concludes that anti-counterfeiting strategies should be seen as complementary rather than as mutually exclusive and that in the long run, as countries get more technologically advanced, governments will develop a strong self-interest in tackling the counterfeit problem themselves. Originality/value – The paper provides a systematic discussion of alternative anti-counterfeiting strategies that have been suggested by the literature and explores their success conditions in some detail.