Abstract
International strategy theories are usually out of analysis of MNCs of Western developed countries. How companies from developing countries like China enter western markets and build up competitive advantages there is a critical issue, which is not widely discussed in the literature. In this paper, we investigate Dapeng Heavy Industry's international development path and argue that Chinese companies are using different ways to penetrate into developed markets. Dapeng Heavy Industry managed to use knowledge search mechanism to enlarge relevant knowledge inflow and availed of the inflowed knowledge to transform its absorptive capacity to adapt to the new environment. This completments the absorptive capacity model by considering the knowledge search capability as one of the key components of absorptive capacity.