With the acceleration of economic globalization, an increasing number of strong enterprises are expanding their market share through their advanced technologies and almost perfect products. Faced with the competitive pressures coming from powerful opponents, many low-tech enterprises (disadvantaged ones) intend to take a series of countermeasures, for instance, lowering prices to resist the invasion. However, most of them ended in failure because of their inappropriate competitive strategies. The issue of how disadvantaged enterprises can survive in such an uncontrollable fierce competitive market has become an urgent problem to be solved. In previous literature, there is an agreement that disadvantaged and advantaged enterprises can coexist in duopoly market. For example, the Cournot model describes how two non-cooperative manufacturers set production quantities separately to maximize their own profits and achieve equilibrium. Then, pointed out that the Cournot model failed to give a proper explanation of how prices were determined in the oligopoly market. He proposed the so-called Bertrand model in which price was taken to be the decision variable. In the Bertrand equilibrium, the price of products was equivalent to marginal cost, namely no firms could obtain positive profit which is the “Bertrand paradox.” In order to deal with this problem, in 1897, Edgeworth introduced “capacity constraints” to the Bertrand model and proved that the equilibrium of the Bertrand model does not necessarily exist. However, all of the three models ignored the production differentiation, thereby coming to the conclusion that enterprises would choose to set the same price in equilibrium (if it exists). To bridge this gap, Hotelling (1929) established a linear location model to explain why the same products had different prices in reality. He added transportation cost into the spatial competition model and found that firms in duopoly would gather in the middle of the line segment in equilibrium, known as “principle of minimum differentiation.” D’aspremont et al. (1979) continued the setting of the Hotelling model and revised its hypothesis. He regarded the transportation cost as a quadratic function of distance and got a completely different result from Hotelling. That is, two firms in duopoly would locate at two ends of a line segment in equilibrium. “Principle of maximum differentiation” is exactly derived from his study. Both “principles” have their theoretical basis and it is not important to debate which one makes more sense (Netz and Taylor 2002; Gao 2010), but one thing that is for sure is that differentiation enables disadvantaged enterprises to find their niches in an oligopoly market.