The Importance Of Verse Innovation

As the economies of developing countries continue to grow and strengthen, multinational companies are beginning to realize the potential in their quickly growing markets. However, the technique to reach these markets is not easily realized to those used to innovating for advanced, wealthy markets in the “developed” world. More difficult still is creating into a product that does well in both types of markets, a process called “reverse innovation”. Unlike reverse engineering, where you try to “un-make” a product and break it down into its components so you can improve it, reverse innovation is about designing products in a third or second-world context and translating them to succeed in first-world economies (Winter and Govindarajan 82).
There …show more content…
There are many ways to achieve this, including changing manufacturing methods. processes, and location (Zeschky, Winterhaler, and Gassmann 22). Some companies may lower cost by hiring employees from lower-paying countries. A Chinese crane manufacturer kept its prices lower than its German competitors because of China’s lower wages, which allowed it to succeed despite its small size. (Williamson and Zeng 2009, qtd by Zeschky, Winterhaler, and Gassmann 22). Some Indian soap manufacturers have appealed to the local markets by selling their products in smaller packs (Ghosh 2004, qtd by Zeschky, Winterhaler, and Gassmann 22). There are few downsides to this sort of innovation, and the product is immediately marketable in developed countries because it is identical to the original product. However, since manufacturers are already seeking to produce as cheaply as possible, finding additional ways to cut costs can prove extremely …show more content…
However, these markets are growing rapidly, and companies will need to begin focusing their efforts on providing lower-cost, market-specific solutions, or risk rapidly losing millions of consumers to competitors (Winter and Govindarajan 89). Therefore, understanding how to develop a strong base in developing markets is of the utmost importance. Cost, Good-enough, and frugal innovation are all viable innovation techniques to reach these markets, but the right approach must be selected for each market and issue, and this requires expansive knowledge of the market itself. Further research on these methods is necessary, but is safe to say that whatever the method, innovation is most successful when it is done with not only the target market in mind, but involved throughout the design