Global ambitions through reverse innovation

As Global companies want to capture the market in every corner of the world, while keeping the core-function of the business such as R&D, technology or Decision making in their home country.

Business models which gave the way to outsourcing of the routine functions or activities such as customer care were actually fading away as more and more organizations have got the taste of reverse innovation.

Reverse innovation is basically about innovating products and solutions primarily in emerging markets with an aim to serve both developing and developed nations. (//Source: Business Today, May 30 2010, Page 77). It is of significant importance because of following four reasons.

Business lies here: Now Big players are getting greater pie of their profit cake from countries such as China, India, Brazil, and South Africa. So focus on the need of the consumer is suppose to be addressed by these organizations and that is possible by being closer to the customer for critical functions such as design.

Cost of innovation: availability of skilled manpower which is equipped with latest technological assets has made the designing of the new products much cost-effective in emerging markets. Renault is designing its global compact car at its design centre in Mumbai, India.

Frugal mindset in developed nations: It is another reason that has given reverse innovation so much importance, as the consumers in developed nations are also becoming cost-conscious, so they are hitting the “VALUE QUOTIENT” of any product. It has made easier for the product designers in the developing countries to address the needs of this segment of customer in developed nations along with local markets. Blurring the line of quality expectations among the consumers has given they way to reverse innovation.

More and more organizations are on set to adopt a business model which has reverse innovation at its core to fulfill their global ambitions.