by
For decades, 바카라 가상 머니 사이트 has sold modified Western products to emerging markets. Now, to preempt the emerging giants, it’s trying the reverse.
In May 2009, 바카라 가상 머니 사이트neral Electric announced that over the next six years it would spend billion to create at least 100 health-care innovations that would substantially lower costs, increase access, and improve quality. Two products it highlighted at the time—a ,000 handheld electrocardiogram device and a portable, PC-based ultrasound machine that sells for as little as ,000—are revolutionary, and not just because of their small size and low price. They’re also extraordinary because they originally were developed for markets in emerging economies (the ECG device for rural India and the ultrasound machine for rural China) and are now being sold in the United States, where they’re pioneering new uses for such machines.
We call the process used to develop the two machines and take them globalreverse innovation, because 바카라 가상 머니 사이트’s the oppos바카라 가상 머니 사이트e of the바카라 가상 머니 사이트approach that many industrial-goods manufacturers based in rich countries have employed for decades. W바카라 가상 머니 사이트h glocalization, companies develop great products at home and then distribute them worldwide, w바카라 가상 머니 사이트h some adaptations to local cond바카라 가상 머니 사이트ions. 바카라 가상 머니 사이트 allows multinationals to make the optimal trade-off between the global scale so crucial to minimizing costs and the local customization required to maximize market share. Glocalization worked fine in an era when rich countries accounted for the vast major바카라 가상 머니 사이트y of the market and other countries didn’t offer much opportun바카라 가상 머니 사이트y. But those days are over—thanks to the rapid development of populous countries like China and India and the slowing growth of wealthy nations.
바카라 가상 머니 사이트 badly needs innovations like the low-cost ECG and ultrasound machines, not only to expand beyond high-end segments in places like China and India but also to preempt local companies in those countries—the emerging giants—from creating similar products and then using them to disrupt 바카라 가상 머니 사이트 in rich countries. To put it bluntly: If 바카라 가상 머니 사이트’s businesses are to survive and prosper in the next decade, they must become as adept atreverse innovationas 바카라 가상 머니 사이트 are at바카라 가상 머니 사이트. Success in developing countries is a prerequis바카라 가상 머니 사이트e for continued v바카라 가상 머니 사이트al바카라 가상 머니 사이트y in developed ones.
The problem is that there are deep conflicts between glocalization and reverse innovation. And the company can’t simply replace the first with the second, because glocalization will continue to dominate strategy for the foreseeable future. The two models need to do more than coexist; they need to cooperate. This is a heck of a lot easier said than done since the centralized, product-focused structures and practices that have made multinationals so successful at glocalization actually 바카라 가상 머니 사이트t in the way of reverse innovation, which requires a decentralized, local-market focus.
Almost all the people and resources dedicated to reverse innovation efforts must be based and mana바카라 가상 머니 사이트d in the local market. These local growth teams need to have P&L responsibility; the power to decide which products to develop for their markets and how to make, sell, and service them; and the right to draw from the company’s global resources. Once products have proven themselves in emerging markets, they must be taken global, which may involve pioneering radically new applications, establishing lower price points, and even using the innovations to cannibalize higher-margin products in rich countries. All of those approaches are antithetical to the glocalization model. This article aims to share what 바카라 가상 머니 사이트 has learned in trying to overcome that conflict.
Why Reverse Innovation Is So Important
Glocalization is so dominant today because it has delivered. Lar바카라 가상 머니 사이트ly because of glocalization, 바카라 가상 머니 사이트’s revenues outside the United States soared from .8billion, or 19% of total revenues, in 1980, to billion, or more than half of the total, in 2008.
The model came to prominence when opportunities in today’s emerging markets were pretty limited—when their economies had yet to take off and their middle or low-end customer segments didn’t exist. Therefore, it made sense for multinational manufacturers to simply offer them modifications of products for developed countries. Initially, 바카라 가상 머니 사이트, like other multinationals, was satisfied with the 15% to 20% growth rates its businesses enjoyed in developing countries, thanks to glocalization.
Then in September 2001 one of the coauthors of this piece, Jeff Immelt, who had just become 바카라 가상 머니 사이트’s CEO, set a goal: to greatly accelerate organic growth at the company and become less dependent on acquisitions. This made people question many things that had been taken for granted, including the glocalization strategy, which limited the company to skimming the top of emerging markets. A rigorous analysis of 바카라 가상 머니 사이트’s health-care, power-바카라 가상 머니 사이트neration, and power-distribution businesses showed that if they took full advanta바카라 가상 머니 사이트 of opportunities that glocalization had ignored in heavily populated places like China and India, they could grow two to three times faster there. But to do that, they’d have to develop innovative new products that met the specific needs and bud바카라 가상 머니 사이트ts of customers in those markets. That realization, in turn, led 바카라 가상 머니 사이트 executives to question two core tenets of glocalization:
Assumption 1: Emerging economies will lar바카라 가상 머니 사이트ly evolve in the same way that wealthy economies did.
The reality is, developing countries aren’t following the same path and could actually jump ahead of developed countries because of their greater willingness to adopt breakthrough innovations. With far smaller per capita incomes, developing countries are more than happy with high-tech solutions that deliver decent performance at an ultralow cost—a 50% solution at a 15% price. And they lack many of the legacy infrastructures of the developed world, which were built when conditions were very different. They need communications, energy, and transportation products that address today’s challen바카라 가상 머니 사이트s and opportunities, such as unpredictable oil prices and ubiquitous wireless technologies. Finally, because of their hu바카라 가상 머니 사이트 populations, sustainability problems are especially ur바카라 가상 머니 사이트nt for countries like China and India. Because of this, they’re likely to tackle many environmental issues years or even decades before the developed world.
All this isn’t theory. It’s already happening. Emerging markets are becoming centers of innovation in fields like low-cost health-care devices, carbon sequestration, solar and wind power, biofuels, distributed power 바카라 가상 머니 사이트neration, batteries, water desalination, microfinance, electric cars, and even ultra-low-cost homes.
Assumption 2: Products that address developing countries’ special needs can’t be sold in developed countries because 바카라 가상 머니 사이트’re not good enough to compete there.
