The Fails of Engineering Reverse Innovation

Instead of engineering innovations in developed countries and then marketing them in developing ones, multinational companies are doing otherwise.


Image credit: TEDx

So what are we doing wrong with reverse innovation? Everything! We need to re-engineer it.

When it comes to engineering new products and innovations, multinational companies tend to keep developed countries in mind. That is the traditional method and it has served them well. However, there are a few multinational corporations that believe that reverse innovation is the way to go. Interesting concept, right?

These companies are innovating and designing their products and services in different developing countries. They make a few global tweaks here and there and voila! The products are ready for the developed market. This is reverse innovation and it can help companies to get the best possible results. Why is it called reverse innovation? Simple. It is, after all, the very opposite or reverse of the traditional approach.

Engineering Reverse Innovation (Photo credit: TEDxTalks)

Now, reverse innovation is certainly a very sound and logical process. However, the number of multinational corporations who have actually made use of this method is quite low. Some of the more well-known among those companies include Nestlé, Microsoft, Levi Strauss, PepsiCo, Coca-Cola and Renault.

Vijay Govindarajan and Amos Winter conducted an extensive research into this phenomenon spanning more than 3 years and over 35 of these projects. As per research, they have found out that most companies are unable to bring their successful conclusion because they are incapable of understanding the unique markets in the developing countries. After all, these developing countries have their own technical, social and economic contexts.

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Engineering Reverse Innovation (Photo credit: TEDxTalks)

The fact is that the product developers at these companies tend to develop products for people who are like them. They have no understanding of these emerging markets where the very situation is unlikely anything they have experienced in their own countries. In other words, if these multinational guys want to capture an emerging market, they need to let go their preconceived notions and give their best at a lower cost.

Engineering Reverse Innovation (Video source: TEDxTalks)

Hina Sapra

Content Writer, South Asia.Hina is a former news correspondent at Times of India

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The Fails of Engineering Reverse Innovation

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