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Reverse Innovation emit


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reverse innovation

reverse innovation

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  • 1. Reverse innovationA General Overview Max Biocca Marco Solfato
  • 2. Objective of the presentation Explain the overall framework of Reverse Innovation. Provide a description of industrial dynamics. Compare Multinational vs Local firms The role of R&D Conclusion.
  • 4. What is Reverse Innovation1. Design a new product/service for emerging countries market facing a new price-performance paradigm2. Export the product in the developed world
  • 5. New Price-PerformanceParadigm1. Income gap between rich countries and developing ones. (key driver)2. Different & new demand: youthful, open minded and adventurous.3. Infrastructure gap.4. Sustainability gap.
  • 6. Two key aspects of a new approach to innovation1. Emerging markets will evolve in a different manner to developed countries2. Solutions that address the specific requirements of developing countries can be adapted for the developed world.
  • 7. Important of Reverse Innovationfor MNEs Presence in future markets -avoids emergence of new competitors. -understand the market and visibility (collaboration) Implementation of a new corporation mentality (fast time to market) -acquisition of human capital -new innovation strategy Governments provide funds
  • 8. How to implement ReverseInnovation? Decision-making  localized in emerging market. The local organization  connected to global technology. Experiment-and learn approach. Outsource and collaboration.
  • 9. Institutional Innovation Is a new approach to re-think company’s structure. redefining the NETWORK that bring together independent entities. flexible reconfiguration capability & long-term relationships sophisticated approaches to capability leverage in scalable business.
  • 10. R&D MNEs are developing an open innovation model outsourcing R&D in emerging economies. Growing important of patents and joint venture because of increasing competition.(appropriability)
  • 11. Decentralization & focus on local-market people and resources based and managed in the local market. Local Growth Teams (LGTs) must have the decision-making authority LGT must have access to company resources Successful local product must be taken global with pioneering approach
  • 12. Problems for MNEs lower-priced products could weaken the brand and cannibalize existing sales. lower-priced products drag down overall margins R&D effort can be diverted to more profitable projects. shorter-term payoffs distract from a sustainable strategy.
  • 13. Industry Analysis Explain the theory behind Reverse Innovation through data. Sample NOT- reliable Analysis of 4 aspect through dummy- variable: - company - product & market - strategy - the entrepreneur
  • 14. The companywas the technology previously owned by the company yes(1) no (0) in a city(1) or in a rural area (0) 2 new company (1) or old company(0) 1 dimension of company smal(0) medium(1) or big(2) multinational(1) or national (0) company 0is the activity related to previous activity yes(1) no (0) 0 2 4 6 8
  • 15. Product & MarketReinvented product in :technolog y many consumers?yes(1) no (0) price satisfied existing demand?yes(1) no (0)dimension yes yes created new market? yes(1) no (0) no use no 0 2 4 6 8 0 2 4 6 8
  • 16. Strategy Competitive advantage : R&D serves foreing markets with same technology yes(1) no (0) yes price yes noknowledge of consumer needs no integration implementation process exploration(0) or exploitation (1) economy of scale 0 2 4 6 8 0 5 10
  • 17. The Entrepreneurnational enterpreneur? yes(1) no (0) yes no a user? 0 1 2 3 4 5 6 7 8
  • 18. Local innovators Deeper understanding of local consumers. Local resources (low). Local capabilities. Higher passion for addressing local problems Higher flexibility Local networks
  • 19. Conclusion Reverse innovation is an opportunity of sustain growth for countries and companies. Requires flexibility and the ability to meet the consumer needs. Glocalization and Reverse innovation need to cooperate and the companies need to be on both sides of this strategy. It is crucial initiative to create innovation for the developed world.
  • 20. Thank you for your attention Q&A ?