This document provides an overview of reverse innovation. It discusses how multinational companies can design products for emerging markets and then export them to developed countries. Reverse innovation addresses the specific needs of developing countries at a lower price point. It allows companies to enter future markets and gain experience. Implementing reverse innovation requires decentralizing decision making and focusing on local markets. Challenges include lower prices cannibalizing existing sales and distracting from sustainable strategies. Overall, reverse innovation is an opportunity for growth if companies can flexibly meet local consumer needs through a strategy of glocalization and cooperation between local and global innovation efforts.

1. Reverse innovation
A 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.

3. HISTORY
 GLOBALIZATION
 GLOCALIZATION
 LOCAL INNOVATION
 REVERSE INNOVATION

4. What is Reverse Innovation
1. Design a new product/service for
emerging countries market facing a new
price-performance paradigm
2. Export the product in the developed
world

5. New Price-Performance
Paradigm
1. 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 innovation
1. Emerging markets will evolve in a
different manner to developed
countries
2. Solutions that address the specific
requirements of developing countries
can be adapted for the developed
world.

7. Important of Reverse Innovation
for 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 Reverse
Innovation?
 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 company
was 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
0
is the activity related to previous activity yes(1) no (0)
0 2 4 6 8

15. Product & Market
Reinvented 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
no
knowledge 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 Entrepreneur
national 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 ?