Engineering Reverse Innovations
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Emerging markets
by
Amos Winter
and
Vijay Govindarajan
by
Amos Winter
and
Vijay Govindarajan
From the Magazine (July–August 2015)
· Long read
Photo by Bruce Peterson
Summary.
Multinationals are starting to catch on to the logic of reverse innovation, in which products are designed first for consumers in low-income countries and then adapted into disruptive offerings for developed economies. But only a handful of companies have managed to do it successfully until now. In this article an MIT engineering professor and a Tuck professor of management explain why. After conducting a three-year study of reverse innovation projects, they’ve concluded that the main hurdle facing product developers is a mindset. Western designers, who usually create products by following time-tested methods, struggle to overcome the constraints and leverage the freedoms of emerging markets. They tend to fall into common mental traps that prevent the development of reverse innovations: matching segments to existing products, lowering price by removing features, failing to think through all the technical requirements, neglecting stakeholders, and refusing to believe products created for low-income markets could have global appeal. But companies can avoid these traps, the authors found, by adhering to five design principles. The success of several new products illustrates how. One is the Leveraged Freedom Chair, a low-cost wheelchair that can navigate rugged terrain in places with poor infrastructure; a modified version is taking Western markets by storm. HBR Reprint R1507F
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Idea in Brief
The Problem
Multinational companies are starting to realize that developing new products in and for emerging markets will allow them to outperform local rivals and undercut them on price—and even disrupt Western markets. However, most struggle to create those products and then sell them in the developed world.
The Analysis
A three-year study suggests that Western companies often fail to grasp the economic, social, and technical contexts of emerging markets. Most Western product engineers find it tough to overcome these markets’ constraints and leverage their flexibility. They tend to fall into one or more traps that thwart their innovation efforts.
The Takeaways
Companies can avoid these traps if they: 1: Define the problem independent of solutions. 2: Create the optimal solution using the design flexibility available. 3: Understand the technical landscape behind the problem. 4: Test products with as many stakeholders as possible. 5: Use constraints to create global winners.
Slowly but steadily, it’s dawning on Western multinationals that it may be a good idea to design products and services in developing economies and, after adding some global tweaks, export them to developed countries. This process, called “reverse innovation” because it’s the opposite of the traditional approach of creating products for advanced economies first, allows companies to enjoy the best of both worlds. It was first described six years ago in an HBR article cowritten by one of the authors of this article, Vijay Govindarajan. (See “How GE Is Disrupting Itself,” October 2009.)
July–August 2015
Read more on Emerging markets or related topics Product development and Innovation
Amos Winter is the Robert N. Noyce Career Development Assistant Professor and the director of the Global Engineering and Research Laboratory in the department of mechanical engineering at the Massachusetts Institute of Technology.
Vijay Govindarajan is the Coxe Distinguished Professor at Dartmouth College’s Tuck School of Business, an executive fellow at Harvard Business School, and faculty partner at the Silicon Valley incubator Mach 49. He is a New York Times and Wall Street Journal bestselling author. His latest book is The Three Box Solution . His Harvard Business Review articles “ Engineering Reverse Innovations ” and “ Stop the Innovation Wars ” won McKinsey Awards for best article published in HBR. His HBR articles “ How GE Is Disrupting Itself ” and “ The CEO’s Role in Business Model Reinvention ” are HBR all-time top-50 bestsellers. Follow him on LinkedIn . vgovindarajan
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Read more on Emerging markets or related topics Product development and Innovation
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Navigation Menu. Subscribe. Sign In. Account Menu Account Menu Hi,  Guest. Search Menu. Close menu. CLEAR. SUGGESTED TOPICS. Explore HBR. Latest. The Magazine. Ascend. Podcasts. Video. Store. Webinars. Newsletters. Popular Topics. Managing Yourself. Leadership. Strategy. Managing Teams. Gender. Innovation. Work-life Balance. All Topics. For Subscribers. The Big Idea. Data & Visuals. Reading Lists. Case Selections. HBR Learning. Subscribe. My Account. My Library. Topic Feeds. Orders. Account Settings. Email Preferences. Log Out. Sign In. Subscribe. Latest. Podcasts. Video. The Magazine. Ascend. Store. Webinars. Newsletters. All Topics. The Big Idea. Data & Visuals. Reading Lists. Case Selections. HBR Learning. My Library. Account Settings. Log Out. Sign In. Your Cart. Visit Our Store. My Library. Topic Feeds. Orders. Account Settings. Email Preferences. Log Out. Reading Lists. 1 free. s. last free article. Subscribe. Create an account. Emerging markets. by. Amos Winter. and. Vijay Govindarajan. by. Amos Winter. and. Vijay Govindarajan. From the Magazine (July–August 2015) · Long read. Photo by Bruce Peterson. Summary. Multinationals are starting to catch on to the logic of reverse innovation, in which products are designed first for consumers in low-income countries and then adapted into disruptive offerings for developed economies. But only a handful of companies have managed to do it successfully until now. In this article an MIT engineering professor and a Tuck professor of management explain why. After conducting a three-year study of reverse innovation projects, they’ve concluded that the main hurdle facing product developers is a mindset. Western designers, who usually create products by following time-tested methods, struggle to overcome the constraints and leverage the freedoms of emerging markets. They tend to fall into common mental traps that prevent the development of reverse innovations: matching segments to existing products, lowering price by removing features, failing to think through all the technical requirements, neglecting stakeholders, and refusing to believe products created for low-income markets could have global appeal. But companies can avoid these traps, the authors found, by adhering to five design principles. The success of several new products illustrates how. One is the Leveraged Freedom Chair, a low-cost wheelchair that can navigate rugged terrain in places with poor infrastructure; a modified version is taking Western markets by storm. HBR Reprint R1507F. Tweet. Post. Share. Annotate. Save. Get PDF. Buy Copies. Print. Idea in Brief. The Problem. Multinational companies are starting to realize that developing new products in and for emerging markets will allow them to outperform local rivals and undercut them on price—and even disrupt Western markets. However, most struggle to create those products and then sell them in the developed world. The Analysis. A three-year study suggests that Western companies often fail to grasp the economic, social, and technical contexts of emerging markets. Most Western product engineers find it tough to overcome these markets’ constraints and leverage their flexibility. They tend to fall into one or more traps that thwart their innovation efforts. The Takeaways. Companies can avoid these traps if they: 1: Define the problem independent of solutions. 2: Create the optimal solution using the design flexibility available. 3: Understand the technical landscape behind the problem. 4: Test products with as many stakeholders as possible. 5: Use constraints to create global winners. Slowly but steadily, it’s dawning on Western multinationals that it may be a good idea to design products and services in developing economies and, after adding some global tweaks, export them to developed countries. This process, called “reverse innovation” because it’s the opposite of the traditional approach of creating products for advanced economies first, allows companies to enjoy the best of both worlds. It was first described six years ago in an HBR article cowritten by one of the authors of this article, Vijay Govindarajan. (See “How GE Is Disrupting Itself,” October 2009.) July–August 2015. Read more on Emerging markets or related topics Product development and Innovation. Amos Winter is the Robert N. Noyce Career Development Assistant Professor and the director of the Global Engineering and Research Laboratory in the department of mechanical engineering at the Massachusetts Institute of Technology. Vijay Govindarajan is the Coxe Distinguished Professor at Dartmouth College’s Tuck School of Business, an executive fellow at Harvard Business School, and faculty partner at the Silicon Valley incubator Mach 49. He is a New York Times and Wall Street Journal bestselling author. His latest book is The Three Box Solution . His Harvard Business Review articles “ Engineering Reverse Innovations ” and “ Stop the Innovation Wars ” won McKinsey Awards for best article published in HBR. His HBR articles “ How GE Is Disrupting Itself ” and “ The CEO’s Role in Business Model Reinvention ” are HBR all-time top-50 bestsellers. Follow him on LinkedIn . vgovindarajan. Tweet. Post. Share. Annotate. Save. Get PDF. Buy Copies. Print. Read more on Emerging markets or related topics Product development and Innovation. Partner Center. Latest. Magazine. Ascend. Topics. Podcasts. Video. Store. The Big Idea. Data & Visuals. Case Selections. HBR Learning. Subscribe. Explore HBR. The Latest. All Topics. Magazine Archive. The Big Idea. Reading Lists. Case Selections. Video. Podcasts. Webinars. Data & Visuals. My Library. Newsletters. HBR Press. HBR Ascend. HBR Store. Article Reprints. Books. Cases. Collections. Magazine Issues. HBR Guide Series. HBR 20-Minute Managers. 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