Reverse innovation

With the current rate of globalization, the world has turned out to be more competitive as the days goes by. As a result of this high competition, companies have shifted their focus from searching for deeper and significant changes into shallow and apparent ones. Reverse innovation is thus referred to as innovation that initially originates in the developing nations and subsequently flows uphill to the developed nations. This form of innovation is thus doing the opposite of the other innovations as multinationals are focusing on coming up with booming innovations in the emerging markets.  These innovation and knowledge is later exported to the developed world. This is a significant new development that has its most important implication for businesses and federal governments across all nations.

According to Govindarajan, (2012), the author indicates that this innovation has its own share of challenges. Companies that are involved in developing new ideas in an emerging market are required to rise above their prevailing logic and the institutionalized judgment that directs their actions. Typically, this form of innovation is regarded to be disruptive. This is because it involves the implementation of major changes. These changes are disruptive as they involve throwing out of traditional structures which are replaced with new ones. The companies involved are thus forced to start from scratch. They have to change the refurbishing product development and manufacturing approaches. They are also required to reorient their sale force. It is therefore important for multinational companies to understand how successful their innovation will be and how they will take place in the rising markets. This is because the introduction of new products may have the potential to be disruptive.

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Understanding radical change is essential for successful reverse innovation. Despite the fact that making these changes is time-consuming and costly it is important to incorporate them into the business. At the onset of innovation, it is crucial for the company to reconsider their location and their staffing. Global resources are the agents’ of change in multinational companies. The success of the innovation heavily lies in the ability of the human resource to run the project. Therefore, having a team of employees who are familiar with the emerging markets will be of great benefit to the company. Team building must be enhanced hence allowing collaboration amongst all employees. They must make use of all of the multinational’s assets and continually collaborate with the legacy unit. Having competent personnel who are aggressive in their thinking makes the innovation process efficient. As the team set audacious targets, they are able to remain focused on creating products that functions the same as the already existing systems but at favorably lower costs.

Companies should overcome resistance by making multiple attempts. While marketing products it is important to be persistent even when customers show reluctance. It is through this that the company is able to make known their innovated products to the local market before marketing to the developed nations. Forging a close customer relationship helps the company’s sales force to achieve success in delivering high-quality services. Multinationals have to rebrand their company future. This helps to change the mindset and the company’s culture. As all stakeholders involved in establishing new products change their mindset, bold actions are undertaken in achieving a bright future for the company.

 

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In a local market, scalability is driven by the careful integration of the innovative components and processes within the system that is well adapted to the challenges facing these markets. Bringing localized knowledge and new products to scale at global level demands largely relies on efficiency. Efficiency results in high sales and thus resulting in higher profits for the company. As a result, the profits outweigh the cost of production hence encouraging the efforts to scale up the local market. The cost of innovation can be used in multiple areas as it helps to determine the reach. For new products to reach a wide range of people, the cost of adoption for the consumer should be low. It is therefore important for the company to identify their efficiency core. This is the driving force that directs the company to effectively work in other settings. However, the company has to identify some of the adaptable aspects that they can effectively adapt. Doing this increases the company’s chances of scaling up from the local to global markets.

Companies may scale up using different forms of models. According to the contagious model, solutions, organization and supply systems often expands outwards from the original point of innovation. This scaling up method is driven by the increasing demand for new products.  However, scaling up through the distant replication model involves targeting of new markets in a given geographic area with a product that has already been replicated and adapted. Transfer and translation mode, on the other hand, has enhanced scaling up through the transfer and translation of knowledge to others. This is mostly used by non-profit organizations who share approaches to success with others.

 

References

Govindarajan, V. (2012). A reverse-innovation playbook. Strategic Direction, 28(9).