The Reverse Innovation


Reverse innovation is a word denoting to an innovation that is most likely to be used initially in the developing nations before moving to the developed nations.

It denotes largely to the method in which products created as low-cost models to meet the requirements of the developing countries with restricted infrastructure are then repackaged as economical pioneering products for consumers in the developed nations.

The process of reverse innovation starts by emphasizing on requirements for low-priced goods in nations such as India and China.

After the products are created for the market, they are sold in other regions, including the West, at low prices. This process establishes new markets for the innovations.

Normally, firms initiate the globalization attempts by eliminating costly aspects from the well-known product and try to sell the de-featured products in the developing nations. The target audience consists of the wealthy segments of society in the developing nations.

Conversely, reverse innovation results in products which are developed in developing nations, verified in local markets and the successful products are enhanced for delivery in the developed nations.

According to Global Busi­ness Strate­gist, Vijay Govin­darajan, “Reverse inno­va­tion will trans­form just about every industry, including energy, health­care, trans­porta­tion, housing, and con­sumer prod­ucts.”

Reverse innovation is just not about decreasing the cost for the benefit of consumers, but it is about improving the efficiency paradigm and delivering greater value for less.

Currently, developing nations such as India with their growing expendable incomes are a prospective target market for several international firms. However, the consumers in the developing nations find products manufactured by the developed nations expensive.

The markets in developing nations need the products to be manufactured based on specific needs in terms of product efficiency and price. Hence, multinational firms must create products that meet local requirements and are affordable.

The multinationals in order to perform well in the markets are implementing the reverse innovation methodology. It provides them new opportunities in emerging economies and they benefit from economies of scale and better profit margins.

Reverse innovation would restructure the industry principles, market essentials and international development for the multinationals who continuously need to keep prospecting unique ways to become robust in the tough market environments.

To know about AcademyFT Trading programmes, please have a look at the Academy of Financial Trading reviews.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s