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1-Page Summary of Reverse Innovation
The most populous countries in the world are still considered to be developing countries. In a few years, they will catch up with the largest economies and become some of the biggest economies on earth. Western companies that want to maintain their market dominance need to establish themselves on those markets early. However, establishing themselves is difficult because prices there are very low due to lower incomes. Reverse Innovation is an alternative way out of this dilemma for these companies like Gillette who developed a new razor specifically for India by taking into account conditions and customs from India such as little access to running water or men spending more time shaving than women do at home in America. The result was that 75% of Indian men now use Gillette razors over other brands worldwide.
Reverse innovation means to create new products for emerging markets. The mistake is to make western products cheaper by offering fewer features and using less expensive materials. However, the result is usually still too expensive for those people in developing countries. A better approach is to develop a product from scratch that takes into account the very different needs of customers in emerging markets. John Deere, manufacturer of tractors, created a tractor especially designed for India—but it had way too wide turning radius due to its designers not considering how narrow Indian farmers’ fields are and how small their plots are as well. They didn’t do enough research on what kind of product would work best in that market so they ended up with something that wasn’t suitable at all for the local population’s needs. Developers should forget conventional solutions and instead immerse themselves deeply in discovering what these populations need through intense dialogue with them. Sometimes constraints can even be used advantageously when creating global hits: For example, engineers developed an extremely rugged wheelchair specifically intended for poor villages where roads are often bumpy or muddy; this wheelchair was supposed to cost no more than 250 dollars but have many useful features like being easy to repair and versatile yet safe. This was quite a challenge but it succeeded beyond expectations : It turns out you can use some of these same principles when designing high-end wheelchairs which sell much more cheaply because labor costs aren’t as high overseas, plus you don’t have to deal with unionized employees (who will demand higher wages) – thus making your company incredibly profitable.
