Ge Traditional Innnovation vs Reverse
Business and Management
Submitted By myardimci75
1/ What are the similarities and the differences between GE’s traditional innovation and reverse innovation?
GE’s, as most of MNE’s, used to innovate in rich countries and after sold those in emerging country; this the traditional way of innovation. However, they began a new strategy called reverse innovation. It is just the opposite. It is about innovating in the emerging country and then bringing those to the rest of the world, richer. The base is still the same as a traditional innovation, they create something new to be the first and win the market, which may doesn’t exist yet. But the reverse innovations are first adapted to the needs of the emerging country like China and India. The greatest difference is to be low price. When the product is well launched they bring it to the rich country and create a new market with low-cost innovative goods, which doesn’t exist in the western country. Thanks to the rapid development of populous countries like China and India and the slowing growth of wealthy nations, reverse innovation has become a strategic priority.
2/ Why is GE’s interested in reverse innovation?
Because of their financial situation and their brutal recession, GE’s needed to find a new strategy to develop their products. Indeed the market of the rich country is saturated by competitors so it is more and more complicated to enter the market. At contrary the possibilities in the emerging country doesn’t stop to growth. That is why GE’s decided to invest in the reverse innovation. The portable ultrasound became an hit in China and thanks to that they were also be able to sell in Western country, similar product but much cheaper. GE’s had to adopt this strategy to survive.
a. What are the main concerns that prevent western MNEs from aggressively investing in emerging economies?
A massive and aggressive investment in emerging economies seems not to...