Reverse Innovation in Emerging Markets
Posted by Paul on December 30, 2009 under News | 
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From Harvard Business Review: How GE is disrupting itself, a 50% solution at a 15% price.
Slower expanding rich markets don’t provide enough growth for large corporations such as GE. High end products on the other side are not competitive in emerging markets. The threat of new giants from these regions forces companies such as GE to innovate inside these markets, at much lower cost point. This reverse innovation is the opposite of the globalization approach that many manufacturers tried without much success.
As example is mentioned a PC based portable Ultrasound device, now selling at US$15,000. Originally these bulky devices were priced at $100k and then dropped to $30-$40k for portable versions.
The Chinese development team decoupled computer and software from the Ultrasound device, using a laptop and advanced software, replacing a large (expensive) box with custom hardware. This device has become a hit especially in rural areas, with not as high a performance as the origal 100% custom built model but “good enough” for use in remote areas. The 50% solution at a 15% price.
