Reverse innovation is an innovation which is first adopted in the developed countries. To be specify, what actually makes an innovation a reverse innovation essentially have nothing related with the innovators and also companies. It only has to do with where the customers are “The term was coined by Dartmouth professors Vijay Govindarajan and Chris Trimble and GE’s Jeffrey R. Immelt.
According to these three authors, reverse innovation consists of developing ideas in the emerging markets, then start to introduce it in the developed countries market. Just to say that, its “towing in against current” (Ostraszewska ; Tylec, 2015). The most important features of the reverse innovation which is basically not only focusing on the price of the products but as will its quality.
3.0 Benefits of reverse innovations
Predominantly, reverse Innovation could lead to the further boom in the industrialization. As more MNC’s started to adopt and produce or invent new products in their local country or in the western markets, customers are getting better products with variety of options for them to choose in an affordable price. I have analysed and explained below on how these three enterprises has invented a product by using the reverse innovation strategy which has benefited the consumers in many ways.
3.1 Tata Nano
The company which has truly signifies the ideology of reverse innovation in the market are Tata Motors. In 2009, the company has manufacture a car which is known as “Tata Nano” the world’s cheapest cars which only costs approximately US$2,500. This low cost car were a result in which new designs were created, frugal engineering as well advanced supply chain enterprises. Tata Motors have planned in introducing the “Tata Nano” which is not only in the other emerging markets such as the Africa but also now planning in bringing the car into the Europe as well in the USA.
Basically, for a person to own a car, it’s like a dream for them. This is because of their disposable income might not be sufficient enough in applying for a bank loan. But now they could purchase the “Tata Nano” car at the price of US$2,500 only. This looks upon as capability of fulfilling each individual dreams of owning their own personal car with an affordable price. The power of the technological innovations of “Tata Nano” has met the aspirations of each people at the “bottom of the pyramid” (Prahalad, 2004) have been appreciated well, by both of the acknowledged management in experts and also renowned scientists (Mashelkar, 2009). By doing it, Tata has already unlocked an enormous untapped market.
3.2 GE Healthcare
“India produces 30million newborns baby annually but then most of the births actually happens in a manner which is unsupervised, lack of affordable equipment and also the hospitals always deal with an erratic electricity situation” says GE Healthcare’s Manoj Menon (Kellner, 2012). In results, India is one of the highest mother and also infant mortality rates. Therefore, GE Healthcare has attacked the problem and created the Lullaby baby-warmer, which has help to save many lives in a country that have a rate which is high pre-term of baby deaths globally.
The device which GE has developed in Bangalore in 2009, costs only $3000 in India. It termed as a low cost invention and have save almost 22,000 premature and low birth-weight infant lives. The products are not being sold but is being donated in order to impoverish the community’s needs (Kannan, 2013). The breakthrough point for GE, when they realized that the preferences of the consumers are very different from the developed countries consumers. As in the domestic market it was very successful, now GE has started to sell the warmer across more than 80 countries. Now every woman and their baby has a chance of having a healthy life style.
3.3 Grameen bank
Looking at the history, banks have been always focusing on the “rich” by addressing their needs and wants. In Bangladesh, the Grameen bank have reverse the conventional banking practices by eliminating the collateral system and have created a system in which it is based on accountability, mutual trust, creativity and also participation (Grameen Bank, 2018). The brainchild behind this innovation is Professor Muhammad Yunus, a noble prize winner in Bangladesh for pursuing this microfinance revolution. Grameen bank are now borrowing micro-loans in the range of $27 to $500 to the poor people, so that they could start up or expand their business in order to allow them to come out of poverty (Hays, 2013).
Moreover, Grameen Bank have received a global attention, as they are providing loans to the ultra-poor women’s in starting up a “micro-enterprises. The microcredit programs of the Grameen bank has created opportunities for the women’s in beneficiaries which has helped them in improving their standard of living (Ara & Seddiky, 2015). Now women’s can also start up their own business and become an entrepreneur by utilizing the opportunity that has been given. Internationally, most of the banks which are well-known and successful failed in considering the opportunity in lending smaller amount of money to the poor and for small business purposes. Grameen bank has use this opportunity and now has helped millions of people in Bangladesh in stepping out from the poverty situation to a better living.