Reverse Innovation

TRAITS

Examples: ZPMC (CI), Logitech (GI) and GE (FI)

Chinese firm ZPMC has, since its pursuit of cost innovation in the harbour crane industry, obtained the biggest global market share of harbour cranes, which includes developed and emerging markets.

 

In similar fashion, Logitech's M215 wireless mouse (good-enough innovation) is achieving great success in the Western world as well as in developing countries.

 

In the case of GE's VSCAN ultrasound device (frugal innovation), it found its way to the rich world in two ways. First it caught the interest of so-called marginalised markets - paramedics, emergency rooms, medical clinics, and operating rooms - outfits that previously could not afford even the entry-level traditional ultrasound machines. At around USD15k the handheld device now was within reach of these users and sales blossomed. Mainstream markets, such as hospitals, followed suit as they achieved operational efficiencies through a lesser reliance on expensive equipment for cases where the lesser product could achieve the required effectiveness, as well as through faster scheduling of patients.

DEFINITION

Reverse Innovation represents more market innovation than product innovation.

 

It happens when innovations from both the resource-constrained or necessity types trickle their way up-stream into mainstream and/or marginalised Western markets by capturing the attention of cost-minded customers or end-users. 

Source: Adapted from  Zeschky et al., 2014

© 2019 RMIT