...In 1980, Japan’s industrial innovation over took the United States in the global market for the auto making industry. Soon after, very similar modernization was happening in the emerging market. While China and India were previously used for cheap labor or call centers, now they were coming up with new business models for production and distribution. Multinational companies in the west were investing in this market, building their R&D in developing countries, and hoping that economical and educational growth in the emerging market would help them overcome challenges. Businesses also realized that distributing to the billions of middle class people in developing nations is as beneficial as investing in the western upper class population. There was marketing potential in this region of the world, since the population of intellectuals was growing fast and consumers were getting richer and richer every day. The emerging market improved the design of the products by being smart in innovating the production process. The majority of people in China and India were happy with the new economic situation, since they were now able to use their resources, such as raw materials, in the best way possible to improve the economic situation. However, risk and unpredictability is a huge factor when entering this market. Obstacles include, but are not limited to, pollution, government intervention, laws, regulations, piracy and poverty. Dani Rodrik argues that most nations that benefited from...
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...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...
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...Business Innovations From Emerging Market Countries Into Developed Countries Nowadays, emerging markets are growing very rapidly. They increase by 8% to 12 % compared to 2% to 3% for developed countries. Thus, Western multinational companies typically based in North America and Western entered these markets. More than 95% of Western multinational companies served emerging markets using standardized strategy. That means developing standardized products marketed worldwide with a standardized marketing mix, and making minimal changes to meet local mandatory product requirements and consumer taste differences where necessary. The main advantages of this strategy are cost saving and maximizing profits. So they charged a premium price for these products and services. Their main customers were affluent buyers who can afford to buy them. These people are classified as global or glocal. However, they have neglected serving the fast-growing but much larger less affluent markets in emerging market countries such as local and bottom of pyramid. As a result, these companies are experiencing intense competition from a new group which is called emerging giants. Emerging giants understand the market structure and the consumer psychology of these markets. These companies learned to offer quality products and services at affordable prices just to stay in business. Being close to the market provided them ample opportunity to better understand the consumer and offer products and services at affordable...
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...“Emerging Markets: From Copycats to Innovators Introduction Some of us are aware, especially those who are tech geek like I am, that, Tech companies are notorious for copying each other’s products and services, essentially “stealing” ideas. While some consumers get frustrated with companies releasing copycat products, the reality is that this game of one-upmanship results in better services for the consumer. Just to cite a few examples, according to P. Baumgartner (2008). “Don’t knock copy-cat innovation, it fuels the real stuff” at ventureburn.com, “Google wanted a more networking-friendly Facebook, so it created Google+. Apple’s team wanted its own navigation app, so it onced tried Google Maps. Facebook didn’t want to miss out on Snapchat-sized success, so it created Poke”. The bottomline is competition. While companies squable to get to to the top spot, they have to generate fresh, dynamic ideas to get the consumer’s attention. In competition, copying, repackaging, or rebranding, innovating or recreating is part of the game. The good news is that they all wind up, somehow to taking their costs down and subsequently their prices down as well. The winner is that company who have low cost input who could do mass production and move its inventory faster than the other. While companies battle head to head for the top spot, the ultimate winner is watching, waiting for that product of top quality and gives great value to the pocket – the customers like you and me. The...
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...and social environment factors impacting Samsung and Apple. Tough economic conditions are forcing them to take their fight to the emerging markets. Social factors are forcing them to operate locally while being global companies while legal factors are making them to fight over patent infringement etc. The organizational culture is impacting their performance so they are trying to make it positive by involving employees in the decision making and making them more autonomous. The leadership style is pretty aggressive and they are taking higher risk to gain higher returns. Technological advancements means the rivals are also customers and vendors of each other as well. I have selected Samsung as it is the company for which I want to work after graduation. Samsung is famous for its electronic products specially smartphones and smart TVs. My second selection as per requirement is Apple Inc. Samsung’s biggest rival. Economic Environment Economic environment is particularly important for both Samsung and Apple because both are working in numerous developing and developed economies and are expending upon their foot prints globally. Economic factors are particularly worrying for both the companies as the economic crisis has negatively impacted the purchasing power of the consumers in the developed market hence forced them to look to the emerging markets for profitable ventures. Their macro environment, filled with volatility and uncertainty has forced them to reorient their marketing...
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...July-December, 2013 Business Perspectives and Research Reverse Innovation: A Gift from Developing Economy to Developed Economy Ritu Sinha 1 Abstract In the era of globalization, emerging market economies are surfacing into centers of innovation. These innovations associate with low-cost products like healthcare devices, wind power, micro finance, electric cars and many more. The success of these frugal innovated products enable developed countries to adopt well. Hence, reverse innovation refers to those innovations which are adopted by developing countries first and then by developed countries. These innovative products are a result of cutting edge technology, common sense and ingenious use of local commodities with the price range that is affordable to a huge mass of consumers like Tata's one lakh ($ 1677) car Nano, Nokia's sturdy mobile phones, the Chottu Cool' refrigerator and many more. These products might be conceptualized for the customers at the bottom of the pyramid still not limited by scaled down versions meant for the lower end. This paper is an attempt to evaluate how reverse innovations are possible in emerging markets and how it can unlock business opportunities at a global scale. Keywords Emerging market, frugal, innovation, product reverse, technology 1. Introduction In today's changing and competitive environment, innovation is must for the survival of any kind of business in the marketplace. The primary objective of any business firm is to understand...
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...Question 1 Why do companies such as Procter & Gamble target emerging markets? Do you agree with this strategy? For many years, multinational consumer goods company Procter & Gamble lagged behind its direct competitors Colgate-Palmolive and Unilever in emerging markets. Both Colgate and Unilever gain more than half of their revenue from emerging economies. P&G, on the other hand, only generates 40% of its revenue abroad, despite being the world's largest household product maker. P&G is famous for having a rich portfolio of well-recognized brands in the personal care, beauty, grooming, health and fabric segments. As Morningstar notes, some of its brands are essential for retailers to bring more traffic to their stores and therefore enjoy privileged product positioning. More than 20 of P&G's brands generate $1 billion or more in revenues per year and they are extremely popular. These brands are famous for their high quality. However, despite the strength of its portfolio and its presence in more than 180 countries, P&G's performance in global markets is far from amazing. Global growth has roughly been 3% on a dollar basis for the past few years. Considering that there's an emerging middle-class in emerging economies, P&G could not only find a growth catalyst but also find high-profit situations abroad. Big companies such as Procter & Gamble target emerging markets because they are determined to grow. Their strategy is to capture as much customers...
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...Family Care. P&G sell their products in more than 180 countries. Some of 50 Leadership Brands are the world’s most well-known household names. Industry Structure and Global Markets P&G is a global company which manufacture operations in more than 40 countries and sell products in more than 180 countries. Their developed market are North America, Western Europe and Japan. The developing markets includes Asia (excluding Japan), Central & Eastern Europe, Middle East & Africa and Latin America. Although markets outside U.S.A contribute a huge portion of total revenue, there are some risks cannot be ignored. For example, the local regulations, laws and trade barriers can affect transactions. And exchange rates may impact adversely on financial condition. It is also difficult to P&G to protect intellectual property and implement policy immediately. The major competitors of P&G are Johnson & Johnson, Kimberly-Clark Corporation and Unilever. They own a huge percentage of products that we use every day so they are considered to be an oligopoly. P&G are facing an external opportunity that is emerging market in developing countries. Unfortunately, Unilever has already kept one step ahead. Even though Unilever is half size of P&G, it occupies 55 percentage of sales more than P&G’s 37 percentage in emerging market. Besides opportunities, there are some threats such...
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...followed by developed nations is compared and contrasted. The paper further explores the relationship between frugal engineering, design principles, design thinking, co-creation and jugaad. The benefits and implications of jugaad model of innovation for emerging nations as well as developed countries are also discussed. The paper provides better understanding of what jugaad innovation model is and how to accelerate jugaad innovations by firms in emerging markets. Jugaad can provide value for money as well as value for many. Learning to do more with less for more people should be the jugaad innovator’s dream. Key words: Jugaad, Innovation, India, Frugal Innovation, Affordability, MLM, Sustainable Solutions Introduction “Earth provides enough to satisfy every man’s need, but not every man’s greed.” - Mahatma Gandhi Peter Drucker made a very profound observation long back. According to him, as the purpose of business is to create a customer, the business enterprise has two and only two basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs (Trout, 2006; Kotler, 2009). Strategic innovation, which is a must for all marketing firms in today’s market place, in developing markets is fundamentally different from what occurs in developed economies (Anderson and Markides, 2007). Leaders now look to innovation as a principal source of differentiation and competitive advantage. It is important that they should incorporate design thinking...
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...International projector=FSAs from home country copied, no development of new ones. • International coordinator=different parts of the production process in different countries. • Multi-centered MNE=does everything(produce, sell, etc.) in the host country. 2. Non-transferable or location bound FSAs. 4 types of non-transferable FSAs: • Stand-alone resources=linked to location advantages. Such as certain immobile markets. • Other resources=such as local marketing knowledge, don’t have same value abroad. • Local best practices=routines which are highly effective at home, not the same abroad. • Recombination capabilities=taking FSAs/products from home and adapt it to host country. 3. Location advantages. !Strengths of a location, useable for all the firm’s operations in that location. !The reason why an MNE should go there. Foreign direct investment(FDI)=the allocation of resource bundles by an MNE in a host country with the purpose of performing business activities over which MNE contains strategic control. 4 motivations to perform activities abroad: • Natural resource seeking. • Market seeking. • Strategic resource seeking. • Efficiency seeking. 4. Value creation through recombination. Recombination=being able to...
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...these earlier experiences in the subsequent investment decisions. The organisational factors include: • role of the management • motives of the organisation • success at home Other than these internal forces, a number of factors in the environment, outside the organisation, may also force a company to go abroad. These drivers of internationalisation may include: • unsolicited proposal that cannot be ignored. These may include proposals from a foreign government, distributor or customer • competitive drive or bandwagon effect following other competitors or a general belief that presence in a certain market is a must • strong competition from abroad in the home market. It is normally a combination of internal and external factors that is the reason behind a decision to go abroad. Although sometimes it is possible to explain investment in a certain market with one of the above factors, e.g. a number of investments in China can be directly related to...
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...University with support from the National Science Foundation Table of Contents Executive Summary: Globalizing Indian Manufacturing .......... 1 Competing in Global Manufacturing and Service Networks ..... 5 The path to becoming competitive ............................................... 5 Cracking the code for success in emerging markets...................... 5 Overcoming the size barrier.......................................................... 6 Growth strategies for Indian manufacturing ................................ 7 Indian Manufacturing and Global Competitiveness .................. 8 Scale and innovation ................................................................... 8 Reverse currents: Going overseas for growth ............................... 9 Going global with pharmaceuticals .............................................. 9 The opportunity in the food chain ............................................. 10 Becoming suppliers of choice ..................................................... 10 Simplifying India for global retailers ........................................... 11 Multinational Companies Entering Indian Markets ................. 12 From India to the world.............................................................. 12 Beyond borders .......................................................................... 12 Operational Excellence in Indian Manufacturing ..................... 14 The importance of going lean ........................
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...2 Abstract After dominating the local UK market and successfully developing a new market in the US, Dyson, the ambitious vacuum cleaners manufacturer still competes in the mature global market of vacuum cleaners. Adopting a differentiation strategy since its inception, the company aims to take its brand to the next level and to expand into new grounds. This comes in a critical time after a declining market share in its high end vacuum cleaners segment, and withdrawing its innovative and very expensive washing machine from markets. The paper attempts to select the most potential global markets for Dyson to put more marketing investments. The paper suggests those markets to be mostly Scandinavian. The paper also aims to shed the light on the mass distribution strategy adopted in the US market by Dyson. Finally the paper studies the opportunity for Dyson to repeat the huge success of its vacuum cleaner to enter new product category of washing machines. Keywords: Vacuum Cleaners, Dyson, International Marketing, Upright Vacuum, Household Vacuums, Home Appliances, Consumer Goods, Branding, New Market Development, Pricing Strategies, Washing Machines, Advertising, Distribution CASE ANALYSIS - DYSON VACUUM CLEANER 3 Dyson Vacuum Cleaner Shifting from domestic to international marketing with the famous bagless vacuum cleaner International Marketing – Assignment 2 Introduction The global vacuum cleaners market have had a...
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...benefit from access to global resources, decades of experience and our large chain of research and development centres. This makes it multidomestic in nature. The company has a history of various successful strategies which has helped Nestle each to a level which we see it today. This study is done to understand its various entry strategies in multiple geographies around the globe and also to understand its differentiating factor which make it the leading brand. Nestle has first mover and competitive advantage over its peers. It is known for its innovations, successful marketing strategies, R&D , CSR activities and localization across geographies. This study gives comprehensive information about Nestlé’s strategies which make them the market leader and stave off the competition. It also cites various examples of various innovations and disruptive strategies used by Nestle across the globe. INTRODUCTION: With the dawn of globalization, international business is becoming increasingly popular. Multinational organizations are among the most...
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...2 Abstract After dominating the local UK market and successfully developing a new market in the US, Dyson, the ambitious vacuum cleaners manufacturer still competes in the mature global market of vacuum cleaners. Adopting a differentiation strategy since its inception, the company aims to take its brand to the next level and to expand into new grounds. This comes in a critical time after a declining market share in its high end vacuum cleaners segment, and withdrawing its innovative and very expensive washing machine from markets. The paper attempts to select the most potential global markets for Dyson to put more marketing investments. The paper suggests those markets to be mostly Scandinavian. The paper also aims to shed the light on the mass distribution strategy adopted in the US market by Dyson. Finally the paper studies the opportunity for Dyson to repeat the huge success of its vacuum cleaner to enter new product category of washing machines. Keywords: Vacuum Cleaners, Dyson, International Marketing, Upright Vacuum, Household Vacuums, Home Appliances, Consumer Goods, Branding, New Market Development, Pricing Strategies, Washing Machines, Advertising, Distribution CASE ANALYSIS - DYSON VACUUM CLEANER 3 Dyson Vacuum Cleaner Shifting from domestic to international marketing with the famous bagless vacuum cleaner International Marketing – Assignment 2 Introduction The global vacuum cleaners market have had a...
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