Backward innovation - An opportunity to extend product life cycles on a global basis?
GRIN Verlag, Jul 10, 2007 - Business & Economics - 21 pages
Seminar paper from the year 2006 in the subject Business economics - Marketing, Corporate Communication, CRM, Market Research, Social Media, grade: 1,0, European Business School - International University Schloß Reichartshausen Oestrich-Winkel, 36 entries in the bibliography, language: English, abstract: With mostly saturated markets in developed countries, the markets of the emerging economies constitute the major growth opportunity for most multi-national corporations (MNCs) today. But tapping into the potential of these markets is no easy task. Simple export strategies with little or no responsiveness to local needs failed numerous times. MNCs often have the wrong mindsets to be successful in these markets, assuming these markets will go through the same process of development as the western markets, only ten or twenty years behind. Product policies therefore concentrate on dumping old and outdated products in these markets. Many MNCs had problems with this way of approaching emerging markets, as they have unique requirements that need to be considered. Backward innovation, the deliberate simplification of existing products, can be seen as one strategy that responds to those needs and can be very successful in these emerging markets. Backward innovation falls back on using existing, but modified products; a successful use of this strategy may well be a way to extend the life of a product that finds itself already in the maturity or declining stage of its life cycle in its home market. To examine how backward innovation is used in global (particularly in emerging) markets and how successful it is in extending the life of a product will be the main focus of this paper.
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A. V. C. Galina able to afford Arnold backward innovation strategies bottom-of-the pyramid segment Brazil BRIC countries C. K. Lieberthal China competition concept of backward consumer Corporate Strategy Board cost advantage customer base D. J. Quelch decline phase decline stage developed markets developing countries discussed econo emerging economies emerging mar emerging markets existing product extend product extend the product Fiat Palio Fiat’s foreign Foreign direct investment further revenues Geschichte 2006 global Golf growth Handelsblatt Harvard Business Review high-technology products home market Hult Hüttel increasing India international product introduced Khanna laptop Latin America leveraged Limbach low-income customers mature product maturity and decline mindset mobile phones needs numbers OLPC Onkvist Prahalad PriceWaterhouseCoopers 2006 prod product among current product change product development product life cycle product policy S./Shaw Shainesh stripped-down products successful tion uct life cycle Vernon Volkswagen AG Volkswagen Beetle Volkswagen continued wind-up power world’s