GE spent $3 billion developing over 100 health innovations for rural India and China, including a $1000 ECG device and $15,000 ultrasound machine. Known as "reverse innovation", these products were originally made for emerging markets but are now being sold globally. Reverse innovation allows GE to grow faster developing products for local needs and budgets, and defend against competitors from developing countries. GE applies lessons from reverse innovation, such as involving local teams, to capture more opportunities in large emerging markets like India.
GE spent $3 billion developing over 100 health innovations for rural India and China, including a $1000 ECG device and $15,000 ultrasound machine. Known as "reverse innovation", these products were originally made for emerging markets but are now being sold globally. Reverse innovation allows GE to grow faster developing products for local needs and budgets, and defend against competitors from developing countries. GE applies lessons from reverse innovation, such as involving local teams, to capture more opportunities in large emerging markets like India.
GE spent $3 billion developing over 100 health innovations for rural India and China, including a $1000 ECG device and $15,000 ultrasound machine. Known as "reverse innovation", these products were originally made for emerging markets but are now being sold globally. Reverse innovation allows GE to grow faster developing products for local needs and budgets, and defend against competitors from developing countries. GE applies lessons from reverse innovation, such as involving local teams, to capture more opportunities in large emerging markets like India.
GE spent $3 billion developing over 100 health innovations for rural India and China, including a $1000 ECG device and $15,000 ultrasound machine. Known as "reverse innovation", these products were originally made for emerging markets but are now being sold globally. Reverse innovation allows GE to grow faster developing products for local needs and budgets, and defend against competitors from developing countries. GE applies lessons from reverse innovation, such as involving local teams, to capture more opportunities in large emerging markets like India.
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How GE is Disrupting
Itself GE spend $3 billion to create at least 100 health-care innovations which substantially lower costs, increase access and improve quality. 2 Product Highlighted Handheld electrocardiogram device - $1000 Portable ultrasound machine - $ 15000 They are revolutionary in not just because of small size and lower price but also their INNOVATION PROCESS They are originally developed for rural area of India and China and now are being sold in the United States . This process is called REVERSE INNOVATION Earlier GE and other leading technology companies developed high end products at home countries and distributed them globally with some adaptions to local markets. This process is called GLOCALIZATION In reverse innovations, products were created specially for emerging markets but brought back into wealthy markets Why Reverse Innovation is So Important
In India and China, GE could grow two to three times faster there to develop innovative new products that met the specific needs and budgets to customers GE used reverse innovation as defensive reasons. If GE doesn’t come up with innovations in poor countries and take them global, new competitors from the developing world will do ( Mindray, Suzlon, Goldwind, Haier) By introducing products that create a new price – performance paradigm, the emerging giants can be well served The major business functions including R&D, manufacturing and marketing were centralised at headquarters. They are moved abroad to tap overseas talent and reduce costs, focusing on wealthy countries Reverse Innovation in Practice
Original Product The emerging market disruption New global market GE saw a problem – In wealthy countries performance mattered the most followed by features. In China price mattered the most, followed by probability and ease of use GE involved local growth team (LGT) model based on 5 critical principles Shift power to where the growth is Build new offerings from the ground up Build LGT from the ground up like new companies Customize objectives, targets and metrics Have LGT report to someone high in the organisaton GE R&D centre in China and India have increased their focus on the problems of developing countries, the vast majority of their resources are still devoted to initiatives for developed ones. Biggest Experiment – To speed progress in India, GE is creating a separate P&L that will include all GE businesses in that country and giving the new unit considerable power to tap GE’s Global R&D resources GE Challenge - Resistance to giving India its own P&L, changing the mind set of managers who have spent their careers excelling at glocalization Jeff Immelt thought there are triple the size opportunity in Indian market. There is more requirement of resources, more people and more products in there. This shows you are deep in that market an not just skimming the very top
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