How to move innovations from developing countries to advanced markets? A multiple case study of three archetypes of reverse innovation

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Journal Title

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Volume Title

School of Business | Master's thesis

Authors

Date

2017

Department

Johtamisen laitos

Major/Subject

Mcode

Degree programme

Management and International Business (MIB)

Language

en

Pages

85

Series

Abstract

Developing countries are becoming more and more attractive sources for innovations. The concept of reverse innovation has emerged to acknowledge this potential and to highlight the role developing markets play as a source for global solutions. Prior research on reverse innovation has mainly been focusing on the context of multinational companies in which reverse innovation is seen as a strategy for creating new market opportunities in the developing world. This one-sided research focus underestimates the potential of the phenomenon and its implications. Therefore, the purpose of this study is to examine the concept of reverse innovation from a new perspective. The objective is to identify how developing country innovations can be used as a basis for new solutions in advanced countries and to provide insights on how the reverse innovation process for advanced-country organizations differs from a typical innovation process. The review of existing literature reveals that transferring an innovation from developing to developed market is in the core of reverse innovation. Therefore, reverse innovation is not a concept that would associate an innovation with specific features, but instead, it should be seen as a process. The process of reverse innovation from the perspective of developed-country organization has four main phases. These phases are concept development, crossover, development and adaptation, and market introduction in advanced market. The empirical analysis was conducted as a multiple case study and the following three cases were examined with respect to their innovation process: Megamalli, Prevention and Access to Treatment and Care (PACT) and MAC 400 by GE. Both primary and secondary data was used and the data was analyzed by using thematic analysis. The results indicate that the biggest determinant of reverse innovation process is the so-called crossover phase, which captures the transfer of an innovation from developing to advanced market. From the analysis of the crossover stage in the case innovation processes it was possible to identify three different ways the innovation transfer can take place: 1) idea transfer; 2) method transfer; 3) full innovation transfer. These different archetypes of the reverse innovation process capture the extent to which the innovation is based on the original developing country innovation and the level of adaptation required before it is launched in the advanced market. Understanding how reverse innovation can be implemented helps companies in advanced markets to identify the most suitable way for them to take advantage of the innovation potential present in developing countries. The archetypes of reverse innovation show that innovating for developing markets is not the only option to do so.

Description

Thesis advisor

Levänen, Jarkko

Keywords

reverse innovation, innovation process, innovation transfer, advanced market, developing market

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Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-201711137557

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[gradu] Kauppakorkeakoulu / BIZ