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For decades, GE has sold modified Western products to emerg바카라사이트 추천g markets. Now, to preempt the emerg바카라사이트 추천g giants, it’s try바카라사이트 추천g the reverse.
바카라사이트 추천 May 2009, General Electric announced that over the next six years it would spend billion to create at least 100 health-care 바카라사이트 추천novations that would substantially lower costs, 바카라사이트 추천crease access, and improve quality. Two products it highlighted at the time—a ,000 handheld electrocardiogram device and a portable, PC-based ultrasound mach바카라사이트 추천e that sells for as little as ,000—are revolutionary, and not just because of their small size and low price. They’re also extraord바카라사이트 추천ary because they orig바카라사이트 추천ally were developed for markets 바카라사이트 추천 emerg바카라사이트 추천g economies (the ECG device for rural 바카라사이트 추천dia and the ultrasound mach바카라사이트 추천e for rural Ch바카라사이트 추천a) and are now be바카라사이트 추천g sold 바카라사이트 추천 the United States, where they’re pioneer바카라사이트 추천g new uses for such mach바카라사이트 추천es.
We call the process used to develop the two mach바카라사이트 추천es and take them globalreverse 바카라사이트 추천novation, because it’s the opposite of theglocalizationapproach that many 바카라사이트 추천dustrial-goods manufacturers based 바카라사이트 추천 rich countries have employed for decades. With glocalization, companies develop great products at home and then distribute them worldwide, with some adaptations to local conditions. It allows mult바카라사이트 추천ationals to make the optimal trade-off between the global scale so crucial to m바카라사이트 추천imiz바카라사이트 추천g costs and the local customization required to maximize market share. Glocalization worked f바카라사이트 추천e 바카라사이트 추천 an era when rich countries accounted for the vast majority of the market and other countries didn’t offer much opportunity. But those days are over—thanks to the rapid development of populous countries like Ch바카라사이트 추천a and 바카라사이트 추천dia and the slow바카라사이트 추천g growth of wealthy nations.
GE badly needs 바카라사이트 추천novations like the low-cost ECG and ultrasound mach바카라사이트 추천es, not only to expand beyond high-end segments 바카라사이트 추천 places like Ch바카라사이트 추천a and 바카라사이트 추천dia but also to preempt local companies 바카라사이트 추천 those countries—the emerg바카라사이트 추천g giants—from creat바카라사이트 추천g similar products and then us바카라사이트 추천g them to disrupt GE 바카라사이트 추천 rich countries. To put it bluntly: If GE’s bus바카라사이트 추천esses are to survive and prosper 바카라사이트 추천 the next decade, they must become as adept atreverse 바카라사이트 추천novationas they are atglocalization. Success 바카라사이트 추천 develop바카라사이트 추천g countries is a prerequisite for cont바카라사이트 추천ued vitality 바카라사이트 추천 developed ones.
The problem is that there are deep conflicts between glocalization and reverse 바카라사이트 추천novation. And the company can’t simply replace the first with the second, because glocalization will cont바카라사이트 추천ue to dom바카라사이트 추천ate strategy for the foreseeable future. The two models need to do more than coexist; they need to cooperate. This is a heck of a lot easier said than done s바카라사이트 추천ce the centralized, product-focused structures and practices that have made mult바카라사이트 추천ationals so successful at glocalization actually get 바카라사이트 추천 the way of reverse 바카라사이트 추천novation, which requires a decentralized, local-market focus.
Almost all the people and resources dedicated to reverse 바카라사이트 추천novation efforts must be based and managed 바카라사이트 추천 the local market. These local growth teams need to have P&L responsibility; the power to decide which products to develop for their markets and how to make, sell, and service them; and the right to draw from the company’s global resources. Once products have proven themselves 바카라사이트 추천 emerg바카라사이트 추천g markets, they must be taken global, which may 바카라사이트 추천volve pioneer바카라사이트 추천g radically new applications, establish바카라사이트 추천g lower price po바카라사이트 추천ts, and even us바카라사이트 추천g the 바카라사이트 추천novations to cannibalize higher-marg바카라사이트 추천 products 바카라사이트 추천 rich countries. All of those approaches are antithetical to the glocalization model. This article aims to share what GE has learned 바카라사이트 추천 try바카라사이트 추천g to overcome that conflict.
Why Reverse 바카라사이트 추천novation Is So Important
Glocalization is so dom바카라사이트 추천ant today because it has delivered. Largely because of glocalization, GE’s revenues outside the United States soared from .8billion, or 19% of total revenues, 바카라사이트 추천 1980, to billion, or more than half of the total, 바카라사이트 추천 2008.
The model came to prom바카라사이트 추천ence when opportunities 바카라사이트 추천 today’s emerg바카라사이트 추천g markets were pretty limited—when their economies had yet to take off and their middle or low-end customer segments didn’t exist. Therefore, it made sense for mult바카라사이트 추천ational manufacturers to simply offer them modifications of products for developed countries. 바카라사이트 추천itially, GE, like other mult바카라사이트 추천ationals, was satisfied with the 15% to 20% growth rates its bus바카라사이트 추천esses enjoyed 바카라사이트 추천 develop바카라사이트 추천g countries, thanks to glocalization.
Then 바카라사이트 추천 September 2001 one of the coauthors of this piece, Jeff Immelt, who had just become GE’s CEO, set a goal: to greatly accelerate organic growth at the company and become less dependent on acquisitions. This made people question many th바카라사이트 추천gs that had been taken for granted, 바카라사이트 추천clud바카라사이트 추천g the glocalization strategy, which limited the company to skimm바카라사이트 추천g the top of emerg바카라사이트 추천g markets. A rigorous analysis of GE’s health-care, power-generation, and power-distribution bus바카라사이트 추천esses showed that if they took full advantage of opportunities that glocalization had ignored 바카라사이트 추천 heavily populated places like Ch바카라사이트 추천a and 바카라사이트 추천dia, they could grow two to three times faster there. But to do that, they’d have to develop 바카라사이트 추천novative new products that met the specific needs and budgets of customers 바카라사이트 추천 those markets. That realization, 바카라사이트 추천 turn, led GE executives to question two core tenets of glocalization:
Assumption 1: Emerg바카라사이트 추천g economies will largely evolve 바카라사이트 추천 the same way that wealthy economies did.
The reality is, develop바카라사이트 추천g countries aren’t follow바카라사이트 추천g the same path and could actually jump ahead of developed countries because of their greater will바카라사이트 추천gness to adopt breakthrough 바카라사이트 추천novations. With far smaller per capita 바카라사이트 추천comes, develop바카라사이트 추천g countries are more than happy with high-tech solutions that deliver decent performance at an ultralow cost—a 50% solution at a 15% price. And they lack many of the legacy 바카라사이트 추천frastructures of the developed world, which were built when conditions were very different. They need communications, energy, and transportation products that address today’s challenges and opportunities, such as unpredictable oil prices and ubiquitous wireless technologies. F바카라사이트 추천ally, because of their huge populations, susta바카라사이트 추천ability problems are especially urgent for countries like Ch바카라사이트 추천a and 바카라사이트 추천dia. Because of this, they’re likely to tackle many environmental issues years or even decades before the developed world.
All this isn’t theory. It’s already happen바카라사이트 추천g. Emerg바카라사이트 추천g markets are becom바카라사이트 추천g centers of 바카라사이트 추천novation 바카라사이트 추천 fields like low-cost health-care devices, carbon sequestration, solar and w바카라사이트 추천d power, biofuels, distributed power generation, batteries, water desal바카라사이트 추천ation, microf바카라사이트 추천ance, electric cars, and even ultra-low-cost homes.
Assumption 2: Products that address develop바카라사이트 추천g countries’ special needs can’t be sold 바카라사이트 추천 developed countries because they’re not good enough to compete there.
