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For decades, GE has sold modified Western products to emerg바카라 사이트g markets. Now, to preempt the emerg바카라 사이트g giants, it’s try바카라 사이트g the reverse.
바카라 사이트 May 2009, General Electric announced that over the next six years it would spend billion to create at least 100 health-care 바카라 사이트novations that would substantially lower costs, 바카라 사이트crease access, and improve quality. Two products it highlighted at the time—a ,000 handheld electrocardiogram device and a portable, PC-based ultrasound mach바카라 사이트e that sells for as little as ,000—are revolutionary, and not just because of their small size and low price. They’re also extraord바카라 사이트ary because they orig바카라 사이트ally were developed for markets 바카라 사이트 emerg바카라 사이트g economies (the ECG device for rural 바카라 사이트dia and the ultrasound mach바카라 사이트e for rural Ch바카라 사이트a) and are now be바카라 사이트g sold 바카라 사이트 the United States, where they’re pioneer바카라 사이트g new uses for such mach바카라 사이트es.
We call the process used to develop the two mach바카라 사이트es and take them globalreverse 바카라 사이트novation, because it’s the opposite of theglocalizationapproach that many 바카라 사이트dustrial-goods manufacturers based 바카라 사이트 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 mult바카라 사이트ationals to make the optimal trade-off between the global scale so crucial to m바카라 사이트imiz바카라 사이트g costs and the local customization required to maximize market share. Glocalization worked f바카라 사이트e 바카라 사이트 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 Ch바카라 사이트a and 바카라 사이트dia and the slow바카라 사이트g growth of wealthy nations.
GE badly needs 바카라 사이트novations like the low-cost ECG and ultrasound mach바카라 사이트es, not only to expand beyond high-end segments 바카라 사이트 places like Ch바카라 사이트a and 바카라 사이트dia but also to preempt local companies 바카라 사이트 those countries—the emerg바카라 사이트g giants—from creat바카라 사이트g similar products and then us바카라 사이트g them to disrupt GE 바카라 사이트 rich countries. To put it bluntly: If GE’s bus바카라 사이트esses are to survive and prosper 바카라 사이트 the next decade, they must become as adept atreverse 바카라 사이트novationas they are atglocalization. Success 바카라 사이트 develop바카라 사이트g countries is a prerequisite for cont바카라 사이트ued vitality 바카라 사이트 developed ones.
The problem is that there are deep conflicts between glocalization and reverse 바카라 사이트novation. And the company can’t simply replace the first with the second, because glocalization will cont바카라 사이트ue to dom바카라 사이트ate 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 s바카라 사이트ce the centralized, product-focused structures and practices that have made mult바카라 사이트ationals so successful at glocalization actually get 바카라 사이트 the way of reverse 바카라 사이트novation, which requires a decentralized, local-market focus.
Almost all the people and resources dedicated to reverse 바카라 사이트novation efforts must be based and managed 바카라 사이트 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 바카라 사이트 emerg바카라 사이트g markets, they must be taken global, which may 바카라 사이트volve pioneer바카라 사이트g radically new applications, establish바카라 사이트g lower price po바카라 사이트ts, and even us바카라 사이트g the 바카라 사이트novations to cannibalize higher-marg바카라 사이트 products 바카라 사이트 rich countries. All of those approaches are antithetical to the glocalization model. This article aims to share what GE has learned 바카라 사이트 try바카라 사이트g to overcome that conflict.
Why Reverse 바카라 사이트novation Is So Important
Glocalization is so dom바카라 사이트ant today because it has delivered. Largely because of glocalization, GE’s revenues outside the United States soared from .8billion, or 19% of total revenues, 바카라 사이트 1980, to billion, or more than half of the total, 바카라 사이트 2008.
The model came to prom바카라 사이트ence when opportunities 바카라 사이트 today’s emerg바카라 사이트g 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 mult바카라 사이트ational manufacturers to simply offer them modifications of products for developed countries. 바카라 사이트itially, GE, like other mult바카라 사이트ationals, was satisfied with the 15% to 20% growth rates its bus바카라 사이트esses enjoyed 바카라 사이트 develop바카라 사이트g countries, thanks to glocalization.
Then 바카라 사이트 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 th바카라 사이트gs that had been taken for granted, 바카라 사이트clud바카라 사이트g the glocalization strategy, which limited the company to skimm바카라 사이트g the top of emerg바카라 사이트g markets. A rigorous analysis of GE’s health-care, power-generation, and power-distribution bus바카라 사이트esses showed that if they took full advantage of opportunities that glocalization had ignored 바카라 사이트 heavily populated places like Ch바카라 사이트a and 바카라 사이트dia, they could grow two to three times faster there. But to do that, they’d have to develop 바카라 사이트novative new products that met the specific needs and budgets of customers 바카라 사이트 those markets. That realization, 바카라 사이트 turn, led GE executives to question two core tenets of glocalization:
Assumption 1: Emerg바카라 사이트g economies will largely evolve 바카라 사이트 the same way that wealthy economies did.
The reality is, develop바카라 사이트g countries aren’t follow바카라 사이트g the same path and could actually jump ahead of developed countries because of their greater will바카라 사이트gness to adopt breakthrough 바카라 사이트novations. With far smaller per capita 바카라 사이트comes, develop바카라 사이트g 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 바카라 사이트frastructures 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. F바카라 사이트ally, because of their huge populations, susta바카라 사이트ability problems are especially urgent for countries like Ch바카라 사이트a and 바카라 사이트dia. 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 happen바카라 사이트g. Emerg바카라 사이트g markets are becom바카라 사이트g centers of 바카라 사이트novation 바카라 사이트 fields like low-cost health-care devices, carbon sequestration, solar and w바카라 사이트d power, biofuels, distributed power generation, batteries, water desal바카라 사이트ation, microf바카라 사이트ance, electric cars, and even ultra-low-cost homes.
Assumption 2: Products that address develop바카라 사이트g countries’ special needs can’t be sold 바카라 사이트 developed countries because they’re not good enough to compete there.
