Anna Dubiel

The Antecedents and Consequences of Affordable Value Innovations for Emerging Markets

Emerging markets offer tremendous growth opportunities for firms. While established multinational firms typically focus on premium segments in emerging markets, they often fail to leverage additional growth opportunities in so-called good enough or low-income segments in emerging markets. Customers in these low-income markets have substantially different requirements and are very price sensitive. Theoretical and case-based research suggests that innovating for these low-income segments in emerging markets differs significantly from innovating for premium or traditional Western markets. We argue that tapping successfully into low-income segments in emerging markets requires the development of new products that meet the low price expectations while at the same time offering also value to customers in these segments. We refer to these new products as affordable value innovations. We analyze the antecedents of affordable value innovation for emerging markets. We draw on institutional theory to derive three potentially relevant antecedents of affordable value innovation for emerging markets. These are bricolage, local embeddedness, and standardization. We test our hypotheses using multiple informant data from 47 multinational corporations involving 103 innovation projects that target low-income customers in emerging markets. Our empirical analysis shows that all three antecedents have significant effects on the level of affordable value innovation: while bricolage and local embeddedness are positively related to the level of affordable value innovation, standardization has a negative impact. We also examine the relationship between the level of affordable value innovation and performance. We find evidence for our basic assumption that a firms capability to develop and launch affordable value innovations is key to success in emerging markets. It indicates that a firms investments in affordable value innovations for emerging markets pay off financially. Finally, a cross-regional comparison of our data shows that the key findings on antecedents of affordable value innovation and its impact on performance do not vary across various emerging markets. Overall, our findings offer important implications for research on and the practice of innovation for low-income segments in emerging markets.

The democratizing effects of frugal innovation

Purpose – The aim of this paper is to examine the impact of frugal innovation in the fields of livelihood provision, education, infrastructure, and distribution networks on state-building in countries where a significant proportion of the population lives at the base of the pyramid (BoP). Design/methodology/approach – The paper reviews the literature on frugal innovation, democratization and state-building, offers practical examples in support of the conceptual arguments, and provides research propositions for empirical assessment. Findings – The paper provides support for the notion that the creation of more inclusive markets through frugal innovation contributes to socio-economic development, which in turn strengthens democratization and state-building. Practical implications – Multinational corporations can have a positive impact on democratization by offering for-profit products and services to serve BoP markets. Originality/value – The paper provides novel insights into the role that frugal innovatio...

Strategische Bedeutung lokaler F&E in Emerging Markets

Innovationen sind in Zeiten der Globalisierung ohne Zweifel einer der masgeblichen Treiber fur den nachhaltigen Erfolg technologieorientierter Unternehmen. Mehr noch, ohne einen stetigen Quell an Innovationen wurde die Wettbewerbsfahigkeit eines einzelnen Unternehmens massiv beeintrachtigt, so dass insgesamt sogar sein bloses Fortbestehen auf dem Spiel stehen kann (Brockhoff 1999, Ernst 2007). Innovationen verfugen somit uber eine strategische Tragweite fur wissensintensive, technologieorientierte Unternehmen (Hauschildt und Salomo 2007).

Industrial R&D Centers in Emerging Markets: Motivations, Barriers, and Success Factors

Due to their strong economic growth as well as increasing local know-how, emerging markets (EMs) have turned into attractive locations for research and development (R&D) activities of Western multinational companies (MNCs) in the last two decades. Especially, full-fledged R&D laboratories focusing on core products of MNCs are mushrooming regardless of industry. On the basis of a recent research study of German and US MNCs, we identify the main motivations and barriers related to establishing R&D sites in EMs as well as demonstrate how these barriers can be overcome in order to reach the aims encapsulated in the internationalization motives. We find that of particular importance for a successful R&D center in EMs are presence of a global R&D strategy, top management support, personality of the R&D site managing director, “ownership” of development tasks, global innovation culture, accurate R&D HR policy, and external as well as internal networking. Finally, we demonstrate that local R&D laboratories increasingly develop products for worldwide markets.

Die wichtigsten Erfolgsfaktoren beim Aufbau von F&E in Emerging Markets

Aus den vorgestellten Unternehmensbeispielen geht eine Vielzahl von Masnahmen hervor, die fur den Erfolg eines neuen F &E-Standorts in einem Emerging Market entscheidend sind. Bedeutsam hierbei ist, dass es sich um eine Mischung verschiedener Masnahmen handelt. Einen einzelnen, alles entscheidenden Erfolgsfaktor gibt es nicht. So sollte eine Vielzahl der vorgestellten Masnahmen als ein auf den neuen Standort abgestimmtes Bundel und im Einklang mit der unternehmensweiten Strategie eingesetzt werden. Fur die Umsetzung bzw. Unterstutzung dieser Masnahmen sind zahlreiche Akteure innerhalb des Unternehmensnetzwerks verantwortlich: Neben dem Stammhaus sowie dem neuen F &E-Standort ist auch der Beitrag anderer Unternehmensniederlassungen sowohl im Heimatland wie auch in anderen Auslandsmarkten unablassig. Die Praxisbeispiele aus den Unternehmen zeigen, dass die vorgestellten Masnahmen zum Erfolg des neuen F &E-Standorts fuhren. Der Erfolg manifestiert sich u. a. durch eine uberdurchschnittliche Anzahl erfolgreicher Innovationsprojekte, eine steigende Anzahl an Patenten und wissenschaftlichen Publikationen, eine uberdurchschnittliche Bewertung des neuen F &E-Standorts in internen Mitarbeiterbefragungen sowie eine geringere Mitarbeiterfluktuation.