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PublicationBusiness Models for Frugal Innovation in Emerging Markets: The Case of the Medical Device and Laboratory Equipment Endustry(Elsevier Science, 2017-08)This study investigates business models for frugal innovation (i.e. a specific form of resource-constrained innovation) in the medical device and laboratory equipment industry in the context of emerging markets. Based on original data from five case studies, we investigate how firms can set up value creation and value capturing mechanisms to reach new customer segments in remote rural areas with unprecedented value propositions. With this research, we contribute to the literature on frugal innovation and business models in emerging markets. It is one of the first empirical studies to apply a fine-grained perspective on resource-constrained innovation in emerging markets. In doing so, we focus on its most disruptive form, which is when these innovations entail entirely new applications. We advance and detail the value proposition for frugal innovation in these industries and argue that frugal innovation create new markets. Further, we show how firms set up their value creation and value capturing mechanisms to achieve the frugal value proposition and identify two distinct Research & Development (R&D) strategies for frugal innovation.Type:Journal:Volume:
Scopus© Citations 121 -
PublicationCoordination Mechanisms for International Innovation in SMEs: Effects on Time-To-Market and R&D Task Complexity as a Moderator(Springer Science & Business Media, 2016)
Scopus© Citations 34 -
PublicationManaging dual business models in emerging markets: An ambidexterity perspective(Wiley-Blackwell, 2016-06)Research on dual business models has highlighted the challenge for firms when they compete with different business models in a market. Drawing from ambidexterity literature, we investigate the question how firms integrate or separate business models on the level of value chain activities, which constitute the core operational activities within each business model. We employ a qualitative research approach based on eleven case studies of Western firms that implemented a low-cost business model in parallel to their premium business model in emerging markets. We find that firms may become ambidextrous in their business models by means of domain separation. In doing so, firms may separate value chain activities to address different additional customer segments in emerging markets. This study contributes to the emerging topic of dual business models and provides the ground for future research on ambidexterity in a global context.
Scopus© Citations 79 -
PublicationCoordination in global R&D organizations: an examination of the role of subsidiary mandate and modular product architectures in dispersed R&D organizations(Elsevier Scientific Publishing Co., 2014-10-12)International research and development (R&D) operations require a significant amount of coordination between the headquarters and the subsidiaries in order to integrate the dispersed activities in one final product. This article explores what mechanisms multinational companies (MNCs) use to coordinate their overseas R&D units. Based on a multiple case study involving nine MNCs with overseas R&D subsidiaries of varying mandates, we find that R&D sites with high technology and/or market orientation tend to be coordinated by informal mechanisms while sites with little technology and/or market orientation tend to be coordinated by formal mechanisms. Furthermore, it appears that this relationship is strongly affected by the product's architecture: while rather complex R&D activities are conducted at the systems level and at sites with high technology orientation, less complex R&D activities are conducted at the component level at sites with low technology and market orientation. Finally, the findings suggest that modular product architectures have a coordinating effect in global R&D activities which have the power to lower firms' overall coordination effort. The findings bear important implications for the effective coordination of MNCs' international R&D subsidiaries.Type:Journal:Volume:Issue:
Scopus© Citations 23 -
PublicationOrganizing for reverse innovation in Western MNCs: the role of frugal product innovation capabilities(Inderscience Enterprises Ltd., 2014-03)The burgeoning phenomenon of reverse innovation - i.e., innovations which are adopted first in the developing world - has attracted much academic and managerial attention. However, while existing literature has extensively discussed the risks and opportunities of reverse in-novation for Western multinational companies (MNCs), there is little empirical insight in the question how reverse innovation is organized in the firm. This article investigates how Western MNCs of the healthcare and electronics industries organize their international R&D for reverse innovation. Based on the insights of four case studies, we find that the location of the product mandate (i.e., at the headquarters or the subsidiary) is independent of the MNC's ability to generate reverse innovation. In contrast, we find that the design and development of reverse product innovations are always located in the MNC's subsidiary based in a resource-constrained environment. We argue that the development of frugal product innovation capabilities is a critical success factor in the development of reverse innovation. The article holds important implications for theory and management practice.Type:Journal:Volume:Issue:
Scopus© Citations 69 -
PublicationFrom Cost to Frugal and Reverse Innovation : Mapping the Field and Implications for Global Competitiveness(Industrial Research Institute, 2014-07-12)Product and service innovations aimed at resource-constrained customers in emerging markets have recently attracted much research and management attention. Despite the prominence of this topic, however, there are some misconceptions around the different innovation types in this domain that may limit managers' ability to derive informed implications for strategy and operations. This article analyzes the different types of resource-constrained innovation-cost, good-enough, frugal, and reverse innovation-conceptualizes the distinctions between them, and discusses the implications for strategy providing a framework for managers to systematically analyze their own approaches to resource-constrained innovation and craft proper development processes. By highlighting the differences between the various types of resourceconstrained innovation, this article also provides the conceptual grounds for further systematic research.
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PublicationImplementing radical innovation in the business: the role of transition modes in large firms(Wiley-Blackwell, 2012-03)Extensive research has emphasized the relevance and importance of separating explorative from exploitative activities within firms. Recently, several scholars have argued that, in order to be successful, the outcomes of such structurally separated explorative activities need to be integrated in the operational business units of the firm. Nevertheless, detailed research on how such integration can be realized is lacking. Based on in-depth case studies of seven large multinational, technology intensive companies, we find five transition modes on how interfaces between radical innovation units and operational business are managed effectively as a means to implement radical innovation on a company level: (1) external validating; (2) liaison channeling; (3) showcasing innovation; (4) network building; and (5) integrative innovation planning.Type:Journal:Volume:Issue:
Scopus© Citations 44 -
PublicationFrugal Innovation in Emerging Markets(Industrial Research Institute, 2011-07)The quality and number of innovations developed by multinational companies from emerging countries is increasing dramatically. In particular, frugal innovations - "good-enough," affordable products that meet the needs of resource-constrained consumers - have created tremendous demand in emerging markets. While the development of such products has largely been the domain of local corporations in emerging countries, Western corporations have recently started to engage in frugal innovation as well. This is a diffi cult task for Western firms, however, because their business models and organizational structures are traditionally designed for the development of advanced products for the affl uent few at the top of the economic pyramid. Using Swiss weighing-instrument manufacturer Mettler Toledo as a case example, this article suggests that frugal innovations are largely developed by local R&D subsidiaries of Western fi rms in emerging countries. A substantial degree of autonomy for those local R&D subsidiaries, including product-portfolio responsibilities, can facilitate the development of frugal innovation.Type:Journal:Volume:Issue:
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PublicationCrossing the Industry-Line : Breakthrough Innovation through Cross-Industry Alliances with 'Non-Suppliers'(Elsevier, 2010-09-04)Past research on alliances has elaborated on the motives, determinants and benefits of cooperative relationships between firms. Notwithstanding their benefits, alliances entail mutual dependence on partners' complementary resources, and this is particularly true for vertical R&D alliances, where the development of technological innovation depends largely on suppliers' R&D results. In such settings, alliances may be prone to rigidities when it comes to developing breakthrough innovations. This article illustrates how the automobile manufacturer BMW mitigated its dependence on its established suppliers and engaged in a cross-industry alliance with a ‘non-supplier' to successfully develop a breakthrough innovation. Based on the case, we discuss the strategic and operational challenges inherent in cross-industry R&D alliances with non-suppliers. Our findings imply that the success of cross-industry alliances depends on specific actions at the strategic and operational levelsType:Journal:Volume:Issue:
Scopus© Citations 80 -
PublicationOpening Up the Solution Space: The Role of Analogical Thinking for Breakthrough Product Innovation(Willey-Blackwell, 2008-05-08)The purpose of this paper is to investigate the approach of analogical thinking for product innovation. We collected data of projects from four engineering firms where analogical thinking was successfully applied for the development of breakthrough innovations. Results show that abstracting the problem by in-depth technical and contextual analysis is pivotal when searching for analogical solutions. Furthermore, chances for the identification of highly novel analogous solutions are increased if the problem is abstracted to the level of its structural similarities to other settings. We also found that the identification of structural similarities is supported when firms not only rely on the cognitive abilities of the individual but employ an active search based on abstract search terms. Based on these insights, we propose a process model for the develop-ment of product innovations by means of analogical thinking.Type:Journal:Volume:Issue:
Scopus© Citations 112
