Der Erfolg frugaler Produkte ist nicht aufzuhalten!

Pressemitteilung / Hamburg, 21.10.2013

Center for Frugal Innovation @ TUHH„Deutsche Baumaschinen zu gut für den Weltmarkt“ titelte Die Welt am 17.4.2013. Deutsche Maschinenbauer werden dem Bericht zufolge trotz Innovationstrophäen von den Märkten der Schwellenländer verdrängt. Die Gründe sind sowohl die fehlende Zahlungskraft als auch die abnehmende Zahlungsbereitschaft lokaler Kunden. Anstelle hoch komplexer („over-engineered“) und damit einhergehend teurer Produkte fragen sie erschwingliche und robuste Technik nach, die häufig aus anderen Ländern und insbesondere aus den Schwellenländern selbst kommt. Solche „good enough“ Produkte, Lösungen mit ausreichender Funktionalität bei guter Qualität und einem sehr wettbewerbsfähigen Preisniveau, kennzeichnen den Innovationsansatz „fugaler Innovationen“. Weiterlesen

Indien – Chance oder Fallstrick? Was ist die richtige Marktstrategie für deutsche Mittelständler?

Pressemitteilung

Hamburg (02.09.2013): Indien durchläuft eine Periode der wirtschaftlichen Turbulenzen. In den vergangen Monaten hat sich das Wirtschaftswachstum deutlich unter 5% verlangsamt, gleichzeitig hat die indische Rupie stark an Wert verloren.

Bildquelle: Indian Express

Die Folgen bekommen deutsche Mittelständler bereits zu spüren. Viele klagen über Auftragsrückgänge und Exporteinbrüche. Erste Pessimisten hinterfragen bereits kritisch ihr (künftiges) Engagement auf dem Subkontinent.

„Die Achterbahnfahrt der indischen Wirtschaft stellt deutsche Mittelständler vor enorme Herausforderungen“, sagt Dr. Stephan Buse, stellvertretender Leiter des Instituts für Technologie- und Innovationsmanagement (TIM) an der TU Hamburg-Harburg (TUHH). „Diese Herausforderungen können aber gemeistert werden, wenn Unternehmen sich wirklich bemühen, die Marktgegebenheiten und insbesondere die Kundenwünsche zu verstehen. Viel zu häufig glauben deutsche Manager, ihr bewährtes Geschäftsmodell und die etablierten Produkte ohne größere Anpassungen nach Indien übertragen zu können“, so Buse weiter. Seine Aussage basiert auf einer neuen Studie der TUHH, der zufolge die meisten der befragten Mittelständler auf eine auf den indischen Markt abgestimmte Produktentwicklung und sogar auf eine lokale Produktion verzichten.

Weiterlesen

Frugal Innovations for the ‘Unserved’ Customer: An Assessment of India’s Attractiveness as a Lead Market for Cost-effective Products

New publication from the Institute for Technology and Innovation Management, Hamburg University of Technology (TUHH)

Title: Frugal Innovations for the ‘Unserved’ Customer: An Assessment of India’s Attractiveness as a Lead Market for Cost-effective Products
Authored by: Rajnish Tiwari and Cornelius Herstatt
Publication date: March 2012
Download: http://www.global-innovation.net/publications/PDF/Working_Paper_69.pdf

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Abstract

This study builds on the authors‘ previous work, which had questioned the validity of certain assumptions of the lead market theory in the face of changing ground realities in a globalized world. Sustained economic growth and proven technological capabilities in some “emerging economies” like China and India call for a reassessment of the appropriateness of the “conventional wisdom” that had held true until recently. While our previous study had built a theoretical background the lead market model by introducing new elements, and doing away with certain others, with the help of two in-depth case studies, the purpose of the present study is to specifically assess India’s potential as a lead market for cost-effective frugal innovations.

The study crystallizes the inherent characteristics of frugal innovations, their development process and market success in the domestic and overseas markets by analyzing four successful product innovations from selected industries in India. The factors identified thus are then incorporated in the theoretic model to derive propositions about India’s lead market potential. Whereas affordability and economies of scale have traditionally constituted the primary concern for frugal innovations, an increasing shift towards “value proposition” is identified. Intensifying competition and growing customer aspirations are changing the nature of frugal innovations. The hitherto unserved customer demands attractive designs and modern technologies to come out of his shell of “non-consumption”. Our research confirms that frugal innovations can benefit end-consumers and firms, simultaneously. Better-designed products also have positive impact on the lead market potential, creating a virtuous cycle. The study also discovered that the increasing need for sophistication coupled with continued cost pressures is shifting the product development processes into the domain of “open global innovation”, which also helps reduce the negative country-of-origin effects faced by developing countries. The research would have implications for location decisions in setting up global innovation/R&D activities.

Keywords: Lead Markets; Frugal Innovations; India; Bottom of the Pyramid; Global Innovation; Open Innovation; Emerging Economies.

“India – A Lead Market for Frugal Innovations? Extending the Lead Market Theory to Emerging Economies”

The Institute for Technology and Innovation Management at Hamburg University of Technology (TUHH) publishes a new working paper on the topic: “India – A Lead Market for Frugal Innovations? Extending the Lead Market Theory to Emerging Economies“. The paper is authored by Rajnish Tiwari and Cornelius Herstatt (Working Paper 67, January 27th, 2012).

Abstract
India has emerged as a vibrant and versatile source for cost effective, “disruptive innovations” of various varieties. Price-sensitive consumers in a large and growing market keep inducing firms to apply “frugal engineering” for creating affordable products and services without compromising excessively on quality. Because, as The Economist asserts: “Frugal does not mean second-rate”. Such innovations are characterized by high affordability, robustness, and “good enough” quality in a volume-driven market. Resource constraints motivate firms and entrepreneurs to think out-of-the-box. The trick lies in creating solutions that are able to circumvent given environmental constraints in a cost effective way. India’s large and enormously young population faced with limited budgets, but well-endowed with high aspirations, provides an ideal experiment ground for many firms. Solutions created for the Indian market are often suitable for other developing countries in Asia, Africa and Latin America that frequently face similar socio-economic conditions. In some instances they succeed even in developed country markets by enabling significant cost reductions. This emergence as a hub for “frugal innovations” possibly suggests a “lead market” role for India.
On the other hand, lead markets, as understood today, are characterized by high per capita income, great customer sophistication and high quality infrastructure. Such assumptions imply that lead markets, almost by default, can only exist in economically developed countries because only they can finance the development effort. Using two anchor-cases of product innovations aimed at price-sensitive segments in India we generate preliminary evidence to challenge some of the core assumptions of the “lead market” theory and propose that lead markets can emerge in developing countries too because market attractiveness (e.g. volume of demand, export possibilities) and technological capabilities are able to offset many other deficiencies. The supposed absence of customer sophistication is channelized into a challenge for supplier-side sophistication to design cost effective, “good enough” solutions (“low-cost, thin-margin”) that can meet the aspirations of consumers in a highly competitive market. In order to master this challenge companies need access to a competent and sufficiently large technical base with first-hand knowledge of the ground situation of targeted customer groups (“social capital”).
Keywords: Lead Markets; India; Frugal Innovations; Frugal Engineering; Disruptive Innovations; National Innovation System; Sectoral Innovation System.

Israel asks India to help in reducing poverty in Middle East

From: The Economic Times, 8th Sept. 2011:

JERUSALEM: Acknowledging India’s growing status as a regional economic power, Israel’s President Shimon Peres has asked New Delhi to use its strength in solving the problem of poverty in the Middle East.

Israeli President also asked India to „help the Arab states in addressing their developmental challenges“, sources here told PTI.

Continue reading the article at the Economic Times….