Reverse innovation: a conceptual framework

Abstract

Reverse innovation (RI) has emerged as a new growth strategy for MNCs to innovate in emerging markets and then to further exploit the profit potential of such innovations by subsequently introducing them not only in other similar markets but also in developed markets, thereby delivering MNCs a sustainable growth globally. In this study, we propose an overarching conceptual framework to describe factors that contribute to the feasibility of RIs. Using grounded theory with a triangulation approach, we define RI as a multidimensional construct, identify the antecedents of RI, discuss the outcomes, and propose a set of moderating variables contributing to the success of RIs. We also present a set of research propositions with their relative effects on the relationships proposed in the conceptual framework. Additionally, we provide future research directions and discuss theoretical contributions along with managerial implications to realize the strategic goals of RI.

New perspectives on business model innovations in emerging markets

“…A similar framework posited by Suresh Malodia, Shaphali Gupta, and Anand Jaiswal complements this framework proposed by Giannetta et al In Malodia et al's (2019) "Reverse Innovation: A Conceptual Framework," the authors conceptualize reverse innovation less as an outcome and more as a firm-level strategy which, in the authors' estimation, is essential to global sustainable growth. The key managerial challenge addressed here is the fact that still few multinational companies (MNCs) are becoming involved in the reverse innovation process.…”

“…Gupta (2019), acknowledging that the conceptual framework of GRIs lacks empirical testing, writes, "Future research can develop a multidimensional scale for GRI and can empirically test and validate the proposed framework and measure the magnitudes of the moderators." Further, Malodia et al (2019) also acknowledge the importance of subjecting their proposed framework to empirical validation.…”

“…In effect, Malodia et al (2019) resituate the reverse innovation construct from being a possible outcome of product introductions in emerging markets to being a strategic process that firms can utilize to exploit the likelihood that a given innovation will trickle up to developed markets, and to then optimize the resulting competitive gains. Given recent marketplace evidence, it is abundantly clear that scaling down developed market products does not reliably result in successful carryover to emerging markets.…”

“…As is clear from the research of Gupta (2019), Giannetta and Rubera (2019), Malodia et al (2019), and Badir et al (2019), understanding the unique properties of EMIs, including specific types of EMIS (grassroots innovation, employeelevel open innovation etc. ), is critical for retooling conventional knowledge on innovation in order to optimize business activities in emerging markets.…”

Review of the reverse innovation series in globalization and health – where are we and what else is needed?

“…In the industrial strategy literature, reverse innovation, as a terminology, describes an intra-organizational approach to ideate technologies in contexts with favourable institutional voids in order to create new markets back home [21]. However, the term has been adopted wholesale, and quite uncritically, from this literature.…”