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HOW IS DISRUPTING
ITSELF
TEAM 5:
LOIZOU NICHOLAS
MUCHINEUTA GUY
STYLIANOU CHRISTIANA
HOVHANISSIAN GARRY
by Jeffrey R. Immlet, Vijay Govindarajan and Chris Trimble
1
PROFILE American multinational, high-tech corporation
Founded by Thomas Edison, Charles A. Coffin, Elihu Thomson,
Edwin J. Houston (1892 )
CEO: Jeffrey Immlet
Mission: to usher in the next industrial era and to build, move,
power, and cure the world - Imagination at work
2
Globalization – Localization strategies
Companies develop great products at home and then distribute them worldwide with some adaptions to
local conditions
Centralized, product focused structures and practices
Historically used by GE to achieve 15-20% growth in emerging markets
In a global market a product or service is more likely to succeed when it is customized for the local
community or culture in which it is sold
GL CALIZATION
4
Strategy of innovating products in developing markets and then distributing these innovations in
developed markets
Decentralized, local market focused
Many companies are making products in developing countries like China and India and then distributing
them globally
REVERSE
INNOVATION
5
https://www.youtube.com/watch?v=menxnX1E4XE
Once products have proven themselves in emerging markets, they must be taken global, which mayinvolve:
pioneering radically new applications
establishing lower price points
using the innovations to cannibalize the sales of higher margin products in rich countries
REVERSE6
INNOVATION
Developed countries:
PERFORMANCE followed by features
GE shifts its focus from traditional rivals to emerging giants:
FROM GL CALIZATION TO
REVERSE
INNOVATION
Emerging Giants: Mindray, Suzlon,
Goldwind & Haier Traditional Rivals: Siemens, Philips, Rolls-Royce
Developing countries:
PRICE followed by portability and ease to use
8
1. Emerging economies will largely evolve in the same way that wealthy economies did
2. Products that address developing countries’ special needs can’t be sold in developed countries
because they are not good enough to compete there
TWO MYTHS MUST BE SHATTERED ABOUT
REVERSE
9
INNOVATION
WHY DID ADOPT
Higher growth opportunities in emerging countries
• Higher population
Emerging markets are becoming centers of innovation in several fields:
• Low-cost health care devices
• Water desalination
• Solar and wind power
• Batteries
Helped GE to prevent emerging international companies from developing and exporting technology and disrupting
GE’s domestic marketREVERSE
10
INNOVATION
HOW DID ADOPT
Assessing the size of the opportunity
Encouraging teams/departments to align the corporation’s strategy
Developing a new organizational model by:
• Learning from other companies’ experiences
• Finding an internal group that can manage overcoming barriers and achieving success
REVERSE11
INNOVATION
LOCAL GROWTH TEAM (LGT) MODEL
CORE PRINCIPLES:
1. Shift power to where the growth is
2. Build new offerings from the ground up
3. Build LGTs from the ground up, like new companies
4. Customize objectives, targets and metrics
5. Have the LGT report to someone high in the organization
12
CONCLUSIONS (1)
Nowadays GE has a dozen local growth teams in China and India
The two models need to do more that coexist, they need to cooperate
If GE's businesses are about to survive and prosper in the next decade,
they should become as adept at reverse innovation as they are at
glocalisation
13
Investment on R&D is crucial for the innovation and radical differentiation
No change = A company is not going to survive
This article is related with the “Sustainable Innovation” concept we learned (Eco-imagination)
CONCLUSIONS (2)
REVERSE INNOVATION ISN’T OPTIONAL IT’S OXYGEN!!14