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Developing frugal product innovation capabilities in the healthcare industry : The role of emerging countries

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abstract In the last few years, emerging countries have become hot spots for the development of frugal innovations – products that are stripped down to their bare essentials offering the resource-constrained customer basic functionalities at affordable costs. The rising acceptance of frugal innovations in emerging as well as developed markets have forced Western MNCs, whose established business models and structures are typically optimized for high technology products, to engage in frugal innovations. Based on the insights from three in depth case studies from the healthcare industry, we show how Western MNCs develop frugal product innovation capabilities. We find that frugal product innovation capabilities are effectively built in the resource-constrained environments of emerging markets. Furthermore, we find that local R&D staff is needed to sense latent local market requirements. The ability to translate these requirements into frugal products depends on the access of the technological knowledge base and the technological training of the local R&D staff.
   
type conference paper (English)
   
keywords Frugal Innovation, Emerging Countries; Western MNCs; Capabilities; Global R&D, New Product Development
   
name of conference The R&D Management Conference 2011 (Norrköping, Sweden)
date of conference 28-6-2011
title of proceedings Sustainability and Innovation
review internal review
   
citation Zeschky, M., Widenmayer, B., & Gassmann, O. (2011). Developing frugal product innovation capabilities in the healthcare industry: The role of emerging countries. In Sustainability and Innovation.