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Locus of decision and implementation in frugal product innovation : Evidence from a multiple case study in Western MNEs

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abstract Recently, the rise of frugal innovations in emerging markets has attracted the attention of both academics and practitioners. Frugal innovations are good-enough products which meet the basic requirements of resource-constrained people in emerging markets. Prior research has focused on the implications that addressing resource-constrained people in emerging markets has on the business models and product strategies of Western multinational enterprises (MNEs). Yet, little attention has been paid to how Western MNEs make decisions about how and where to develop these frugal product innovations. This paper explores whether and how Western MNEs organize their decision and development processes. Based on a multiple case study of six Western MNEs from the medical equipment industry, we find that the locus (i.e., at the R&D headquarters or at a local R&D unit) of where the decision about the frugal product strategy is made as well as the locus of product development depends on the degree to which the frugal product involves new technology development. The paper is useful for R&D managers in Western MNEs for the question how frugal innovation and underlying decision and development processes can be organized.
   
type conference paper (English)
   
keywords frugal innovation, emerging markets, MNE
   
name of conference The R&D Management Conference 2012 (Grenoble)
date of conference 23-5-2012
title of proceedings Creating & Capturing Value through R&D Management and Innovation
publisher R&D Management (Malden USA)
ISBN 978-0-9559367-4-6
review blind review
   
profile area SoM - Business Innovation
citation Zeschky, M., Widenmayer, B., & Gassmann, O. (2012). Locus of decision and implementation in frugal product innovation: Evidence from a multiple case study in Western MNEs. In Creating & Capturing Value through R&D Management and Innovation. Malden USA: R&D Management. - ISBN 978-0-9559367-4-6.