HOW IS DISRUPTING

ITSELF

TEAM 5:

LOIZOU NICHOLAS

MUCHINEUTA GUY

STYLIANOU CHRISTIANA

HOVHANISSIAN GARRY

by Jeffrey R. Immlet, Vijay Govindarajan and Chris Trimble

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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

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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

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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

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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

Developing countries

Developed countries

Traditional path

New path

GL CALIZATIONREVERSE

7INNOVATION

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

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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

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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

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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

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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

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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

THANK YOU FOR

YOUR ATTENTION!

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