Wednesday, February 21, 2007

Building India into an innovation-led country

Here is something that we had discussed in the International Business Class.The case was for Singapore. But this article talks about India.

I simply love it when I read an article in the newspaper,magazine and can relate that to the concepts learnt in the class.

Research by Sumitra Dutta, the Roland Berger Professor in Business and Technology and dean of External Relations at INSEAD, shows that countries make migrations across three phases — from low-cost manufacturing to high-quality manufacturing — i n their bid to become innovative.

There is huge potential for India to follow the same path. The country has the opportunity of creating new business models, products and services for the poor not just at home, but for countries in Africa and Latin America. Often, companies go for the easier solution, that is, capturing the high-paying foreign market customer.

The winner in the current scenario could be disruptive innovation: developing low-cost products for the bottom of the pyramid. These products could be taken to the other developing economies of the world in stage two. The innovator could then bring in higher-end features in the product to enter the higher level of the domestic market and, subsequently, launch the product in global markets.

On innovations in India, the author states:

To me, Bharati Airtel is the most innovative company of our times for the way it has created a successful business model. The company has outsourced everything but its customers, thus being able to offer mobile telephony at 10 paise a minute; nowhere in the world can you get such rates.

Maruti Udyog Limited (MUL) is another great marketing innovator of our times. It launched innovative schemes to widen its market base. In September 2004, for instance, MUL launched a scheme aimed at teachers, in association with State Bank of India. Almost 10,000 teachers benefited from the scheme.


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