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Innovating low‐cost business models

Innovating low‐cost business models Purpose – The authors warn of an emerging competitive crisis. Multinationals are disrupting competitors and pioneering new price points and applications in the developed world with low‐cost offerings created for rapidly developing economies. This paper aims to address this issue. Design/methodology/approach – The paper explains how smart low‐cost players invest in true innovation targeted at the large, low‐income segments of the population. Findings – The paper charts a process for implementing low‐cost innovation. Practical implications – Corporate leaders too often underestimate the power of low‐cost models to affect their business and wrongly focus their innovation on new products that are more sophisticated, and, thus, more expensive than the models they replace. Originality/value – A low‐cost innovation might cannibalize some of your current profit, but, most likely, it will also expand your market scope in a significant way. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategy & Leadership Emerald Publishing

Innovating low‐cost business models

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References (1)

Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1087-8572
DOI
10.1108/10878571111114464
Publisher site
See Article on Publisher Site

Abstract

Purpose – The authors warn of an emerging competitive crisis. Multinationals are disrupting competitors and pioneering new price points and applications in the developed world with low‐cost offerings created for rapidly developing economies. This paper aims to address this issue. Design/methodology/approach – The paper explains how smart low‐cost players invest in true innovation targeted at the large, low‐income segments of the population. Findings – The paper charts a process for implementing low‐cost innovation. Practical implications – Corporate leaders too often underestimate the power of low‐cost models to affect their business and wrongly focus their innovation on new products that are more sophisticated, and, thus, more expensive than the models they replace. Originality/value – A low‐cost innovation might cannibalize some of your current profit, but, most likely, it will also expand your market scope in a significant way.

Journal

Strategy & Leadership – Emerald Publishing

Published: Mar 8, 2011

Keywords: Innovation; Competitive advantage; Cost reduction; Value chain

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