Thursday, October 18, 2012

Reverse Innovation Process: Procter & Gamble Case Study

I found this very interesting article about Procter and Gamble strategy in the emerging market. Procter & Gamble masters the worldwide market of shaver with its brand Gillette. Gillette products are very priy, all over the world, and they have succeeded in increasing the proposed value to customers through innovation. It is so pricy that in some French stores, those products have specific security measures to avoid robbery. 

But in a market like India, where people have low incomes, it is a challenged to propose an appropriate product to customers. India is a very interesting market as it is the biggest market in volumes of razors.  

Procter & Gamble had to apply a strategy I did not hear of, but which is very interesting: Reverse Innovation. For years, in its domestic market, Gillette did not stop innovating, proposing more and more complex products. But in India, Gillette needed to adapt to the level of development of the country.

Therefore they developed a specific product for the local market, with one single bladed, design for the specific needs of Indians. 

It is becoming more and more difficult to find revenue growth in our western countries market, and it is important to find new ways to conquer new foreign markets. This is somehow the same strategy Renault used with its Logan brand to get market shares in Eastern Europe countries.

What is also interesting in the article is that the author considers possible that Gillette may sell the products they defined for the Indian market in the US market. And hence, the reverse innovation process would be complete. I believe that sometimes, it is important that companies question their own business model, even when it is working and doing fine. Because someday, you will always find a disruptive competitors, which will be able to innovate where you simply wanted to keep revenues flows.

I believe it is interesting to read this article, and to see the whole process Procter and Gamble applied in order to get into the Indian market. It is especially interesting to see how they had a local approach, instead of simply focusing on selling their international products.