Saturday, November 12, 2011

Innovation Strategies of Local Market Leaders in Emerging Markets

What role does innovation play in the leadership positions attained by local firms in emerging markets? What innovation strategies do these firms follow?

In a paper just published in the ASCI Journal of Management, Srivardhini K. Jha and I take advantage of a natural experiment – the deregulation of the Indian economy – to investigate these questions.

We identify and compare the innovation strategies of five local market leaders in India – Bajaj Auto, Biocon, Pantaloon, Tata Motors, and Titan Industries - on dimensions related to exploration and exploitation, internal and external sources, technology-push and market-pull and product and process innovation.

This study establishes that innovation plays a key role in the leadership position attained by local leaders. These firms display a high degree of ambidexterity in both exploring and exploiting in parallel, an approach that is required to provide speed of response. External sources are tapped for knowledge and ideas, and this learning is integrated with internal innovation. Market exploration, particularly the development of products, services and business models that allow the companies to meet the affordability criteria of the mass market, plays an important role in the innovation strategy of these companies.

The paper is available at:

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