Frugal Innovation Analysis

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The present paper focuses on low cost disruptive innovation taken by China and frugal innovation efforts of India. Innovation is essential for any firm to survive in this fiercely competitive economy and emerging economies which are faced by resource constraints are using their technological investment to come up with affordable products. Once these products achieve success in emerging nations, it provides a platform for the firms to leverage their products in more developed nations, as they have gained experience in providing more value for the money. It has become essential for the already established global players to understand the mechanism of this disruptive innovation who are grabbing their market share rapidly. It could be done only…show more content…
III. Frugal innovation The term frugal innovation has its roots in the term “Frugal engineering” coined by Carlos Ghosn, chairman and CEO of Renault- Nissan Alliance, who stated it is a way of achieving more with fewer resources. (Navi Rajdou, 2012). ‘Frugal’ innovation is about creating efficient products to provide desirable user experience, at low cost by using local resources frugally, while maintaining the safety and quality standards. (Somali Chakarbarthi, 2014). There are words like Gandhian or Jugaad innovation, inclusive innovation, catalytic innovation, reverse innovation and BOP innovation used in place of frugal innovation. Although ,Jugaad innovation is different from frugal innovation in its approach and lies it focus on makeshift solutions or short term fixes and is not concerned about quality, safety and…show more content…
It also includes better products and services by remodeling of existing process and recombinative innovation (NESTA Report, July 2012). IV. China’s low cost disruptive innovation Disruptive innovation, a term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors (Clayton Christensen). The characteristic of disruptive innovation at least for the initial phase includes lower gross margins, smaller target markets and simpler products and services. Chinese are known for their low cost advantage throughout the world and is acting as a disruptor for other firms as they have changed the whole landscape of BOP market by their offerings. Earlier differentiation and focus strategies were used by the players to offer products for specialized high end segments but now even with these policies they cannot fight against cost leadership strategies of Chinese
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