From Frugal To Reverse Innovation: Is The Great Leap Possible? An Analysis of Diffusion Patterns of Frugal Innovations

Abstract

The recent financial crises, the emergence of Base of the Pyramid markets and the growing importance of the developing economies has brought the no-frills structure of frugal innovations into the limelight. The purpose of this study is to explore this topic and answer the question: Is the great leap from frugal to reverse innovation possible? The study also sheds light on the diffusion patterns of frugal innovations. Employing a multiple case study design, a total of 25 cases of frugal products and services were investigated and their diffusion patterns were analysed under the already existing classifications of local, proximity, distant and reverse innovation. Findings show that the leap from frugal to reverse innovation requires extra challenges to be encountered. Western MNCs, in comparison with local companies, are relatively successful in extending their innovations into reverse and distant diffusions. The research has revealed that there exists need of alliances and collaborations between local players and Western MNCs to make the great leap from fugal to reverse innovation possible. Moreover, for deeper understanding, researchers may employ a higher number of cases to further refine knowledge on the topic.