Impact of Reverse Innovation on Global Competitiveness of MNCs: The Moderating Role of Understanding Latent Customer Needs in Developed Markets

Abstract

Reverse innovation (RI) is the adoption of an invention in an impoverished economy proceeding to wealthier countries. Reverse innovation has also become a brand-new growth strategy for Multinational Corporations (MNCs) to drive innovation in developing markets and further utilize the potential profit of certain developments by consequently presenting innovation not only in other market segments, but also in developed economies, providing MNCs with global sustained development. Reverse innovation studies may be conducted by extending previous ideas on innovation, internationalization, and MNC management. Thus, this study analyzes the impact of Reverse Innovation on MNCs’ global competitiveness. This study is unique because it attempts to study the moderating role of understanding latent customer needs in developed markets. Smart PLS was utilized to analyze the impact of Reverse Innovation. The database utilized in this analysis is primarily focused on the Siemens market with interviews and information provided by business customers because of their demonstrated success as well as high level of adoption in emerging economies. The PLS-SEM technique was chosen as the primary analysis tool because it is a variance-based technique. Their analysis found that performance in emerging markets requires end-to-end localization, core value discovery, and a balanced portfolio combination of both types of innovation.