A new paper by Stephan Buse and Rajnish Tiwari of the Center for Frugal Innovation at the Hamburg University of Technology that examines product and market cultivation strategies employed by German mid-sized firms (“Mittelstand”) in the BRIC nations, especially China and India. The paper was preseneted at the XXV ISPIM Conference – Innovation for Sustainable Economy & Society, Dublin, Ireland on 8-11 June 2014.
Aim of this study is to analyse product-related innovation strategies of German Hidden Champions (globally leading, mid-sized companies) in the BRIC countries, especially in the fast growing and still unsaturated markets of China and India. With the help of an empirical survey we discover that the BRIC markets are perceived to be of high and growing strategic importance. An overwhelming majority of the surveyed firms market their global, adapted, or exclusively developed products in those countries. The survey reveals that companies very often target high-end, premium segments with global products developed at the headquarters. With such a strong focus on affluent customers Hidden Champions run the risk of ignoring very large customers groups that seek affordable excellence in products (“frugal innovation”).