Marco Zeschky

Bio: Marco Zeschky is an academic researcher from University of St. Gallen. The author has contributed to research in topics: Frugal innovation & Business model. The author has an hindex of 11, co-authored 22 publications receiving 1234 citations.

Frugal Innovation in Emerging Markets

Abstract: OVERVIEW:The quality and number of innovations developed by multinational companies from emerging countries is increasing dramatically. In particular, frugal innovations—“good-enough,” affordable products that meet the needs of resource-constrained consumers—have created tremendous demand in emerging markets. While the development of such products has largely been the domain of local corporations in emerging countries, Western corporations have recently started to engage in frugal innovation as well. This is a difficult task for Western firms, however, because their business models and organizational structures are traditionally designed for the development of advanced products for the affluent few at the top of the economic pyramid. Using Swiss weighing-instrument manufacturer Mettler Toledo as a case example, this article suggests that frugal innovations are largely developed by local R&D subsidiaries of Western firms in emerging countries. A substantial degree of autonomy for those local R&D subsidiari...

From Cost to Frugal and Reverse Innovation: Mapping the Field and Implications for Global Competitiveness

Abstract: Product and service innovations aimed at resource-constrained customers in emerging markets have recently attracted much research and management attention. Despite the prominence of this topic, however, there are some misconceptions around the different innovation types in this domain that may limit managers' ability to derive informed implications for strategy and operations. This article analyzes the different types of resource-constrained innovation-cost, good-enough, frugal, and reverse innovation-conceptualizes the distinctions between them, and discusses the implications for strategy providing a framework for managers to systematically analyze their own approaches to resource-constrained innovation and craft proper development processes. By highlighting the differences between the various types of resourceconstrained innovation, this article also provides the conceptual grounds for further systematic research.

From Cost to Frugal and Reverse Innovation: Mapping the Field and Implications for Global Competitiveness: Understanding the Different Types of Resource-Constrained Innovation Can Help Companies Analyze Their Approaches to Resource-Constrained Innovation

Abstract: The economic rise of emerging markets, especially in China and India, has created a new market segment, variously referred to as the middle market (Govindarajan 2012), the low-income market (Hart and Christensen 2002; Sanchez and Ricart 2010), and sometimes the good-enough market (Gadiesh, Leung, and Vestring 2007). The fierce competition among firms fighting for the middle-class consumers emerging in these areas has made this market segment the "next global battleground" (Gadiesh, Leung, and Vestring 2007, 82). However, despite increasing incomes, emerging middleclass consumers still have little excess income compared to Western consumers and often suffer from additional constraints, such as poor public and private infrastructure or poor service availability. As a result, firms have started to develop market-specific solutions that are characterized by high value and low costs. These solutions, which have attracted much attention from both managers and researchers, have been captured under the terms cost innovation (Williamson 2010), good-enough innovation (Gadiesh, Leung, and Vestring 2007; Hang, Chen, and Subramian 2010), frugal innovation (Zeschky, Widenmayer, and Gassmann 2011; Economist 2010), resource-constraint innovation (Ray and Ray 2010), trickle-up innovation (Reena 2009), and reverse innovation (Immelt, Govindarajan, and Trimble 2009; Trimble 2012; Govindarajan 2012). The innovation types described by these terms are structurally different from each other with respect to their original motivation, value proposition, and value creation mechanisms. For example, while some solutions may emerge from the redesign of an existing product to make it drastically cheaper, others may be entirely new and may create new markets, as well. However, researchers and practitioners alike often use these terms interchangeably, obscuring the important strategic implications of the differences among them. Based on a survey of the literature and a series of case studies, we argue that there are three distinct types of resource-constrained innovation for emerging markets: cost, good-enough, and frugal innovation. These three types differ from each other with respect to their technology and market novelty and therefore significantly affect how firms approach, develop, and position solutions. Therefore, a sound conceptualization of the different innovation types is essential for management practice and research to move forward in a systematic and fruitful manner. Methodology We started this study by analyzing extant literature on innovation for resource-constrained consumers in emerging markets. Our initial aim was to understand the commonalities and differences between the most frequently used terms--cost, good-enough, frugal, and reverse innovation. We then began to construct a database of cases of resource-constrained innovations. The database now includes 85 cases collected between 2009 and 2013; while some cases were based on data gathered through personal interviews, some relied on extensive secondary data analysis. While all of the cases in our database were characterized by drastically lower prices or operating costs compared to Western products, we employed the Ansoff matrix (Ansoff 1965) as an analytical framework to classify the cases. In the Ansoff matrix, innovations are distinguished according to their technical and market novelty; the matrix thus classifies innovations by whether they are market extensions based on existing technologies, original product development activities for existing markets, or newly developed products for entirely new markets. For this article, we have selected 13 cases that are most illustrative to substantiate our conceptualization. Four of these cases rely on interviews with managers (including two cases representing good-enough innovations and two representing frugal innovations). For the other nine cases (seven cost innovations, one good-enough, and one frugal innovation), we used data gathered from well-respected resources. …

Opening up the Solution Space: The Role of Analogical Thinking for Breakthrough Product Innovation

Abstract: The purpose of this paper is to investigate the approach of analogical thinking for product innovation. We collected data of projects from four engineering firms where analogical thinking was successfully applied for the development of breakthrough innovations. Results show that abstracting the problem by in-depth technical and contextual analysis is pivotal when searching for analogical solutions. Furthermore, chances for the identification of highly novel analogous solutions are increased if the problem is abstracted to the level of its structural similarities to other settings. We also found that the identification of structural similarities is supported when firms not only rely on the cognitive abilities of the individual but employ an active search based on abstract search terms. Based on these insights, we propose a process model for the develop-ment of product innovations by means of analogical thinking.

Sustainability‐oriented Innovation: A Systematic Review

Abstract: This article is intended as a contribution to the ongoing conceptual development of Sustainability-Oriented Innovation (SOI) and provides initial guidance on becoming and being sustainable. We organize and integrate the diverse body of empirical literature relating to SOI and, in doing so, develop a synthesized conceptual framework onto which SOI practices and processes can be mapped. SOI involves making intentional changes to an organization’s philosophy and values, as well as to its products, processes or practices to serve the specific purpose of creating and realising social and environmental value in addition to economic returns. A critical reading of previous literature relating to environmental management and sustainability reveals how little attention has been paid to SOI and what exists is only partial. In a review of 100 scholarly articles and 27 grey sources drawn from the period of the three Earth Summits (1992, 2002 and 2012), we address four specific deficiencies that have given rise to these limitations: the meaning of SOI, how it has been conceptualised, its treatment as a dichotomous phenomenon and a general failure to reflect more contemporary practices. We adopt a framework synthesis approach involving first constructing an initial architecture of the landscape grounded in previous studies which is subsequently iteratively tested, shaped, refined and reinforced into a model of SOI with data drawn from included studies: so advancing theoretical development in the field of SOI.

Building Inclusive Markets in Rural Bangladesh : How Intermediaries Work Institutional Voids

Abstract: Much effort goes into building markets as a tool for economic and social development, often overlooking that in too many places social exclusion and poverty prevent many, especially women, from participating in and accessing markets. Building on data from rural Bangladesh and analyzing the work of a prominent intermediary organization, we uncover institutional voids as the source of market exclusion and identify two sets of activities – redefining market architecture and legitimating new actors – as critical for building ‘inclusive' markets. We expose voids as ‘analytical spaces' and illustrate how they result from conflict and contradiction among institutional ‘bits and pieces' from local political, community, and religious spheres. Our findings put forward a perspective on market building that highlights the ‘on the ground' dynamics and attends to the ‘institutions at play', to their consequences, and to a more diverse set of ‘inhabitants' of institutions.

Structural Differentiation and Ambidexterity: The Mediating Role of Integration Mechanisms

Abstract: textPrior studies have emphasized that structural attributes are crucial to simultaneously pursuing exploration and exploitation, yet our understanding of antecedents of ambidexterity is still limited. Structural differentiation can help ambidextrous organizations to maintain multiple inconsistent and conflicting demands; however, differentiated exploratory and exploitative activities need to mobilized, coordinated, integrated, and applied. Based on this idea, we delineate formal and informal senior team integration mechanisms (i.e. contingency rewards and social integration) and formal and informal organizational integration mechanisms (i.e. cross-functional interfaces and connectedness) and examine how they mediate the relationship between structural differentiation and ambidexterity. Overall, our findings suggest that the previously asserted direct effect of structural differentiation on ambidexterity operates through informal senior team (i.e. senior team social integration) and formal organizational (i.e. cross-functional interfaces) integration mechanisms. Through this richer explanation and empirical assessment, we contribute to a greater clarity and better understanding of how organizations may effectively pursue exploration and exploitation simultaneously to achieve ambidexterity.