Reverse innovation

if u ask a layman abt reverse innovation he will probably say he doesnt know.
if u ask organizations they say they are concentrating &focussing on it. tats what jeffey immelt,vijay govindarajan(chief innovation consultant to General Electric) analysed and came with the view.
so wat exactly is reverse innovation. its simple .marketing ur products in developing markets rather developing it in developed nations. ur prioducts first goes to emerging markets like china,india.and moves to US and other european countries.

so GE'S JEFF.immelt and vijay govindarajan ,the man behind the reverse innovation who is associated with GE belives that this strategy will be successful.

I feel that this concept might lead to cannabilization. it will obviously reduce market share,reduce profits et al because the purchasing power of consumers in the developing markets is very less compared to developed nations.
But still why companies adopt this new strategy?
1.Buyers in poor countries demand solutions on an entirely different price-performance curve. They demand new, high-tech solutions that deliver ultra-low costs and “good enough” quality.
2.Let's look at an example of how American auto manufacturers have not done an effective job at reverse innovation and why we say that the future may well depend on reverse innovation. Companies like Ford brought their global automobile platforms into India, thereby, becoming niche players in the premium segment. After all, only 5% of the Indian population can afford a Rs10 lakh ($20,000) car!
In 2009, Tata Motors launched the Tata Nano — the Rs1 lakh ($2,000) people's car. Multinational companies have to find a 10% solution to capture the full potential in urban India and a 1% solution to capture rural India. That is to say, if a product was to sell for $100 in US, a similar solution is needed for urban India at $10 and for rural India at $1. This is because of the income gap between US and India. The per capita income in India is about $1,000, whereas per capita income in US is about $50,000. That is why one needs the Tata Nano type of solution to unlock new markets in India. The Tata Nano is targeted at the non-consumers of automobiles in India today, namely the two-wheeler population. The two-wheelers are priced at $1,500. By introducing an automobile for $2,000, Tata Motors plans to migrate the two-wheeler population into four-wheeler users. Creating new consumption requires new business models.

Tata Motors plans to introduce Tata Nano not only in other emerging markets such as Africa but also plans to bring the car into Europe and the US eventually. The biggest threat to American automobile will come from emerging market competitors like Tata.