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Innovating low‐cost business models

Nicolas Kachaner (Senior partner and managing director in the Paris office of The Boston Consulting Group (kachaner.nicolas@bcg.com))
Zhenya Lindgardt (Partner and managing director in the firm's New York office (lindgardt.zhenya@bcg.com))
David Michael (Senior partner and managing director in BCG's Beijing office (michael.david@bcg.com).)

Strategy & Leadership

ISSN: 1087-8572

Article publication date: 8 March 2011

9961

Abstract

Purpose

The authors warn of an emerging competitive crisis. Multinationals are disrupting competitors and pioneering new price points and applications in the developed world with low‐cost offerings created for rapidly developing economies. This paper aims to address this issue.

Design/methodology/approach

The paper explains how smart low‐cost players invest in true innovation targeted at the large, low‐income segments of the population.

Findings

The paper charts a process for implementing low‐cost innovation.

Practical implications

Corporate leaders too often underestimate the power of low‐cost models to affect their business and wrongly focus their innovation on new products that are more sophisticated, and, thus, more expensive than the models they replace.

Originality/value

A low‐cost innovation might cannibalize some of your current profit, but, most likely, it will also expand your market scope in a significant way.

Keywords

Citation

Kachaner, N., Lindgardt, Z. and Michael, D. (2011), "Innovating low‐cost business models", Strategy & Leadership, Vol. 39 No. 2, pp. 43-48. https://doi.org/10.1108/10878571111114464

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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