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Learning from Asian Innovation

Learning from Asian Innovation

The difference in culture between Asia and the West extends not only into daily life and familial relationships, but also in how innovation is approached.  In fact, a recent study shows four main components that Asian businesses take when innovating new technology and products:

  • Are the products suitable? Do they fit the customer’s needs and budgets?
  • Are the companies producing the innovation willing, able, and ready to let go of old designs and images in their line of business?
  • Does the business structure promote and expect change? Furthermore, are business leaders tolerant of the certainty of unpredictability?
  • Can young Asian businesses catch up with global leaders and are their organizations flexible and cognizant of their product market?

 

The West, and especially the United States, encourages innovation, creativity, and new ideas.  Generally, improvements and innovations are made to existing products.  When entering a new market, companies will often try to export their products to customers who have similar needs and budgets comparable to the home market.

 

Companies in Asia take a different approach, entirely.  First, they will evaluate the needs of a market and then identify an opportunity for development.  Typically, these market needs are met by modifying products that already exist, while maintaining the wants, needs, and price point that customers have asked for.  Often, if not always, Asian companies offer these products at a lower price and are able to reach different market segments than the West.  By focusing on markets that will buy products, but at a lower price, Asian companies are providing a valuable service based on an acute understanding of a rural (in many cases) markets needs and desires.

 

Since Western companies are often not able to compete based on value, brands need to be strong and reliable.  This means that products must hit store shelves perfect.  Customers are loyal to brands more than price but brands must return this loyalty by producing top-notch products that are reliable and long lasting.  On the other side of the equation, big name brands are able to take more risk and innovations on newly launched products – as long as the new product is offered at a competitive price point.

 

Asian companies are great at determining what products are making a significant impact and then developing their own version of those products, and offering them at a lower price.  Companies save money since they don’t have to conduct their own market research because it’s already been done for them.  A great example of this is Apple, a company that offers one type of phone and Samsung, a company that offers many different types and versions of phones.  Samsung also launches several new products each year while offering different markets what they desire.  Western businesses spend time, money, and planning to launch one or two big products per year while Asian companies tends to launch multiple products over the course of a year.

 

Western companies should find practices that can be transferred or inspire their own creativity – especially when thinking about markets and product launches.  Increasingly, companies are competitive in the same market but finding different approaches to success in those markets is fundamental.

 

 

 

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