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Cisco Invests in
Designing for Local Markets
In today’s
business climate, it is common for technology
companies to be bullish on India, but Cisco is
taking action
by hunting for acquisition targets among Indian
companies that design new technologies
specifically for developing countries. Vital Wave
Consulting closely follows the evolution of
multinational corporate activity in developing
countries and it is clear that after decades of outsourcing to reduce
labor costs, companies are now adding the creation
of learning and innovation centers to their
emerging-market strategies.
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Outsourcing research and development (R&D) is
not new to corporations; around 300 multinationals,
including the majority of leading IT and
telecommunications companies, have R&D centers in
China. But creating innovation centers in developing
countries for the purpose of designing products
explicitly for those markets is still an anomaly. HP
led the way with its i-Community initiative in South
Africa and India in 2000. Intel followed with its
Platform Definition Centers, and now Cisco is
following a similar strategy through acquisition.
Cisco and its predecessors have realized that a
growing consumer base in rapidly-developing
economies is evolving into a profitable market with
distinct technology needs and preferences. Companies
can no longer recycle developed-world technology in
emerging markets and hope to win a leadership
position. To be successful, products must be
developed with the needs of these markets in mind.
And to truly understand these needs, it benefits
companies to invest in on-the-ground learning
laboratories in the heart of these emerging mass
markets.
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