Managing resource-constrained innovation in emerging markets: Perspectives from a business model

Abstract

This study examines the organization of resource-constrained innovation from a business model perspective. Using a multiple case study design, we demonstrate that the ability to organize resource-constrained innovation is built on cost, good-enough, frugal, and reverse innovation capabilities. Cost innovation does not always lead to a new product, rather it is a way to reduce operational costs through the value creation activities of a business model to achieve resource-constrained innovation. Good-enough innovations are developed through existing platform reengineering and localization through value creation activities. We demonstrate that frugal innovations are developed based on new product architectures and applications that can create completely new market segments to compete against non-consumption. Reverse innovations refer to frugal innovations that are characterized by higher market novelty because they create completely new market segments in developed and developing markets for value capture.