Impact of Reverse Innovation on Global Competitiveness of MNCs: The Moderating Role of Understanding Latent Customer Needs in Developed Markets


  • Shweta Saxena Amity University Madhya Pradesh, Gwalior



Developed Markets, Global Strategy, Reverse Innovation (RI), Multinational Corporation (MNC), Partial Least Squares (PLS)


Reverse innovation (RI) is the adoption of an invention in an impoverished economy proceeding to wealthier countries. Reverse innovation has also become a brand-new growth strategy for Multinational Corporations (MNCs) to drive innovation in developing markets and further utilize the potential profit of certain developments by consequently presenting innovation not only in other market segments, but also in developed economies, providing MNCs with global sustained development. Reverse innovation studies may be conducted by extending previous ideas on innovation, internationalization, and MNC management. Thus, this study analyzes the impact of Reverse Innovation on MNCs’ global competitiveness. This study is unique because it attempts to study the moderating role of understanding latent customer needs in developed markets. Smart PLS was utilized to analyze the impact of Reverse Innovation. The database utilized in this analysis is primarily focused on the Siemens market with interviews and information provided by business customers because of their demonstrated success as well as high level of adoption in emerging economies. The PLS-SEM technique was chosen as the primary analysis tool because it is a variance-based technique. Their analysis found that performance in emerging markets requires end-to-end localization, core value discovery, and a balanced portfolio combination of both types of innovation.



Adomako, S., Amankwah-Amoah, J., & Frimpong, K. (2022). Human capital, reverse engineering and new venture growth: The moderating role of competitive strategy. Technovation, 114, 102520.

Chandler, G. N. (1996). Business Similarity as a Moderator of the Relationship between Pre-Ownership Experience and Venture Performance. Entrepreneurship Theory and Practice, 20(3), 51–65.

Dudaklı, N., Felekoğlu, B., & Baykasoğlu, A. (2021). Building blocks of the reverse innovation process. Innovation: The European Journal of Social Science Research, 1–28.

Genc, E., Dayan, M., & Genc, O. F. (2019). The impact of SME internationalization on innovation: The mediating role of market and entrepreneurial orientation. Industrial Marketing Management, 82, 253-264.

Golgeci, I., Assadinia, S., Kuivalainen, O., & Larimo, J. (2019). Emerging-market firms’ dynamic capabilities and international performance: The moderating role of institutional development and distance. International Business Review, 28(6), 101593

Hukkelberg, S., Keles, S., Ogden, T., & Hammerstrøm, K. T. (2019). The relation between behavioral problems and social competence: A correlational Meta-analysis. BMC Psychiatry, 19(1).

Islam, T., Islam, R., Pitafi, A. H., Xiaobei, L., Rehmani, M., Irfan, M., & Mubarak, M. (2021). The impact of corporate social responsibility on customer loyalty: The mediating role of corporate reputation, customer satisfaction, and trust. Sustainable Production and Consumption, 25, 123–135.

MacKenzie, S. B., Podsakoff, P. M., & Podsakoff, N. P. (2011). Construct measurement and validation procedures in MIS and behavioral research: Integrating new and existing techniques. MIS quarterly, 293-334.

Menguc, B., Auh, S., & Yannopoulos, P. (2014). Customer and supplier involvement in design: The moderating role of incremental and radical innovation capability. Journal of Product Innovation Management, 31(2), 313-328.

Morgan, T., Anokhin, S. A., & Wincent, J. (2019). Influence of market orientation on performance: the moderating roles of customer participation breadth and depth in new product development. Industry and Innovation, 26(9), 1103-1120.

Petzold, S., Barbat, V., Pons, F., & Zins, M. (2019). Impact of responsive and proactive market orientation on SME performance: The moderating role of economic crisis perception. Canadian Journal of Administrative Sciences, 36(4), 459–472.

Qayyum, A., Khang, D. B., & Krairit, D. (2013). An analysis of the antecedents of loyalty and the moderating role of customer demographics in an emerging mobile phone industry. International Journal of Emerging Markets, 8(4), 373-391.

Sarstedt, M., Ringle, C. M., & Hair, J. F. (2021). Partial least squares structural equation modeling. In Handbook of market research (pp. 587-632). Cham: Springer International Publishing. Sarstedt, M., Ringle, C. M., & Hair, J. F. (2021). Partial least squares structural equation modeling. In Handbook of market research (pp. 587-632). Cham: Springer International Publishing.

Schmidt, C. G., Yan, T., Wagner, S. M., & Lucianetti, L. (2022). Performance implications of knowledge inputs in inter-organisational new product development projects: the moderating roles of technology interdependence. International Journal of Production Research, 60(20), 6048-6071.

Senyard, J., Baker, T., Steffens, P., & Davidsson, P. (2014). Bricolage as a Path to Innovativeness for Resource-Constrained New Firms. Journal of Product Innovation Management, 31(2), 211–230.

Teixeira, G. F. G., & Canciglieri, O., Junior. (2019). How to make strategic planning for corporate sustainability? Journal of Cleaner Production, 230, 1421–1431.

Zeschky, M., Winterhalter, S., & Gassmann, O. (2015). From Cost to Frugal and Reverse Innovation: Mapping the Field and Implications for Global Competitiveness. Research-technology Management, 57(4), 20.