Are there any examples of foreign companies developing successful new strategies to remain competitive in the China market?
GE CEO Jeff Immelt wrote an article recently in the Harvard Business Review about GE’s experience in China producing a low-end ultrasound scanner for hospitals in the countryside, a process he referred to as reverse innovation. The typical ultrasound scanner in the United States cost $150,000, so GE could only sell the equipment to tier-one hospitals in Beijing and Shanghai and other major cities. There was a big market of consumers who could not afford this. So GE established a research center in Wuxi with the goal of researching and developing a lower-end portable scanner hooked up with a laptop. They created something that is completely new, extremely cheap and accessible. That approach is completely different from the company’s conventional ultrasound scanner, which emphasizes sensitivity and image clarity. Now this product, which was developed for the Chinese countryside, has become a sensation in the U.S. market. It’s very portable, so it’s become popular with doctors working in
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