Low-cost Indian tractors are being repackaged for the niche agricultural market overseas
Goods developed as inexpensive models to meet the needs of developing nations have been repackaged as low-cost innovative products for overseas buyers. This innovation by the US subsidiary of domestic auto company Mahindra & Mahindra has now become a case study for management students in the US.
Called ‘reverse innovation’, tractor maker Mahindra USA (MUSA) has been recognised for being successful in tapping the agricultural niche of hobby farmers, landscapers and building contractors instead of competing with big, established brands overseas.
Reverse innovation refers broadly to the process whereby it is an innovation seen first in the developing world before spreading to the industrialised world.
MUSA entered the US tractor market in 1994 and proceeded to establish itself as a successful niche player. Rather than trying to develop a product that could compete with brands like John Deere, it targeted a smaller niche market, coupled this strategy with personalised service, building close relationships with dealers, customers and the community at large.
MUSA was recently featured by Vijay Govindrajan, Professor at the Tuck School of Business at Dartmouth College, USA in his book, Reverse Innovation: Create Far from Home, Win Everywhere (jointly written with Chris Trimble, a well-known innovation consultant and also on the faculty at Tuck.).