From outsourcing to globalization - 2011 and beyond | Outsource Portfolio

 
1. India’s Hindustan Lever invented water purifier for India’s rural population
 
2. Godrej’s refrigerator for $60 targeting people living in village. The low-cost refrigerator keeps the water and vegetables cool but does not produce ice which is not important for the rural population.
 
3. Airtel created a business model to produce cheap wireless minutes for the growing Indian population and became the largest telecoms provider in India.
 
4. China’s Haier invented washing machine for rural customers that is capable of washing both cloths and potatoes. Haier also invented rodent-proof refrigerator that keeps the food rodent free for their rural customers.
 
5. China’s Lenovo created Chinese language card for its products and services.
 
6. Joyoung Co. invented Soybean milk processor that was a big hit among the Chinese consumers.
 

All of the above examples shows that the Indian and Chinese companies have started to innovate new products and services targeting low-end customers.

In the early 90’s, American companies started outsourcing their back office work to India and their manufacturing work to China, considering the two countries as a source for cheap labor. As the economy of these two countries started growing, American companies saw the opportunity and started offering their products and services to its wealthier consumers. Initially the products and services were repackaged with reduced features, after seeing the success of Indian and Chinese companies in targeting consumers in middle and lower income levels. Not wanting to be left out, American companies started offering their products and services targeting middle and low-income consumers. Following are some examples:

 
1. John Deere India started manufacturing tractors in India for Indian farmers which feature a complete redesign of their American products, services, and technology.
 
2. Indian’s food habits are different from western countries, each religion and culture has its unique flavor and cooking style. So the food has to be customized for each regions of India. American food companies McDonald’s corporation, Domino’s Pizza, and KFC created research and development center to innovate food products and services for the Indian customer’s taste-buds.
 
3. GE Healthcare invented a portable ultrasound machine for rural China population.