Published on Harvard Business Review, April 16, 2012, by Vijay Govindarajan.
If you shaved today, either in the U.S. or in India, you probably used a Gillette razor. Gillette (now a brand of P&G), reportedly has had a U.S. market share of more than 80%, with Schick a distant second. Even more remarkably, they achieved this without resorting to price competition. The blade cartridges for its latest-and-greatest razor, the top-selling Fusion ProGlide, retail for around $4 each, leaving Gillette with what must be incredibly lucrative gross margins.
But that is not the story in developing markets, where these top-of-the-line products don't fare nearly as well. So how is it that Gillette has over 50% market share in India — the world's largest shaving blade market by volume? And with a product that costs less than 3% of the Fusion ProGlide? This is an excellent story of reverse innovation in action...but the story has only just begun.
Vijay Govindarajan (VG)
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Reverse Innovation: Create Far From Home, Win Everywhere (Full Chapter)