Innovation and New Product Development Case Study

PepsiCo: Breeding Reverse Innovation in India

Abstract:
This case study primarily deals with the changing role of emerging markets from being mass consumer markets to innovation centres providing solutions to MNCs. PepsiCo, a world leader in the food and beverage industry, has built its world-class product lines for soft drinks, juices, chips and cereals through its innovation capability and acquisitions across the globe. The case study discusses the innovative efforts of PepsiCo in the emerging markets for its sustainable global growth. PepsiCo, which earlier offered its global products in the third world countries, started offering products as per local market requirements to capture higher market share in these countries. Pursuing this idea, it launched products such as Kurkure, Aliva and Nimbooz in India, creating distinctive categories and achieving huge success. After tasting success with these brands in India, PepsiCo plans to launch them in other countries reversing its earlier process of innovation. However, the question that remains to be answered is whether such reverse innovations would be accepted in the developed countries and will benefit PepsiCo in the long-run. The case study also delves into the challenges that the company may face in adopting reverse innovations in developed countries.

Pedagogical Objectives:

• To understand the changing role of emerging economies as drivers of innovation for MNCs and discuss the emerging concept of reverse innovation and innovation strategies of MNCs
• To understand the expansion of PepsiCo’s product profile over the decades and the way R&D has been organised and reorganised and how the organisation structure has been adapted
• To discuss about PepsiCo’s reverse innovation and analyse how India became an innovation hub.

Keywords : Innovation, Reverse Innovation, Innovation in Emerging Markets, PepsiCo, PepsiCo in India, Indira Nooyi, PepsiCo`s Organization Structure, R&D, Non-Corbonated Beverages, Brands, Kurkure, Aliva, Nimbooz, Vijay Govindarajan, Globalization, Growth Strategy