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President Obama spoke to the members of the US Chamber of Commerce and spelt out a bit more of what innovation really means to business in America. Obama did this by contrasting the need to make stuff that sells around the world to just trying to get Americans to buy more by borrowing more.
Making things that sell in other countries is innovation. It does help to be able to sell the same identical product everywhere because you can build larger factories, reduce overhead and cost but there's a problem – the market you are trying to reach may not like what you offer. So you need to modify your offering for that market. As earlier mentioned in this blog, companies like GE are doing exactly that – by localizing management decision processes closer to the market so that product designers are not hung up with issues of product platforms, false synergies etc.
Let me illustrate with a simple plastic mold you have created for the needs of one market. Now in another market your market research suggests a slightly different mold technically but which might mean a lot to the market requirements. The more say your home factory,supply chain and finance folks have on this – you'll find yourself trying to save a 100K on a new mold and potentially sacrificing your market orientation. The moment you make the decision locally and look more outward to the market the savings in the inappropriate mold will not look that great.And the chances to succeed in the market will zoom !
In other words look at the market first.