Here's a very interesting article from Business Week where C K Prahalad argues about the ingenuity of companies serving customers in developing economies and how they can eventually challenge global companies.
Here are some excerpts:
View those same streets through the eyes of C.K. Prahalad, however, and they become a beehive of entrepreneurialism and creativity. "I see the positives inside the muck," says Prahalad as he settles his stocky frame into the back of a hired Tata Indica sedan to conduct a quick tour of Bombay.
On every block he points out the intriguing enterprises tucked into the nooks and crannies. With the world's cheapest telecom rates, "all you need here is a phone and a $20 card to start a business," he explains in his measured baritone. He notices a busy closet-sized shop charging a few pennies per page to send faxes.
Street-smart innovation
Now one of the management world's most creative thinkers has an even more radical idea: He believes that the entrepreneurial ingenuity at work amid such poverty, where success depends on squeezing the most out of minimal resources to furnish quality products at rock-bottom prices, has cosmic implications for executives and consumers everywhere.
Prahalad thinks globalization also can help rein in America's soaring health-care costs. That's one reason he is studying Indian hospitals such as Narayana Hrudayalaya, founded by cardiac surgeon Dr. Devi Shetty. Some reasons for its low costs can't be easily replicated elsewhere. The land was owned by Shetty's family. The hospital's 25 foreign-trained surgeons earn half what they could in the U.S. Outsize malpractice awards are rare in India, so insurance costs are low. But the hospital also operates for free on anyone who cannot pay and on any infant younger than one month. For the rural poor, it runs 39 remote clinics and mobile-testing labs with satellite links that so far have treated 17,000 patients.
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