This year, India’s Mahindra & Mahindra became the world’s biggest tractor maker. It ran a television commercial in the US to mark the moment. The aim was partly to celebrate – its relatively affordable products, which suit the tastes and pockets of emerging market customers, have begun to do well in the US. Dominant in India and growing fast in China, the conglomerate’s rise can be seen as an example of an emerging market business overtaking established rivals in the industrialised world.
But the ad was also designed to goad John Deere, its biggest western competitor. The US farm equipment maker and its Indian rival have had a testy relationship since the latter entered the American market in the mid-1990s. But John Deere was also sufficiently worried to try to learn from the upstart: in 2010, it launched a low-budget tractor in India.
In Reverse Innovation, Vijay Govindarajan and Chris Trimble, professors at the Tuck School of Business, argue that other western businesses must similarly learn new tricks from their emerging markets.