Study 2: Lessons from GE Healthcare: How Incumbents Can Systematically Create Disruptive Innovations

Addressing the vast, fast-growing, four-billion-people-strong market segment poses unique challenges to MNCs and also requires new thinking in the field of international strategy. Companies seeking to serve the Bottom of the Pyramid (BOP) segments have to deal with market creation issues, working in informal economies with institutional voids, with broader and diverse set of partners as well as internal organizational barriers. GE Healthcare provides a rich case study of an incumbent that has been creating several disruptive innovations targeted at emerging markets for the past years. This chapter will look at organizational structures and processes that GE Healthcare has in place, which enable it to create disruptive innovations systematically. The study aims to contribute towards building disruptive innovation theory, where questions pertaining to selective success and failure of incumbents to create disruptive innovations remain unanswered. Literature on disruptive innovations recommends incumbent firms to create a separate entity for commercializing disruptive innovations. However, scholars have been calling upon firms to explore new markets and exploit existing opportunities simultaneously by being ambidextrous. The ability to successfully drive disruptive innovations in a sustained manner from within the organization will be analyzed through the lens of organizational ambidexterity. The manifestation of ambidexterity is the company’s ability to initiate multiple innovation streams, in this case sustaining innovations and disruptive innovations. This work will look at the mechanisms of ambidexterity at GE Healthcare to help explain its ability in successfully hosting both sustaining and disruptive innovations from within its boundaries.