Knowledge Management during New Product Development for the Value Segment in Emerging Markets - The case of Volvo GTT´s development of the Value Truck

Abstract

The development of products for the Value Segment in Emerging Markets with its impressive number of potential customers and above average growth rates constitutes a significant opportunity for Western MNCs to escape the saturated markets in developed countries. However, limited research has been conducted in this area, as literature has predominantly concentrated on examining the Bottom of Pyramid-segment, which is not congruent with the Value Segment. As most western MNCs lack experience and knowledge about the Value Segment, this study intends to observe the knowledge creation and sourcing process during a new product development in this segment. The study is based on 13 interviews that were conducted in Sweden, India, and Japan to comprehend this process during Volvo Group Truck Technology's development of the so-called Value Truck. The results suggest the importance to effectively integrate complementary internal and external knowledge about the customers, the market and their contexts during the product development. This is in contrast to research about the Bottom of Pyramid-segment which stresses the importance of establishing local external knowledge networks with various partners. A key prerequisite for this approach constitutes a localized R&D-unit in EM, which is responsible for the product development and which must be capable of processing multiple knowledge flows.