Whereas Western companies typically try to develop a higher value product, an Asian company is more likely to be innovative in terms of cost saving.
Rather than adding features or improving quality, an Asian company will likely try to remove features that are not strictly necessary or to find ways of offering the same functionality using cheaper materials.
It is an approach that is closely related to the idea of products being suitable for the actual needs and budget in a particular market segment.
Bill Russo, Senior advisor at Booz &Co. in Beijing, puts it like this: “In China the mindset is, How do you get creative and do it at a reasonable price point? How can you create something unique without necessarily putting it out of the reach of the average consumer?”
Asian companies often compete on low prices and they aim at the lower or mid-end of the market – which is often very big locally. However, the quest for low cost may come at the expense of quality and reliability.