Emerging and developing economies are currently growing at a significantly faster pace than their developed counterparts. While the real GDP of advanced economies is expected to grow by 1.7 and 1.8 percent in the years 2024 and 2025 respectively, the real GDP of emerging markets and middle income economies is expected to grow by 4.1 percent per annum. This rapid growth poses an opportunity for developed-market multinational corporations to realize market growth by expanding their business into these markets. However, operating in emerging and developing markets also brings novel challenges and constraints, to which entrants must adapt their strategies. For instance, these markets consist of a large low-income group that favors affordable and high quality products. A concept that addresses the constraints of serving low income groups in emerging and developing markets is frugal innovation, a form of resource constraint innovation. Frugal innovations are products that are affordable, focus on core functionalities, and have an optimized performance level, thus catering to the specific needs of Bottom of the Pyramid (BoP) consumers. This research adopts the perspective of Multinational Corporations (MNCs) and explores frugal innovation as a potential solution to the various challenges MNCs face in emerging and developing markets. This study answers the following research question: “How can frugal innovation complement multinational corporations’ strategies to address business and operational challenges faced in emerging and developing markets?” It thereby links strategies, challenges, and frugal innovation in a novel manner. To answer this question, frugal innovation strategies are identified in the literature and challenges and strategies of MNCs in emerging and developing markets are determined through a literature search and semi structured interviews with representatives of various MNCs. Through the literature review on frugal innovation, five frugal innovation strategies are identified: The first strategy MNCs can employ is a Frugal Innovation Orientation (FIO) strategy, thereby solely focusing on an economic value proposition. Furthermore, they can introduce a local R&D center and engage in customer co-creation. The products offered in emerging and developing markets should be cheap, focus on core functionalities and have an optimized performance level. Finally, the products should also match the quality of the brand. The most prevalent challenges faced by MNCs in emerging and developing markets, as identified through literature and interviews, include institutional voids, infrastructure deficiencies, low purchasing power, political instability, workforce challenges, trade regulations, consumer complexity, balancing standardization with adaptation, gaining product acceptance, and NGO push back. To navigate these challenges, MNCs employ various strategies, including localization, tailoring products and pricing to local markets, collaborating with companies and NGOs, identifying core customer values, understanding the local culture and market, focusing on market potential, adopting frugal innovation, and engaging in social initiatives. Upon comparing these challenges with the current strategies and the frugal innovation strategies, the following conclusion is drawn: The frugal innovation strategies potentially only solve the business challenges of consumer complexity, low purchasing power, and gaining product acceptance. However, these challenges are already being resolved by the current strategies of MNCs. Therefore, the frugal innovation strategies are not essential but can complement the current strategies. Some of the frugal and current strategies do overlap meaning that MNCs currently already use some of the identified frugal innovation strategies.