Bottom of the Pyramid - Business Plan Permanet

Topics: India, Malaria, Mosquito Pages: 10 (3850 words) Published: January 21, 2012
1. Introduction
My business plan is about a product which works according to the theory of the bottom of the pyramid. The theory was first mentioned by C.K. Prahalad in his book “The fortune at the bottom of the pyramid”. In his book he defines the bottom of the pyramid as the largest and poorest socio-economic group worldwide which live with less than 2 USD per day. The previous strategies which are used to sell products to this market, which consists out of 4 billion people are not very useful since they don´t present a win-win scenario. The companies must make a profit while at the same time they have to partner with the poor in order to have an innovative active engagement, which is achieved trough a effective collaboration between civil society organizations, governments, large firms and of course the poor. This aspect becomes more important in the globalising world. The poor need to have access to products and services which represent global quality standards. Companies cannot just consider the poor as a part of their corporate social responsibility program. They poor should be seen as the largest and fastest growing market in the world. There are several characteristics, which show the differences between BOP markets and markets of the developed world. First of all one single distribution solution is not enough for the BOP markets. The poor are mostly living in rural areas which are wide spread. Another characteristic is that the BOP consumers expect a great quality at prices they can afford. The firms have to put a lot of effort in decreasing the costs and increasing the quality. An important aspect of the poor is that they adapt very quick to advanced technology. This is not the case in the developed world where consumers have to get used to new technology and forget the old one. The poor never had any advanced technology, therefore they do not need to forget any old one. Previously firms and NGO´s used to provide service and products free of charge. This does not solve the problem in a sustainable way. The aspect of working according to the bottom of the pyramid theory becomes increasingly important. According to the World Health Organization around 300-500 million cases of malaria are registered every year . Almost 1 million people are killed by malaria every year . Most of them are in the developing countries, because of the financial lack for Medicine and prevention products. Since Malaria is transferred through mosquitos, it is wide-spread in warm countries which have a monsoon season. These countries are mostly less developed, malaria should also be considered as a barrier for economical development. A victim of malaria misses in average 12 days of productive output . Everyone can image how much it affects low-income families in which the only working person is suffering from malaria. Moreover, fear of malaria prevents investment and tourism into new regions, which hampers economic development. It is confirmed that countries which are highly endemic to malaria show less annual economic growth than countries which are unburdened by malaria. A sentence of the WHO made it clear: “In Africa today, malaria is understood to be both a disease of poverty and a cause of poverty.” Direct and indirect economic costs of malaria are a significant factor which should be considered. Some examples of direct economic costs are the doctors´ fees, the cost of antimalarial drugs, research, education and the development of maintaining public health programs and facilities. Some examples of indirect economic costs is the lesser opportunity to participate in international trade, less tourism and lesser earnings and productivity due to the illness. The only solution for the problem is to lower the price of medicine or better for prevention products. It would also be good if the products are produced in the local developing world, since it would bring employment and money to the country. Vestergaard Frandsen is an experienced...
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