FORTUNE AT THE BOTTOM OF THE PYRAMID: ERADICATING POVERTY THROUGH PROFITS
INTRO
“ What are we doing about the poorest people in the world? Why can’t we mobilize the investment capacity of large firms with the knowledge and commitment of NGOs and the communities that need help? Why can’t we co create new solutions?”. This is the essence of this book written by C.K. Prahalad.
THE MARKET AT THE BOTTOM OF THE PYRAMID
This section describes and displays all the unique characteristics of the composition of the BOP market. It also explains how typical and traditional business and market-based solutions are not applicable in leading poverty reduction AND economic development of those poor countries. The big multinational firms, NGOs and any sector interested in helping must first realize how peculiar the BOP market is and how misconceived it can be: even if extremely poor and virtually without money, the BOP offers incredible potential because the population is usually quite massive; the distribution access is actually quite easy, since the youngest generations migrates in big numbers to the big cities, making them more accessible targets; also, the BOP market is very brand-conscious, which is quite helpful when targeting for specific products; BOP consumers are technology-oriented and connected. The difficult task is to turn the BOP population into active consumers who can actually consume. Three principles has been described as: Affordability, Access and Availability. The helpers must be creative in ways to tap into this market while taking into account the scarcity of cash flow of BOP population and access to traditional market.
PRODUCTS AND SERVICES FOR THE BOP
This section explains the correct ways to create and develop products in accordance to the reality of the BOP. Through this chapter, we saw that for the commercialization of the BOP-oriented products to be operational and successful, a few principles must be applied, which comprises the realization that the adaptability of the processes, education of customers, research, innovation and structure of a system.
BOP: A GLOBAL OPPORTUNITY
It basically explains how large firms or companies can reach and understand the BOP market, for example some BOP innovations can find their place in developed market, or lessons from the BOP markets can enrich and improve the management practices of more international firms.
THE ECOSYSTEM FOR WEALTH CREATION
To be sustainable, the BOP market must be surrounded by a market-based ecosystem consisting of NGOs, micro enterprises, cooperatives, large local and international firms etc..., especially since most developing countries do have all those entities present locally. tHe key here is to mobilize the entire ecosystem and make it work for the BOP market.
REDUCING CORRUPTION: TRANSACTION GOVERNANCE CAPACITY (TGC) and DEVELOPMENT AS SOCIAL TRANSFORMATION
This part discusses the problem of corruption in developing countries, which hinders the proper establishment and functioning of the BOP market. According to the book and the author, the corruption can be overcome by the TGC, which consists of laws and regulations to protect the market. The work hand in hand of TGC and innovations, as well as the role of women in the development of successful markets is discussed and emphasized.
Finally, the the author concludes that the best allies in fighting poverty are themselves and that an idea is all it takes sometimes to change the world.
References:
- C.K. Prahalad (2010), The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits, Pearson Education (Wharton School Publishing)
- website: http://bottomofpyramid.blogspot.ca/2007/03/book-summary-fortune-at-bottom-of.html
References: - C.K. Prahalad (2010), The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits, Pearson Education (Wharton School Publishing) - website: http://bottomofpyramid.blogspot.ca/2007/03/book-summary-fortune-at-bottom-of.html
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