The Market at the Bottom of the Pyramid
urn on your television and you will see calls for money to help :he world's 4 billion poor-people who live on far less than $2 a day. In ict, the cry is so constant and the need so chronic that the tendency for nany people is to tune out these images as well as the message. Even :hose who do hear and heed the cry are limited in what they can :ccomplish. For more than 50 years, the Vorld Bank, donor nations, tarious aid agencies, narional governments, and, lately, civil society :rganizations have all fought the good fight, but have not eradicated io'erty. The adoption of the Millennium Development Goals (MDG) by ::r United Nations only underscores that reality; as we enter the 21st :::rurv, poverty-and the disenfranchisement that accompanies it:.:rarns one of the world's most daunting problems. The purpose of this book is to change that familiar image on TV. It is :: :llustrate that the typical pictures ofpoverty mask the fact that the
represent resilient entrepreneurs and vaIue-conscious :::sumers. What is needed is a better approach to help the poor, an
rgproach that involves partnering with them
xhieve sustainable win-win scenarios where the poor are actively mgaged and, at the same time, the companies providing products
The Fortme at the Bottom of the
Theeconomicpyramid.SourreC.N.PrahaladandStuartHart,2002.TheFortuneatthe Bottom 0t the Pyramid, Slralegl+ 8us/ress, lssue 26, 2002. Reprinted with permissi0n trom
strategt + business, the award-winning management quarterly published by B00z Allen Hamilton. M.strategy-business.com.
and services to them are profitable. This collaboration between the poor,
civil society organizations, governments, and large firms
the largest and fastest growing markets in the world. Large-scale and wide-spread entrepreneurship is at the heart of the solution to poverry. Such an approach exists and has, in several instances, gone well past the idea stage as private enterprises, both large and small, have.begun to successfully build markets at the bottom of the pyramid (BOP) as a way of eradicating poverty. The economic pyramid of the world is shown in Figure 1.1. As we can see, more than 4 billion constitute the BOP These are the people who are the subject matter of this book.
THE BOTTOM OF THE PYRAMTD (BOP)
The distribution of wealth and the capacity to generate incomes in the world can be captured in the form ofan economic pyramid. At the top of the pyramid are the wealthy, with numerous opportunities for generaring high levels of income. More than 4 billion people live at the BOP on less than $2 per day. They are the subiect matter ofthis book.
at the Bottom of the
As you turn rhese pages, you
with educational campaigns and innovative products. There
discover companies fighting disease
organizations helping the handicapped walk and helping subsistence farmers check commodity prices and connect with the rest of the world. There are banks adapting to the financial needs of the poor, power companies reaching out to meet energy needs, and construction companies doing what they can to house the poor in affordable ways thar allow for pride. There are chains of stores tailored to understand the needs ofthe poor and to make products available ro them. The strength of these innovative approaches, as you will come to appreciate, is that they tend to creare opportunities for the poor by offering them choices and encouraging self-esteem. Entrepreneurial
solutions such as these place a minimal financial burden on the developing countries in which they occur. To begin to understand how all of this is remotely possible, we need to start with some basic assumptions:
First, while cases certainly can be found of large firms and multinational corporations (MNCs) that may have undermined the efforts of...
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