C.K. Prahalad’s perspective
Characteristics of Mexican market
C.K. Prahalad’s approaches for Mexican market
In this research let me say some words about C.K. Prahalad perspective and links between his theory and real modern Mexican market. I chose Mexico because it is a country with a very high poverty headcount ratio at national poverty line (% of population). World Bank gives us number 51.3 % by 2010 (World Bank). But Mexico is also remarkable by its economic growth. We can consider this country as fastest growing economy in Latin America (Marcelo M. Guigale, 2001). But anyway as most of the Latin America region, Mexico faces many economic challenges. When we talk about poverty we should understand that poverty is a complex and multidimensional phenomena and it is not only lack of income but also a state of mind. Reduction of poverty is a key area for the government. To cope with poverty government uses specific social politics. It is not only target policies like opportunities for income but also broad policies. By broad policies we can mean education, job training, etc. As was mentioned before, poverty not only lack of income but also state of mind. And government is trying to pull out with the roots poverty by changing people’s mind. Government provides these reforms with saying that rural violence has been increased particularly in the southern part of Mexico (Lustig, 2006). But it only means that poverty is in the heart and not in the pockets.
1. C.K. Prahald’s perspective
Nowadays we are led by the developed countries and names of its countries always guarantee success. Some of developed countries like China, Vietnam and India are notorious by the poverty and bad quality products. But every economy has its own cycles. Singapore was an extremely poor country but now it’s on the list of developed counties. America is still considered as a developed country but we often hear from news that all the economy has a huge public debt so economy is very unstable. Could you imagine what will happen if economy system will collapse? Prahalad’s view on economy definitely is very revolutionary one. He breaks the stereotypes and tells us great ideas. There is a stereotype that developing country’s government has to fight with the poverty. But for more than 50 years, the World Bank, donor nations, various aid agencies, national governments and, lately, civil society organizations have all fought the good fight, but have not eradicated poverty (Prahalad., 2005). Maybe it means that there is no need to fight with that? Maybe we should not fight with the poverty but use it and apply good business strategies to it? Moreover, when world’s organizations acknowledge this poverty and try to fight with in many cases it means that they acknowledge that these people are the people of second kind and they need help. Is it true that they need help? Developing economics are the fastest growing markets in the world. Also they have a very big advantage which developed countries do not have – its population. Yes, if person live only on 2 dollars in a day it means that he doesn’t have big purchasing power compare with developed countries. Let’s take Norway as an example of the most developed country as UN list gives us (Developed country). It has population of 4 985 870 people (Demographics of norway). Population of Vietnam is around 58 000 000 (Vietnam). Also we should not forget about the mentality. People who are very poor they are very sensitive to labels and brands. Besides it there are some points about business. Because there nobody wants to come to the developing country market it often has its own monopoly. If there will come a new international company which still will have good profit but its production will be slightly cheaper than monopolist its means that everybody will start to buy the cheaper one. Cheap price is very important argument in business. Now almost everything...
References: [Giugale, 2001] Marcelo M. Guigale, Olivier Lafourcade, Vinh H. Nguyen. Mexico. A comprehensive development agenda for the New Era. 2001
[Prahalad, 2005] C.K. Prahalad. The fortune at the bottom of the pyramid. 2005
[Ann Bernstein 2010] Ann Bernstein. The case for business in developing economics. 2010
[Lustig, 2006] Nora Lustig. Mexico, the remaking of an economy. 2006
[Prahalad 2009] C.K. Prahalad. The fortune at the bottom of the pyramid. 2009
[Economy Watch] http://www.economywatch.com/market/world-markets/mexican-market.html
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