Bottom Of Pyramid Market Business Essay

Bottom Of gain food market Business EssayThis piece of music traces the development of concepts relate to the Bottom of the Pyramid which ar take a leak as a poverty alleviation perspective. The trip the light fantastic toe thesis states that multinational companies (MNCs) can reach advantageousness and help to eradicate poverty, at the comparable time, by designing and implementing sustainable solutions for the bang consumers.At the same time, numerous academics and business managers have suggested that rather than focusing on the poor as consumers, MNCs have to gull the poor as producers, and started by increasing their income to reduce poverty. The number of people who occupying the lowest tier in the worlds economic pyramid has been estimated to be between 3 and 4.5 billion.However, multinational companies are currently unfamiliar with the bebop market and the tendency is that MNCs ignore the BOP market and prefers to focus on markets already veritable. This gives a n indication of the organism of a weakness that can potentially disrupt excogitations in the BOP market.Hence, the primary(prenominal) objective of this paper is to identify the disassembleicular challenges that companies found in the BOP market and in what forms innovation thrives in BOP markets. The literature review of this paper is mainly based on journal articles published in peer-reviewed journals associate to innovations at the BOP and on case studies of companies which have implemented BOP projects.Keywords Bottom Of Pyramid Market basiss at Bottom Of Pyramid Sustainable Product DesignDeclarationI declare that I have personally prepared this article and that it has not in whole or in bulge been submitted for either other degree or qualification. Nor has it appeared in whole or in part in any textbook, journal or any other document previously published or produced for any purpose. The work described here is my own, carried out personally unless otherwise stated. All sources of information, including quotations are acknowledged by means of reference.CUsersSbastienPictures3 IdentitSignature (2).JPGSbastien EscalierNottingham Trent University, UKIntroduction (700 words)General AreaThis paper explores the theological root of the BOP market theory and the current trends in multinational company to venture into these markets. Influenced by around ideas drawn from the work of Prahalad on Bottom of Pyramid, the author has tried to put in perspective the progeny of innovation in underdeveloped countries.Since the mists of time many people have reflected and worked on the eff of poverty, Mandela (2005, p.3) argues that wish well slavery and apartheid, poverty is not natural. It is manmade and it can be overcome and eradicated by the actions of human beings. Even prior it has been argued (Ghandi 1940) that poverty was the worst form of violence. But the sentence Bottom of the Pyramid ( whack) was first introduced by Roosevelt, on the 7th of April 19 32 in his radio address The forgotten Man. Later, in the late 1990s Prahalad and Hart from the University of myocardial infarction have suggested that multinational corporation companies (MNCs) can help to reduce the poverty. They defend the idea that if multinational companies attain fit and affordable product for the low-income people, they can both help reduce poverty and generate sweet benefits. Then, they have introduced the concept of Bottom of the Pyramid (BOP), which refers to the 4 billion people living on an income of 3 US $ or less per day in purchasing power parity (PPP) (Prahalad, 2004). However, although this concept has generated a strong interest in the corporate world and in lot of academia, the reality of this idea frame controversial (Karnani, 2007). During the last twenty years, the economic debate on solutions to the problem of poverty in developing countries has left an increasingly important role for the private initiatives (like NGOs, microfinance or soc ial entrepreneurship for example). But poverty stay at an unacceptable level across the globe with over 1.4 billion people living downstairs the poverty line of 1.25 dollars per day in purchasing power parity (PPP) (Chen Ravaillon, 2008) and it exists a big note with the approximately 500 million people who live at the top of the Economic Pyramid with an come purchasing power of more than US$ 10,000 per year (see Rocchi 2006).Specific AreaNowadays, the context in which the MNCs run for experiences very important changes and the idea of the BoP as virgin market, easy to conquer by the company, has disappeared. Issues related to environmental sustainability or social responsibility of companies is more and more ubiquitous (Diamond 2005). Whether through consumer pressure or through government regulation, companies can no longer ignore these trends.In this context of questioning of the pompous business models, ideas of Prahalad and Hart around the wealth at the base of the pyram id have interested many multinational companies, and we have seen a proliferation of initiatives of these wizs to attempt to penetrate this market set aside. These initiatives have as the main objective to obtain knowledge of the market and generate long-term benefits, but they are alike part of the issue of corporate social responsibility (CSR), beca drop they incorporate social aspects to developing countries.Thus, in most cases the BoP initiatives use a social partner. However, we can separate the social businesses and the projects managed as vernacular projects of the company.On one side, in Bangladesh, the Grameen Danone Food and Limited (GFDL) project aims to reduce poverty by providing access to healthy food, an groundbreaking business model that relies on the creation of health yogurt micro-factories. The company Veolia have also created a project which consists in the selling of clean water in Bangladesh, where the water is naturally enriched in arsenic. both(prenomin al) projects are focused on the reputation of the business in question, and are directly related to consumers (B2C). They are defined as social businesses and they have received the support of Yunus, Nobel Prize for Peace in 2006 and know for having founded the first microcredit institution the Grameen Bank.On the other hand, some companies have developed untested business models with local contractors. These projects are slightly more discreet, because companies are addressed to an intermediary and ask him to go out of his usual scope of action (B2B). In India, in 2004, the optical firm Essilor has established partnerships with local hospitals by finance other ophthalmic test series in landlocked regions, the company also offer glasses for less than 5 euros in this area. In 2009, Schneider Electric, the world specialist in energy, has developed the BipBop Program (Business, Innovation People at the Base of the Pyramid). This program aims to provide access to green energy to bi llions of people who use kerosene lamps, in developing more local and more individualized solutions.Research questionHowever, as they still know little about the BOP market, large companies are few to engage in this type of large-scale projects and must continually learn to succeed in developing appropriate solutions. This submit of innovation at the bottom of the pyramid will be the focus of this journal article.The starting accuse is the paradox which can be observed at the BOP between the real creation of suitable products and the return to more basic products. Thus, on the one hand, Schneider Electric has succeeded in developing a new LED lamp In-Diya, for poor people who have little access to electricity in India, an innovative illuminate solution which is reliable and affordable. But on the other hand, the Grameen Danone production unit in Bangladesh is based on plans that are no longer used since a long time in developed countries, whence a solution that was not designed exclusively for the BOP market. The company Essilor doing the same thing because it also reserves its most basic eyewear models for the projects in India.The reality is more complex than this first observation. However it highlights the issue of the place and the form of innovation in the BOP strategies, topic that will be studied here.To examine this question, the author begins with some background by describing the key concepts of the base of the pyramid market and its main characteristics. The item challenges that companies face which approach this market will lead the author to consider what forms of innovation are developed in this market. Having consider this, and to demonstrate that innovation is possible in these parts of the world, the author will draw on case studies of multinational companies, such as Danone or Schneider Electric which have implemented BOP projects. To put in perspective the issue of innovation in developing countries, the link between innovation in dev eloped and developing countries will be addressed.Having shown this interplay between innovation in developing countries and developed countries the author will explain in a conclusion the issue of innovation in the ball-shaped economy of the world.