A few days back I happened to read one of the very famous books by Mr. C.K. Pralhad i.e. Fortune at the Bottom of the Pyramid.
Before I go into the much details, I would like to give you some of the pre-conceived notions and how some companies actually leveraged it to create sizable fortune along with creating a lot of job opportunities.
Jaipur Rugs : Connecting Rural India to Global Markets
Casas Bahia: Retail for the Poor
CEMEX: Homes for the Poor
Hindustan Unilever: Iodized Salt
There are around 4 billion people in the world come under poverty line which was earlier considered as invisible, unserved market. There is a lot of potential out there. Since respected business leaders such as Bill Gates championing the cause of creative capitalism has contributed to a shift in perception.
And actively engaging with consumers in Bottom of the Pyramid markets has resonated with consumers in developed markets as well.
Has anybody heard of www.kiva.org. It’s a website helping entrepreneurs in the third world countries to raise money so they can be offered micro loans.
Earlier,there was a perception that
- The bottom of the pyramid will not create sustainable growth.
- There is no market at the Bottom of the Pyramid; they won’t pay,
- They will not accept or do not need advanced technologies;
- The Bottom of the Pyramid cannot be a source of innovation;
- Multinationals do not need them.
Maybe some multinational firms can ignore this market. Not if you are Nokia, Motorola, Nestle, Unilever, or Microsoft.Mr Pralhad says
“Four billion poor can be the engine of the next round of global trade and prosperity. Serving the Bottom of the Pyramid consumers will demand innovations in technology, products and services, and business models. More important, it will require large firms to work collaboratively with civil society organizations and local governments. Market development at the Bottom of the Pyramid will also create millions of new entrepreneurs at the grass root level—from women working as distributors and entrepreneurs to village level micro-enterprises.
Bottom of the Pyramid consumers account for $5 trillion in Purchasing Power Parity terms.
What initiative top industry players can take to make this bottom of the pyramid more lucrative to FDIs?
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