Bottom of the Pyramid - Business Plan Permanet
1. Introduction
My business plan is about a product which works according to the theory of the bottom of the pyramid. The theory was first mentioned by C.K. Prahalad in his book “The fortune at the bottom of the pyramid”. In his book he defines the bottom of the pyramid as the largest and poorest socio-economic group worldwide which live with less than 2 USD per day. The previous strategies which are used to sell products to this market, which consists out of 4 billion people are not very useful since they don´t present a win-win scenario. The companies must make a profit while at the same time they have to partner with the poor in order to have an innovative active engagement, which is achieved trough a effective collaboration between civil society organizations, governments, large firms and of course the poor. This aspect becomes more important in the globalising world. The poor need to have access to products and services which represent global quality standards. Companies cannot just consider the poor as a part of their corporate social responsibility program. They poor should be seen as the largest and fastest growing market in the world. There are several characteristics, which show the differences between BOP markets and markets of the developed world. First of all one single distribution solution is not enough for the BOP markets. The poor are mostly living in rural areas which are wide spread. Another characteristic is that the BOP consumers expect a great quality at prices they can afford. The firms have to put a lot of effort in decreasing the costs and increasing the quality. An important aspect of the poor is that they adapt very quick to advanced technology. This is not the case in the developed world where consumers have to get used to new technology and forget the old one. The poor never had any advanced technology, therefore they do not need to forget any old one. Previously firms and NGO´s used to provide service and products free of charge. This
My business plan is about a product which works according to the theory of the bottom of the pyramid. The theory was first mentioned by C.K. Prahalad in his book “The fortune at the bottom of the pyramid”. In his book he defines the bottom of the pyramid as the largest and poorest socio-economic group worldwide which live with less than 2 USD per day. The previous strategies which are used to sell products to this market, which consists out of 4 billion people are not very useful since they don´t present a win-win scenario. The companies must make a profit while at the same time they have to partner with the poor in order to have an innovative active engagement, which is achieved trough a effective collaboration between civil society organizations, governments, large firms and of course the poor. This aspect becomes more important in the globalising world. The poor need to have access to products and services which represent global quality standards. Companies cannot just consider the poor as a part of their corporate social responsibility program. They poor should be seen as the largest and fastest growing market in the world. There are several characteristics, which show the differences between BOP markets and markets of the developed world. First of all one single distribution solution is not enough for the BOP markets. The poor are mostly living in rural areas which are wide spread. Another characteristic is that the BOP consumers expect a great quality at prices they can afford. The firms have to put a lot of effort in decreasing the costs and increasing the quality. An important aspect of the poor is that they adapt very quick to advanced technology. This is not the case in the developed world where consumers have to get used to new technology and forget the old one. The poor never had any advanced technology, therefore they do not need to forget any old one. Previously firms and NGO´s used to provide service and products free of charge. This