Reprint: R1103J
If your company is intrigued by the opportunities at the bottom of the pyramid but is hesitant to plunge in, it’s not alone: Despite the immensity of the markets and the volume of the hype, few multinational firms have built sizable businesses serving consumers or producers who survive on just a few dollars a day. The reason, say Karamchandani, Kubzansky, and Lalwani, is that it’s far more difficult than many global corporations realized to get prices low enough to attract consumers and to manage distributed low-income producers. The authors, from Monitor Group, report on the results of a study of 700 market-based initiatives for social change in India and Africa.
The obstacles to doing business at the bottom of the pyramid are significant: uncertain customer cash flow, difficulty gauging demand, distribution challenges, disaggregated providers, and undeveloped business ecosystems. Using examples from many diverse sectors—including microfinance, housing, insurance, and water purification—the authors explore innovative ways to surmount those obstacles and serve the world’s poor.
If your company is intrigued by the opportunities at the bottom of the pyramid but hesitant to plunge in, it’s not alone: Despite the extent of the markets and the volume of the hype, few multinational firms have built sizable businesses serving people who survive on just a few dollars a day. Companies sense that profits in this market are elusive, and the evidence backs them up.
