I, like many others, was saddened to hear of the untimely passing away of Prof. C. K. Prahalad. His career spanned over three decades during which time he introduced several innovative business ideas that quickly became mainstream. He was one of the first to identify ‘core competencies’ of a business and relate it to a company’s competitive advantage. His next book introduced the concept of ‘co-creation’ where corporations engaged their customers in creating joint value. It influenced many of the approaches used by companies in the 2000s to get their customers to co-design products.
Perhaps his most widely influential work was his last book on “The Fortune at the Bottom of the Pyramid: Eradicating Poverty through profits”. In it he outlined his take on how corporations could profitably service the very large market that consists of the bottommost economic strata. While the affluent tip of the global economic pyramid consists of less than 100 million people who make over $20,000 a year, there are over 2 to 2.5 Billion people who live on less than $2 a day. Yet these markets at the bottom of the economic pyramid also have needs and wants. By properly designing products and delivery mechanisms to satisfy this segment of the consumer population, he showed how companies could make money while helping this social segment.
His Bottom of the Pyramid or BOP approach quickly caught on and today a range of multinationals are focused on creating solutions that are targeting this market segment. Examples of these include Hindustan Lever, Godrej and GE Healthcare. His philosophy that even the poorest segment had a real market need and were a viable market has helped redirect corporate strategies and will have significant impact across the globe.
CK Prahalad has been honored for his work around the world including most recently being awarded the Padma Bhushan, one of the highest civilian honors, by the Indian Government. The world will miss this strategic thinker but his legacy will continue to improve the quality of life for millions subsisting at the bottom of the pyramid.
You can read an earlier piece I wrote about his work on my blog at “Designing for the bottom of the pyramid”.
Posted in BOP, bottom of the pyramid, creative capitalism, India, Poverty, Social Ecosystem, Social Entrepreneur, social Innovation
Tagged BOP, CK Prahalad, India, international development, Poverty, Social Business, Social Ecosystem, Social Entrepreneur, social entrepreneurship, Social Impact, Sustainable ventures
A good article that touches on some of the issues in my last post is a recent interview of Vijay Mahajan on the Credit Suisse website. In the interview Mr. Mahajan points out to some of the prerequisites for microfinance to pull people out of poverty. He also highlights the need to match investment growth in this sector to the available management capacity in order to avoid a bubble in the sector. Here are some extracts from his interview. Continue reading →
Posted in BOP, bottom of the pyramid, India, micro-finance, microfinance, Social Business, Social Ecosystem, Social Entrepreneur, social Innovation, sustainable development
Tagged BASIX, BOP, Credit Suisse, micro-finance, microcredit, microfinance, Social Business, social entrepreneurship, sustainable development, Vijay Mahajan
Jhonatan Rotberg, was sent to MIT by Telmex, one of Latin America’s largest telcos, and teaches NextLab where he tries to bring cellular technology to the other 90 percent of the world. One of the labs startups, CelEdu, offers cellphone-based games and quizzes to teach basic literacy skills in India. Ranjani Saigal from the TIE Social Entrepreneurs Group helped connect CelEdu students to Tara Aakshar. You can see some of their work in progress at the CelEdu site
A great article in the Boston Globe highlights the many ideas that have spun out of this lab. Some excerpts below – click here for the entire article.
In NextLab, Rotberg challenged students by asking, “Can you make a cellphone change the world?’’ And students have responded, creating nearly two dozen projects and three start-up ventures that have been working with communities in developing countries like India, Vietnam, and Mexico.
Dinube, a NextLab spinoff that was tested in Mexico last summer, provides payment services to people who don’t have access to traditional banks. “One of the powerful things about cellphones in Mexico is that there is a 75 percent penetration rate,’’ said Jonathan Hayes, a cofounder of Dinube. “But only 25 percent of the population has a bank account. So a cellphone-based system can fill a huge, important gap.’’
Posted in BOP, bottom of the pyramid, Information Technology, international development, mobile technology, Poverty, Rural Development, Social Business, Social Ecosystem, Social Entrepreneur, social Innovation
Tagged BOP, Education, Information Technology, Jhonatan Rotberg, MIT, mobile technology, NextLab, Poverty, Social Business, Social Ecosystem, Social Entrepreneur, Social Impact, social Innovation, Telmex
In the past decade, much progress has been made in India and people have been justifiably proud of the improving economic situation. While most observers point to the top line numbers that show the number of people living below the “poverty line” has been consistently decreasing, by focusing on just these aseptic numbers, they fail to understand and capture the continuing anguish in the rural countryside. Continue reading →
Posted in BOP, bottom of the pyramid, India, Poverty, Rural Consumer, Rural Development, Rural Education, Sanitation, Schools, water and sanitation
Tagged Agricultural Development, BOP, George Foundation, India, Poverty, Rural Development, Rural Education, Shanti Bhavan, Social Impact, World Bank
In response to my recent post on Rural Consumers, Joost Bonsen of MIT commented.
Thanks much for your survey of the rural consumer landscape in India. I’m curious how what you’re observing either reinforces or differs from the Hart-Prahalad BOP thesis and the cases they give, such as Hindustan Lever, etc. Plus how much of the consumer goods sector is dominated by MNCs or affiliates versus homegrowns? And finally, what’s the rural analog to Walmart or the old Sears Roebuck catalog or other innovations in the distribution systems?
I got to thinking about what he had asked and decided to write up a separate post instead of replying as a comment. So here goes. Continue reading →
Posted in Agricultural Development, BOP, bottom of the pyramid, India, international development, Poverty, Rural Consumer, Rural Development, Rural Education, Rural Entrepreneur, Social Business, Social Ecosystem, Social Entrepreneur, social Innovation, sustainable development
Tagged Agricultural Development, BOP, eJeevika, rural BPO, Rural Consumer, Rural Development, Rural Education, Rural Entrepreneur, sustainable development, Vigyan Ashram