Fortune at the Bottom of the Pyramid, The: Eradicating Poverty Through Profits

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Format: Hardcover
Pub. Date: 2005-01-01
Publisher(s): Wharton School Publishing
List Price: $29.99

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Summary

The world's most exciting, fastest - growing new market is where you least expect it: at the bottom of the pyramid. bull; ' The real source of market promise is not the wealthy few in the developing world, or even the emerging middle - income consumers. It is the billions of aspiring poor who are joining the market economy for the first time.' - CK Prahalad bull; Endorsed by world leaders and the UN Commission on Private Development and the Poor

Table of Contents

Preface xi
About the Author xix
Part I The Fortune at the Bottom of the Pyramid
Chapter 1 The Market at the Bottom of the Pyramid
3(20)
The Power of Dominant Logic
6 (4)
The Nature of the BOP Market
10(6)
There Is Money at the BOP
10(3)
Access to BOP Markets
13(1)
The BOP Markets Are Brand Conscious
14 (1)
The BOP Market Is Connected
14(1)
BOP Consumers Accept Advanced Technology Readily
15(1)
The Market Development Imperative
16(6)
Create the Capacity to Consume
16(3)
The Need for New Goods and Services
19 (1)
Dignity and Choice
20(1)
Trust Is a Prerequisite
21(1)
Benefits to the Private Sector
22(1)
chapter 2 Products and Services for the BOP
23(24)
A Philosophy for Developing Products and Services for the BOP
24(1)
Twelve Principles of Innovation for BOP Markets
25(3)
Making It Happen
28 (18)
Conclusion
46(1)
Chapter 3 BOP: A Global Opportunity?
47(16)
Engaging the BOP
48(2)
Local Growth Opportunities
50(2)
Learning to Grow
50(2)
Local Innovations and Global Opportunity
52 (1)
BOP Solutions for Developed Markets
53 (2)
Lessons for MNCs from BOP Markets
55(3)
Captial Intensity
55(2)
Sustainable Development
57(1)
Innovations
57(1)
The Cost of Managing
58(3)
Learning to Live in a Network of Relationships
61(2)
Chapter 4 The Ecosystem for Wealth Creation
63(14)
Market-Oriented Ecosystem
65(1)
Ecosystems for a Developing Country
66(2)
Learning the Sanctity of Contracts
68(1)
Reducing Inequities in Contracts
69(3)
Building Governance Capabilities Among the Poor
72(5)
Chapter 5 Reducing Corruption:
Transaction Governance Capacity
77(1)
Are the Poor Poor?
78(3)
TGC
81(2)
Building TGC
83(2)
The Andhra Pradesh e-Governance Story
85 (4)
eSeva
89(1)
Center for Good Governance
90(4)
Impediments
94(1)
Lessons from the Andhra Pradesh Experiment
94 (3)
Appendix: List of eSeva Services
97(2)
Chapter 6 Development as Social Transformation
99(14)
Development as Social Transformation
100(2)
Breaking Down Barriers to Communication
102(3)
BOP Consumers Upgrade
105 (1)
Gaining Access to Knowledge
106 (1)
Identity for the Individual
107(1)
Women Are Critcal for Development
108(1)
Evolving Checks and Balances
108(1)
The Real Test: From the Pyramid to the Diamond
109(4)
Part II Innovative Practices at the Bottom of the Pyramid 113(268)
Section I The Market at the Bottom of the Pyramid
115(54)
Casas Bahia: Fulfilling a Dream
117(30)
CEMEX: Innovation in Housing for the Poor
147(22)
Section II Known Problems and Known Solutions:
What Is the Missing Link?
169(2)
The Annapurna Salt Story: Public Health and Private Enterprise
171(36)
Selling Health: Hindustan Lever Limited and the Soap Market
207(34)
Section III Known Problems and Unique Solutions
241(46)
Jaipur Foot: Challenging Convention
243(22)
The Aravind Eye Care System: Delivering the Most Precious Gift
265(22)
Section IV Known Problems and Systemwide Reform
287(72)
ICICI Bank: Innovations in Finance
289(30)
The ITC e-Choupal Story: Profitable Rural Transformation
319(40)
The EID Parry Story
On CD
Section V Scaling Innovations
359(22)
The Voxiva Story
361(20)
Innovations in Energy: E+Co's Investment in Tecnosol
On CD
Section VI Creating Enabling Conditions for the Development of the Private Sector
On CD
Citizen Centricity: E-Governance in Andhra Pradesh
On CD
Biography 381 (8)
Index 389
PART III CD
35 minutes of video success stories filmed on location in the Bottom of the Pyramid in India, Peru, Mexico, Brazil, and Venezuela
Casas Bahia (3:54)
CEMEX (3:07)
Annapurna Salt (4:05)
Hindustan Lever Limited (4:16)
Jaipur Foot (4:40)
Aravind Eye Care (6:08)
ICICI Bank (4:23)
ITC e-Choupal (4:08)
EID Parry (4:12)
Voxiva (3:33)
E+Co/Tecnosol (4:34)
Andhra Pradesh (3:30)
Interactive practices text in PDF format
The EID Parry Story
Innovations in Energy: E+Co's Investment in Tecnosol
Citizen Centricity: E-Governance in Andhra Pradesh

Excerpts

Preface Preface This book is a result of a long and lonely journey for me. It started during the Christmas vacation of 1995. During that period of celebration and good cheer, one issue kept nagging me: What are we doing about the poorest people around the world? Why is it that with all our technology, managerial know-how, and investment capacity, we are unable to make even a minor contribution to the problem of pervasive global poverty and disenfranchisement? Why can't we create inclusive capitalism? Needless to say, these are not new questions. However, as one who is familiar with both the developed and the developing world, the contrasts kept gnawing at me. It became clear that finding a solution to the problems of those at the bottom of the economic pyramid around the world should be an integral part of my next intellectual journey. It was also clear that we have to start with a new approach, a "clean sheet of paper." We have to learn from the successes and failures of the past; the promises made and not fulfilled. Doing more of the same, by refining the solutions of the past--developmental aid, subsidies, governmental support, localized nongovernmental organization (NGO)-based solutions, exclusive reliance on deregulation and privatization of public assets--is important and has a role to play, but has not redressed the problem of poverty. Although NGOs worked tirelessly to promote local solutions and local entrepreneurship, the idea of large-scale entrepreneurship as a possible solution to poverty had not taken root. It appeared that many a politician, bureaucrat, and manager in large domestic and global firms agreed on one thing: The poor are wards of the state. This implicit agreement was bothersome. The large-scale private sector was only marginally involved in dealing with the problems of 80 percent of humanity. The natural question, therefore, was this: What if we mobilized the resources, scale, and scope of large firms to co-create solutions to the problems at the bottom of the pyramid (BOP), those 4 billion people who live on less than $2 a day? Why can't we mobilize the investment capacity of large firms with the knowledge and commitment of NGOs and the communities that need help? Why can't we co-create unique solutions?That was the beginning of my journey to understand and motivate large firms to imagine and act on their role in creating a more just and humane society by collaborating effectively with other institutions. It was obvious that managers can sustain their enthusiasm and commitment to activities only if they are grounded in good business practices. The four to five billion people at the BOP can help redefine what "good business practice" is. This was not about philanthropy and notions of corporate social responsibility. These initiatives can take the process of engagement between the poor and the large firm only so far. Great contributions can result from these initiatives, but these activities are unlikely to be fully integrated with the core activities of the firm. For sustaining energy, resources, and innovation, the BOP must become a key element of the central mission for large private-sector firms. The poor must become active, informed, and involved consumers. Poverty reduction can result from co-creating a market around the needs of the poor. We have to discard many of the "for and against" views of the world. For example, "are you for globalization or against it" is not a good question. Globalization, like all other major social movements, brings some good and some bad. Similarly, global versus local is not a useful debate. The tensions are real. Very early in my career, I learned that even within the multinational corporation (MNC) that is not a settled debate. Similarly, the debate between small (e.g., microf

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