The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits Pearson Education Inc., Wharton School Publishing, Upper Saddle River, New Jersey, 2004; Pages: 432; Price: US $ 29.99; ISBN: 0-13-146750-6. The treasure lying at the bottom of the world's economic pyramid, attracts companies with unimaginable prospects and profits. The economic pyramid of the world contains more than 400 crores of population at the bottom whose earnings and spendings per capita are low, but as an aggregate, are much larger than they are perceived to be. Hence, it is high time for the corporate managers to make an effort to locate the Alibaba's treasure lying hidden at the Bottom of the Pyramid (BOP). Broadly, the characteristics and spending patterns of the BOP segment are different as compared to the other segments of the society. In the high and medium range markets, consumers are able to buy bigger packages of consumables such as a 10 kg packet of detergents so that they need not shop frequently. But low-end BOP consumers do not have so much disposable cash to buy in bulk and store. Hence, it is suggested that this segment be provided with "single serve" packages. Already in India, 30% of personal care and other consumables such as shampoo, tea, and cold medicines are sold in single serve packages and most single serve packages are priced at one rupee. Hindustan Lever Limited offers Clinic Plus shampoo priced at 50 Paisa. The major differences between the Bottom of the Pyramid and the Top of the Pyramid markets are differences in buying habits and cultural differences. The Bottom of the Pyramid is characterized by a low brand consciousness due to low economic position, and is mostly need driven. Major emerging BOP markets in the world, including China, India, Mexico, Russia, Brazil, South Africa, Thailand, Turkey and Indonesia, with a combined population of about 300 crores, represent 70% of the world BOP population. Such a huge jumbo size BOP market promises intense marketing opportunities for the companies. THE BOOK UNDER REVIEW Part 1 of the book emphasizes the development of an appropriate framework for the active engagement of the private sector at the BOR It provides the basis for a profitable win-win situation for all stake holders involved in the process of catering to BOP markets. Part 2 describes 12 cases, in a variety of businesses where BOP is becoming an active market and is bringing benefits to its customers far beyond offering just products. Part 3 contains stories in video form-an attempt to present the prospects and prosperity underlying the BOP markets, and to bring the BOP markets into limelight. Around 100 hrs of video was collected as part of the research. The book specifies workable solutions for serving huge population lying at the bottom of the world's economic pyramid. Even with NGOs working tirelessly and government support and international aid being circulated heavily, the problem of poverty still persists. According to the author, the main reason for this situation is that the private sector, which is huge and potentially capable of solving any problem in the world, is practically not involved. The concept of 'Bottom of the Pyramid" is explained in this book. The World's Economic Pyramid contains wealthy people at the top with high spending capacities and habits. But the size of this segment is very small i.e., only about 7.5 to 10 crores of 600 crores plus population, whereas more than 400 crores of population live at the bottom of the pyramid earning less than $2 per day and in India alone around 40 crores of people earn less than Rs. 90 per day. The author opines that, to effectively serve this BOP market, instead of old and tried solutions, continuous innovation and a paradigm shift in the thinking process of the private sector is needed. THE BOOK PRESENTS CASES OF COMPANIES THAT ARE INVOLVED IN BOP MARKETING * The Solar Electric Light Fund (SELF): It established the Solar Electric Light Company (SELCO) in 1995 to market, install, and serve the Solar Home Systems (SHS) in south India. …

The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits

Sustainability is hinged on innovation. The importance of sustainable innovation management in sustainable supply chain management (SSCM) cannot be underestimated. Studies on SSCM have emphasised t...

A supply chain sustainability innovation framework and evaluation methodology

Systems thinking:a review of sustainability management research

Socially and environmentally responsible procurement: A literature review and future research agenda of a managerial issue in the 21st century

Many researchers believe the tremendous industrial development over the past two centuries is unsustainable because it has led to unintended ecological deterioration. Despite the ever-growing attention sustainable supply-chain management (SSCM) has received, most SSCM research and models look at the consequences, rather than the antecedents or motives of such responsible practices. The few studies that explore corporate motives have remained largely qualitative, and large-scale empirical analyses are scarce. Drawing on multiple theories and combining supply-chain and business ethics literature, we purport that instrumental, relational, and moral motives are behind a firm’s engagement in SSCM practices. Specifically, we examine the links between corporate motives, SSCM practices, and firm performance. Using a sample of 259 supply-chain firms in Germany, we empirically test five hypothesized relationships. Our results reveal that relational and moral motives are key drivers, and that firms exhibiting high levels of moral obligations tend to outperform those primarily driven by amoral considerations. Findings of this study contribute to multiple literatures espousing sustainability management and can help policy makers, stakeholder groups, and scholars develop more robust strategies for encouraging firms to practice SSCM.

Motives and performance outcomes of sustainable supply chain management practices: a multi-theoretical perspective

In a world of limited resources, it could be argued that companies that aspire to be good corporate citizens need to focus on making best use of resources. User value and environmental harm are created in supply chains and it could therefore be argued that company business ethics should be extended from the company to the entire value chain from the first supplier to the last customer. Starting with a delineation of the linkages between business ethics, corporate sustainability, and the stakeholder concept, this article argues that supply chains generally have a great innovation potential for sustainable development. This potential could be highlighted with system thinking and the use of change management knowledge, promoting not only innovations within technology but also within organizational improvement. We propose process models and performance indicators as means of highlighting improvement potential and thus breaking down normative business ethics’ requirements to an opertionalizable corporate level: Good business ethics should focus on maximizing stakeholder value in relation to harm done. Our results indicate that focusing on supply chains reveals previously unknown innovation potential that seems to be related to limited system understanding. The assumption is that increased visibility of opportunities will act as a driver for change. Results also highlight the importance of focusing on sustainability effects of the core business and clearly relating value created to harm done.

/pdf/detecting-supply-chain-innovation-potential-for-sustainable-2tgf6bvzt7.pdf

Peter Johansson

Papers

Detecting Supply Chain Innovation Potential for Sustainable Development.