Inclusive Strategy for the Poor Finds Wider Applications

Abstract

It took almost four years for the academic effort of C K Prahlad and Stuart Hart to be recognized as fit for publication by Harvard Business Review. The path-breaking research by the duo has received wide acclaim and has led to multinational corporations using the strategy as part of their efforts to grow their business footprint by also focusing on the bottom of the pyramid (BOP) segment of the market. In their research, Prahlad and Hart pointed out the companies were losing a greater pie of the market by not focusing on developing products for the poorest of poor. They highlighted the need for a strategy to exploit the fortune at the bottom of the pyramid.
 The research on the BOP strategy has evolved over the years. The research has also been subject to criticism from some quarters as a strategy that exploits the poor and is imperialistic by nature. Organisations have achieved success with BOP strategy. However, there are also organizations that have faced failure with this strategy.
 This case study traces the journey of the evolution of the BOP strategy over the years and documents the lessons that one can learn from failure in its implementation. Understanding the BOP market and educating the poorest consumers through unconventional means is a critical success factor. Profit cannot be the sole driver for successful implementation of BOP strategy as social and environmental obligations have to be met. The trade-off between profitability, scale, and nonprofit obligations is a tightrope for organizations attempting to garner a slice of the BOP market share. Community involvement is a crucial determinant of success as well.