Beyond Local Responsiveness – Multi-Domestic Multinationals at the Bottom-of-the-Pyramid

Abstract

The purpose of this chapter is twofold. First, to investigate how multi-domestic, multinational corporations (MNCs) can develop business models that are appropriate to “Bottom-of-the-Pyramid” (BOP) settings. Second, to address how they can apply elements of BOP business models across their operations. We use the case of the entry of the Norwegian mobile telecom MNC Telenor into India as the empirical context. Prior to India, Telenor had operated successfully in Asian emerging economies by adapting its business model to local conditions. However, it had only operated in the upper income tiers of these countries. In India, its late entry meant that for the first time in its history it had to move beyond these upper income tiers and develop a business model suited to BOP. We apply an economic model terminology as a means to gauging the degree of business model innovation Telenor undertook. Telenor succeeded in its development of a BOP business model by working in close partnership with local firms. Although Telenor in India was operating at BOP, a number of the resultant innovations were deemed by Telenor to be transferable to top-of-the-pyramid operations across Telenor. In order to succeed in developing BOP business models MNCs must go beyond local responsiveness and engage closely with local partners. However, transference of elements of BOP business models to other parts of the MNC is contingent on there being a centralized integrating capability.

Citation

Gooderham, P.N., Ulset, S. and Elter, F. (2016), "Beyond Local Responsiveness – Multi-Domestic Multinationals at the Bottom-of-the-Pyramid", Perspectives on Headquarters-subsidiary Relationships in the Contemporary MNC (Research in Global Strategic Management, Vol. 17), Emerald Group Publishing Limited, Leeds, pp. 3-26. https://doi.org/10.1108/S1064-485720160000017001