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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.

The purpose of this chapter is to demonstrate that sound, mainstream international business (IB) thinking should be applied when assessing the economic opportunities available to multinational enterprises (MNEs) in Bottom of the Pyramid (BOP) markets.

We describe and evaluate critically the key points made in the BOP literature about the alleged attractiveness of BOP markets, and the alleged strengths of MNEs to penetrate these markets successfully. We revisit the managerial implications from the BOP literature using an internalization theory lens.

We demonstrate the weak conceptual grounding of conventional BOP thinking, which suggests that MNEs from developed economies should be very entrepreneurial and should systematically serve BOP markets with new products and business models. We also show the fallacy of the idea that a “success template” in one BOP market would be easily replicable in other BOP markets and would allow the MNE to earn economies of scale and scope.

IB researchers should start conducting serious studies on the attractiveness of BOP markets for MNEs. They should also analyze seriously the micro-foundations of successful knowledge recombination in BOP markets and the limits to the transferability of success templates. Mainstream IB theory, namely internalization theory, is particularly well equipped to analyze the costs and benefits of entering BOP markets, building upon a comparative institutional logic.

Senior MNE managers should not allow themselves to be blinded by BOP gurus, advocating the alleged great benefits of penetrating BOP markets. BOP markets may be especially challenging international expansion targets for MNEs because of large institutional voids, high uncertainty, high “distance” vis-à-vis the home country market and the difficulties of transferring relevant knowledge from one BOP market to another.

This chapter is the first to show that mainstream IB research can be usefully applied to analyze the “real” attractiveness of BOP markets for MNEs. Comparative institutional analysis is proven to provide substantially more insight to make BOP market penetration work than past guru-talk on BOP markets.

The predominance of certain adverse factors has historically de-motivated firms seeking to enter into the bottom-of-the-pyramid (BoP) markets due to the perception that BoP markets are impoverished and therefore unable to afford their products. However, Prahalad’s seminal study on BoP markets as potential sources of wealth may have influenced the mindset of marketers around the world to view the demographic at the BoP as prodigious product markets waiting to be mined. This chapter, therefore, explores how some multinational corporations (MNCs) may have successfully implemented BoP marketing in Nigeria against the backdrop of diffusion of innovation (DoI) theory. The DoI theory tries to explain how and why new ideas, product, structures, or phenomena (innovations), spread across users and social systems. It posits among other things that there are at least five conditions that define the rate of adoption of an innovation, including relative advantage, compatibility, complexity, trialability, and observability. The authors find in the context of case companies, MTN Communications, Promasidor (Cowbell), and Dufil Prima Foods (Indomie) Nigeria that these elements contribute to building a viable explanation for the wide adoption of their products in the Nigerian BoP markets. Regarding the economic viability of BoP markets, the authors find that MNCs may have to embrace a commitment to long-term profitability, focus on economies of scale as a basis for competitiveness, and realize that in BoP markets, defining a marketing model is a continuous process.

Addressing potential markets in emerging countries is an important development in international marketing, and over the last decade research has been energized by the model of the Bottom of the Pyramid (BOP). More recently the focus has shifted away from defining the BOP potential in terms of identifying the market at the BOP, and toward creating a market at the BOP, concurrent with the rephrasing of the potential as the Base of the Pyramid. The Value Flame at the Base of the Pyramid (VFBOP) model discussed here stresses not only that a leap in mindset and analysis is necessary to operate in the BOP, but that principles of mutual value and co-venturing are necessary, that is, not only enter into the BOP but collaborate within the BOP. Twenty-one VFBOP characteristics are summarized into four categories: (1) change the mindset; (2) don’t compete; (3) align all organization activities in pursuit of differentiation; and (4) create and capture new market demand. These characteristics can be a template of considerations for a company when designing and marketing a product or service to profitably meet the demands of the BOP market. To illustrate the VFBOP model and characteristics a case study is presented. Through the VFBOP model it can be seen that enormous opportunities may be available in these emerging economies.

Recent studies in strategy have highlighted both the successes and failures of applying conventional perspectives in strategic management to developing markets. Within this debate, Bottom of the Pyramid (BoP) strategies, aimed at exploiting high-volume, low-margins strata at the bottom of these societies, have particularly drawn interest. We critically examine the emergence and evolution of BoP strategies and compare their anticipated outcomes to some of the empirical evidence. We then draw on the concept of global value chains to usefully extend the BoP concept, and suggest areas for further theory building and empirical research. We offer a typology of BoP ventures, and suggest appropriate levels of public–private engagement to achieve the desired social and economic outcomes.

This contribution discusses how multinational firms could serve poorer consumers in developed regions like Europe and through which business models, beyond the traditional corporate social responsibility (CSR) actions. MNEs have still limited capacity to address poverty in developed countries, notwithstanding some experience they have matured in developing markets and the striking figures of rising poverty in Europe and the United States. This research focuses on a specific issue: the role of MNEs in addressing poverty in developed markets, either leveraging on their previous expertise gained in developing countries or designing novel ad hoc solutions. The capacity of Western multinationals to tackle effectively the challenge of profitably doing business at the base of the pyramid (BoP) represents a controversial issue in literature and an intriguing topic for international business studies. The empirical research is based on three case studies. The companies have already gained experience in targeting BoP markets in developing countries. They are analyzed in order to understand better their approaches and their applicability in Europe.

This chapter draws on the concept of orders of worth to generate understanding into how sustainable, good markets might be enabled at the bottom of the pyramid (BoP). Through an ethnographic study of the efforts of a non-government organisation (NGO) to create spaces where values and value at the BoP are unearthed, articulated, contested and translated into market-making practices. Insights are generated into how interventions to make-markets in sites of extreme poverty become ‘worth the effort’. In keeping with the market studies literature, the authors explore how multiple, contested and reframed needs generate insights into the efforts (and practices) that shape orders of worth in economic life. Orders of worth are the everyday practice of social values that constitute economic value and are framed through the moral values of social worlds as these values are put to work to calculate economic value. This work provides a contribution to the market studies literature through our understanding of the relationship between social and economic values in the creation of orders of worth, by showing how this happens at the BoP. Second, the authors contribute to the BoP literature by showing how places and spaces can be created and used to enable markets to unfold and happen. Finally, the findings contribute to our understanding of the types of practices and market-making devices that interventions might adopt and adapt in order to prod potential actors into action. The chapter identifies three types of enabling practices that make markets possible: connecting, integrating and reclassifying.

This chapter considers social purpose venturing as a vehicle for addressing social exclusion in the rural developing world, illustrated with reference to case examples across a range of East and Southern African countries.

Data was collected during in-depth case study research with social purpose ventures in various African countries. Qualitative research methods were primarily employed including interviews, stakeholder focus groups and observational research.

Six channels through which social purpose ventures contribute to tackling social exclusion amongst rural BoP communities are identified. These include ventures with the BoP as employees, producers, consumers, entrepreneurs, service users and shareholders. Characteristics for successful social purpose ventures are also discussed.

The chapter adds to knowledge in the field of social purpose venturing in the developing world. It identifies various channels through which such ventures help tackle rural social exclusion and also factors influencing their success.

The chapter provides insights for practitioners and policy makers, particularly in relation to facilitating successful social purpose venturing.

This chapter contributes to better practice in rural development in the Global South.

Insights relevant to academic and practitioner audiences are provided, as the chapter addresses a subject area and region that have received limited attention.

Purpose – The aim of this chapter is to explore the existing relation between business activity and sustainability in Base of the Pyramid (BoP) contexts in order to shed light on the role that the business sector may have in poverty alleviation.Design/methodology/approach – Starting with a thorough review of the evolution of the BoP theory, the chapter moves on to critically examine corporate social responsibility (CSR) in poverty contexts, and suggests the adoption of a more comprehensive interpretation of CSR that fully incorporates sustainability – environmentally, economically, and socially – into business operation. Consecutively, the notion of “sustainable enterprise” (Hart, 2010) as an upgraded type of corporation that embraces sustainable development is explored, and is related to the BoP business models known as inclusive businesses (IB). Case study experiences from Latin America (i.e., Colombia) are used to exemplify IB implementation.Findings – The chapter highlights the relevance of IB as sustainable enterprises with the potential of significantly improving the living conditions for most impoverished communities, while being economically profitable and environmentally viable. From a sustainability viewpoint, the greatest challenge is found to be the achievement of a balance between a greater consumption and production at the BoP and the limited environmental capacity of the earth.Originality/value of chapter – Both, BoP and IB are two notions of very recent appearance within business–society literature, making this chapter a valuable contribution for the advancement of scholarly work in the field.

The purpose of this chapter is to call for a better cohesion between development cooperation, on the one hand, and inclusive business, on the other. This contributes to the existing post recessionary debate on development cooperation, in which, (i) traditional aid and partnership effectiveness are being revised and, (ii) the role of the private sector in development is being emphasized. It builds on recent discussions that call for a more strategic use of development cooperation to leverage other development-oriented flows, particularly those coming from the private sector.

The chapter corresponds to a conceptual chapter. Results were obtained through the study and comparison of secondary sources and a literature review. It first explores donor-private sector relations, paying particular attention to the OECD Development Assistance Committee (DAC), and then moves on to the study of inclusive business in relation to development aid.

The study first reflects upon shifts perceived in development cooperation since the Great Recession, and analyses how foreign donors have engaged more widely with businesses for addressing global development challenges. The concept of inclusive business is then introduced, describing how although the development community acknowledges the potential of the private sector as a driving force for development, inclusive business have hitherto been developing, to a great extent, aside of broader development efforts. The final section presents a typology that proposes various ways in which donor agencies may integrate inclusive business support into their private sector programs.

The chapter is of use for both academics and practitioners with an interest in development cooperation and/or inclusive business.

Proposing a conceptual study that tends toward a greater cohesion between inclusive business and development cooperation is a contribution to the literature that has emerged on Base of the Pyramid markets since early 2000s. It is argued that such cohesion may prove valuable for the betterment of public-private relations, turning them more responsive to the challenges of sustainable development in the post-2015 world.