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1 – 10 of over 3000Paul N. Gooderham, Svein Ulset and Frank Elter
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…
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.
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Wasana Jayawickramarathna, Kaleel Rahman, Rajendra Mulye and Tim Fry
The market-based approach to catering for the poor mainly focusses on companies making profits while helping the poor enhance their lives. This concept presented the possibility of…
Abstract
The market-based approach to catering for the poor mainly focusses on companies making profits while helping the poor enhance their lives. This concept presented the possibility of there being a ‘fortune’ to make at the Bottom of the Pyramid (BoP) market that was an opportunity for both businesses and consumers. The notion of the BoP market has been widely studied using urban and rural contexts as distinct classifications; yet many argue that the opportunity does not in fact exist in the rural BoP markets. In this chapter the authors examine the prospects in the rural BoP in Sri Lanka through a qualitative study using insights provided by industry practitioners who operate at the BoP level. Findings show that a large percentage of the income of multinational companies is derived from rural BoP markets. Compared to the urban sector, the rural BoP market indicates relatively higher disposable income and is viewed as an attractive market segment by industry practitioners. The findings also show that rural BoP people have more resources and skills than their urban counterparts, although the former commonly have lower levels of education. Moreover, the youth segment in both the urban and rural BoP markets was found to heavily consume social media. The authors conclude their discussion by providing several key proposals for organisations looking to seize opportunities in this market.
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The purpose of this paper is to examine the social bottom line in subsistence markets or base of the pyramid. This examination aims to suggest that social strategies for the…
Abstract
Purpose
The purpose of this paper is to examine the social bottom line in subsistence markets or base of the pyramid. This examination aims to suggest that social strategies for the second bottom line should be focused at the community level in measurement, assessment and impact.
Design/methodology/approach
A discussion of the double bottom line is presented. Social strategies are then discussed in terms of impact assessment at the community level and an impact assessment framework is developed reflective of the subsistence marketplace perspective. Implications are discussed in terms of poverty alleviation in subsistence markets and business
Findings
This examination suggests social strategies for the second bottom line should be focused at the community level in measurement, assessment and impact. Focusing social strategies at the community level reframes the role of firms and promotes a business in service of the community approach. Assessing impact at the community level creates a long‐term sustainable focus to business in subsistence markets. This perspective is a more holistic view that incorporates the social, economic and environmental ecology of the community from a multi‐generational perspective that requires entrepreneurs to commit their life's work to developing and servicing the community they live in. Using “And beyond Africa” as a case example of the community‐level social strategy the theory and practice are integrated and the conceptual ideas can be understood as a holistic reflection of the community. Further, examining how social strategies at the community level are understood in terms of the individual and humanity level creates greater awareness of the importance of a social strategy at the community‐level. Suggesting that a social strategy focused on the community level can make the largest impact on all three levels (individual, community and humanity). By considering more than customer impact, a social strategy can look at a business's impact on the community and better understand its impact on humanity. This conclusion changes the role of the entrepreneur and business to be in the service of the community.
Originality/value
This paper develops a community‐level social strategy view to the double‐bottom line in subsistence markets or base of the pyramid.
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Dennis A. Pitta, Rodrigo Guesalaga and Pablo Marshall
The purpose of this article is to examine the bottom of the pyramid (BOP) proposition, where private companies can both be profitable and help alleviate poverty by attending…
Abstract
Purpose
The purpose of this article is to examine the bottom of the pyramid (BOP) proposition, where private companies can both be profitable and help alleviate poverty by attending low‐income consumers.
Design/methodology/approach
The literature on BOP was reviewed and some key elements of the BOP approach were proposed and examined.
Findings
There is no agreement in the literature about the potential benefits of the BOP approach for both private companies and low‐income consumers. However, further research on characterizing the BOP segment and finding the appropriate business model for attending the BOP can provide some answers to this issue.
Practical implications
The article provides some guidelines to managers as to how they need to adapt their marketing strategies to sell to the BOP market, and what type of partnerships they need to build in order to succeed.
Originality/value
The article presents a thorough analysis of the key elements involved in the BOP initiative: companies' motivations, characterization of the BOP consumers, and the business model to attend the BOP.
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Bianca Maria van Niekerk, Mornay Roberts-Lombard and Nicole Cunningham
This study aims to explore the impact of store atmospherics on urban bottom-of-the-pyramid consumers’ behavioural intentions to purchase apparel in an emerging African market…
Abstract
Purpose
This study aims to explore the impact of store atmospherics on urban bottom-of-the-pyramid consumers’ behavioural intentions to purchase apparel in an emerging African market context. This study also considers purchase antecedents to attitude, perceived behavioural control and social norms as determinants of urban bottom-of-the-pyramid consumers’ apparel behavioural intentions.
Design/methodology/approach
Using non-probability sampling, specifically purposive and interlocking sampling, data collection was secured from 881 economically active Namibian urban bottom-of-the-pyramid respondents through interviewer-administered questionnaires. Covariance-based structural equation modelling assessed the significant relationships among all constructs in the conceptual model.
Findings
This study found that for favourable apparel behavioural intentions of urban bottom-of-the-pyramid consumers to occur, apparel retailers should emphasise trust, perceived awareness and self-identity through apparel assortment and groupings, easy-to-read visible signage, together with competent, friendly and respectful sales personnel in their store atmospherics.
Practical implications
The findings of this study may guide apparel retailers in other emerging African markets to develop regional integration, market-based solutions and inclusive economic growth focusing on “non-essential” products, such as apparel, among urban bottom-of-the-pyramid consumers.
Originality/value
This study expands the intellectual boundaries of urban bottom-of-the-pyramid consumers’ behavioural intentions towards “non-essential” products. The theoretical framework supports the integration of both the stimulus-organism-response model and the theory of planned behaviour into one single model for empirical investigation. Additionally, adopting a novel theoretical framework helped identify the impact of store atmospherics from a bottom-of-the-pyramid perspective in an emerging African market context, such as Namibia.
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Jenny Hillemann and Alain Verbeke
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…
Abstract
Purpose
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.
Design/methodology/approach
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.
Findings
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.
Research implications
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.
Practical implications
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.
Originality/value
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.
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Felicia Naatu, Ilan Alon, George Kofi Amoako and Dekuwmini Mornah
This study aims to fill the gap on proenvironmental behavior studies among consumers in bottom of the pyramid (BOP) market by examining the relationship between values, beliefs…
Abstract
Purpose
This study aims to fill the gap on proenvironmental behavior studies among consumers in bottom of the pyramid (BOP) market by examining the relationship between values, beliefs and norms among Ghanaian consumers.
Design/methodology/approach
A sample of 324 Ghanaian consumers (responses rate of 64%) was used to estimate the model. The data was analyzed using maximum likelihood robust approach of Lavaan package for structural equation modeling in R.
Findings
The findings show that there is no significant relationship between values and the new ecological worldview, which also does not affect awareness of environmental consequences. However, awareness of consequences, likely based on personal experiences, significantly impacts perceived ability to reduce threats to the environment. Ghanaian consumers are mainly influenced by personal experiences with local environmental consequences that affect their perceived ability to reduce threats to their environment and their willingness to engage in proenvironmental behavior. The study supports the argument that proenvironmental behavior is the result of complex decision-making that might be influenced by a country’s economic situation, infrastructure, culture and institutions.
Research limitations/implications
This study focuses on a single country in Africa. More studies are needed among other base of the pyramid countries, and in comparison to developed countries’ consumers.
Originality/value
The study adds to the limited knowledge regarding sustainable consumption in the neglected context of the bottom of the pyramid market.
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Driving economic development at the bottom of the pyramid (BOP) is an enduring global challenge. While the market-based approach places hope on entrepreneurship as a major impetus…
Abstract
Purpose
Driving economic development at the bottom of the pyramid (BOP) is an enduring global challenge. While the market-based approach places hope on entrepreneurship as a major impetus to drive the underdeveloped economy, the performance of entrepreneurial businesses and their impact on poverty reduction are sometimes below expectations. This paper seeks to examine the factors that may be hindering entrepreneurship within the BOP context. This paper presents preliminary answers and provides research suggestions related to this question.
Design/methodology/approach
In order to identify the reasons behind the underperformance of entrepreneurship at the BOP, a comprehensive literature review was conducted to see what is already known about this puzzle.
Findings
By reviewing extant literature, four clusters of factors were found to shape entrepreneurial activities at BOP: (1) Individual-level factors may be restraining entrepreneurial activities within BOP context, (2) gender inequality at BOP is hindering female entrepreneurship, (3) insufficient institutional support is holding back entrepreneurial activities in BOP and (4) business development initiatives are making multi-faceted impacts on entrepreneurial activities in BOP.
Originality/value
This paper contributes to theory in that it is the first comprehensive review of literature on constraints of entrepreneurship in the context of BOP. In investigating influential factors of entrepreneurial success in the BOP context, the authors recognize four major influential forces that are shaping entrepreneurial processes at the bottom of the pyramid and further propose three directions of future research that are worthy for further exploration.
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Antonella Zucchella and Serena Malvestito
This contribution discusses how multinational firms could serve poorer consumers in developed regions like Europe and through which business models, beyond the traditional…
Abstract
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.
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Sofie Van den waeyenberg and Luc Hens
The purpose of this study is to examine which changes companies need to implement in their transactional marketing strategy to sell to the poor when launching a product innovation…
Abstract
Purpose
The purpose of this study is to examine which changes companies need to implement in their transactional marketing strategy to sell to the poor when launching a product innovation in low‐income countries.
Design/methodology/approach
The paper confronts the literature on the “bottom of the pyramid” with the diffusion of innovations theory in order to identify the country characteristics that call for marketing changes when entering low‐income markets. The authors investigate for one case (the Tata Nano) whether – and how – the company implements changes to respond to these conceptually identified challenges. The case study is systematically analysed and structured according to Kotler's four Ps.
Findings
The case shows that companies can create products with functionality and cost advantage for the poor without compromising on safety and comfort. Creating an innovative distribution system pushes costs and builds trust between the company and the customer.
Research limitations/implications
The study examines one case from the automobile industry. Marketers would benefit from multiple case studies.
Originality/value
The study's originality springs from the confrontation between the bottom of the pyramid and the diffusion of innovations theories. The study is valuable to marketers targeting the bottom of the pyramid. The case study is interesting because the industry (automobile) surprisingly targets a poorer non‐traditional customer base (the upper bottom of the pyramid).
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