Business Case Studies, Executive Interviews, Miguel Angel Gardetti on Bottom of the Pyramid

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Executive Interviews: Interview with Miguel Angel Gardetti on Bottom of the Pyramid
November 2008 - By Dr. Nagendra V Chowdary


Dr. Miguel Angel Gardetti
Director of the Instituto de Estudios para la Sustentabilidad Corporativa (IESC)


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  • What are BOP Markets? What are their unique characteristics?
    Over the past years the base of the pyramid term has been widely yet inconsistently used. For this reason, a key discussion topic at the BoP Learning Labs Global Network Director Summit (Tilburg University The Netherlands held on June 3 and 4, 2008) was to determine the distinctive features of the BoP strategies and undertakings. The identified critical factors typical of BoP strategies are:

    First of all, the BoP undertakings are based on transformational "business" models at a local level.

    That is, they promote and develop local capabilities and socioeconomic systems in order to create value for the parties. This also means that the business, as a proactive partner, needs to leverage the local players potential for developing successoriented alliances. Based on the above, will it be possible to develop perfectly tailored solutions to real problems in ways which respect the local culture and natural diversity. Second of all, the triple bottom line needs to be integrated into the strategy. A better future will depend on the new paradigm of marrying business with development, fostering social, environmental and economic stability.

    Third, there should be aspiration and potential for scale and replication (inability to help a business grow and expand does not meet the goal of transforming the local society and economy).

    Two other critical factors under review were: Great leap innovation or the theory of disruptive innovation that suggests that the existingmarkets are the wrong place to search for further opportunities for development; and to consider the people living at the base of the pyramid as partners and peers (rather than consumers/producers).

  • Why sudden interest in BOP markets? Is it another fad or is this the new big marketing opportunity?
    The question is much more complex: The decade of globalized economy, privatizations, and free trade has produced, at the very best, mixed results. While the richer countries have grown richer, most nations all over the world cannot refer to the benefits of capitalism. In the developing world, all this contributes to challenging globalizations potential as a precursor of prosperity to a great extent. The antiglobalizationmovement resulted from a combination of considerations such as environmental degradation, inequity, human rights, cultural diversity, and loss of local autonomy. Moreover, many authors assert that the globalization process led by multinational companies over the past decade has a dark side. For instance, they argue that the corporate sector promotes a new commercial monoculture based on the values of Western consumerism, which brings about the impairment of both local cultures and traditions.

    As a result of these and other factors, the gap between rich and poor countries has widened over the past 40 years. Of course, multinational companies are not solely responsible for all this: multilateral agencies have played a leading role which added to these consequences, while corruption has also proved to be a contributing factor. If this dangerous trend persists, development fails to be accelerated, and benefits of economic progress and technology fail to reach people who are currently living in poor conditions, the future will look bleak. Due to the above reasons, capitalism must change. With a new and more inclusive capitalism, the private sector can become a catalyst for sustainable development.

  • Can you please share with our readers what the Base of the Pyramid Learning Lab is all about? What was its origination and what has been its growth so far? Why were these labs set up? What were the objectives?
    The lab that was developed in Argentina in September 2005 consists of a set of companies, NGOs, and members of both the government and academics, that taking into account the huge existing inequality, work jointly to analyze the best way in which the private sector can eradicate poverty as a proactive partner, betting on the potential of local players to cooperate in fostering and jointly promoting local development.

    Each lab participant was selected based on the nature of their relationship with the BoP. Thus the lab has companies that, at a local level, have implemented business strategies in the BoP, others that are developing said strategies, and some others that, while they have not developed said strategies yet, their foreign parent companies have initiatives in such market. The NGOs selected to participate in the lab, are those that, due to their work, are closely connected with poverty. The guest social entrepreneurs belong to Fundación AVINA and Ashoka Emprendedores, which are two organizations that support this concept worldwide. The Members of Government belong to departments whose work mainly focuses on the BoP (Ministry of Work, Ministry of Social Development, and Secretariat of Environment and Sustainable Development). The academia has been defined based on the postgraduate level in private as well as public Universities. Please note that both NGOs and social entrepreneurs are taking part as the first step towards the integration of poor people into the Lab.

1. Bottom of the Pyramid Case Study
2. ICMR Case Collection
3. Case Study Volumes

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