For such purpose, it is necessary to
build an ecosystem that understands
on a cultural basis the area inwhich it
will be developed. Both the
ecosystem dynamism and a focus on
the "local" aspect are essential for the
development of the BoP.
This requires the use of the
imagination to forge alliances and
make co operative approaches that
blend the capabilities of business
with those of both the civil society
and the public sector in order to
speed up development, even in the
poorer regions.
The Argentina BoP Lab provides a
scenario to develop trust and ideas in
which the four involved sectors are
attempting to gradually overcome
their barriers, on the one hand, while
beginning to develop the capabilities
required for the BoP, on the other.
This lab encourages divergent
thinking to reach a new level of
thinking and analysis. Thus,
companies are slowly beginning to
listen to voices seldom heard in an
attempt to develop their "native
capability". Moreover, NGOs are
beginning to think in terms of
"corporate" management, while the
public sector starts learning and
taking part in a model different from
that of assistance delivery, analyzing the best way to create a suitable
environment for the BoP. The
academia is slowly beginning to see
the BoP as a necessary element for
business leader training.
Several challenges lie ahead for the
Argentina BoP Lab. The first
challenge is to determine how poor
people will be integrated in view of
the "anti-enterprise" culture, typical
of this sector and historically fostered
by the political power. The second
one is to continue building a local and
common view of the BoP, addressing
questions such as: What are the local
needs? What kind of knowledge
should be generated? How could this
process evolve in Argentina?
Other challenges may be posed in
different questions: How can a
company turn its strategy at the BoP
into a competitive advantage? What
kind of business model will work?
How can we build trust in the
informal economy? What kind of
education do business schools need?
How does new technology integrate?
How can we develop the educational/
social infrastructure? Moreover, from
the regulatory and policy formulation
viewpoint, if entering the markets at
the base of the pyramid is a good
choice for both development and
business, what does it take to turn
this into a reality?
Therefore, the Argentina BoP lab
contributes to establishing the
necessary learning process which
results in the joint development of
ideas and opportunities that
strengthen the capabilities of the
parties involved.
-
The three powerful themes
captured in CK Prahlad's Fortune at
the Bottom of the Pyramid:
Eradicating Poverty Through
Profits are There is much
untapped purchasing power at the
bottom of the pyramid. Private
companies can make significant
profits by selling to the poor; By
selling to the poor, private companies can bring prosperity to
the poor, and thus can help eradicate
poverty, and; large MNCs should
play the leading role in this process
of selling to the poor How can
MNCs play a leading role in
reaching out to the BOP customers?
It is important to bear in mind what
Erik Simanis, Stuart Hart and Duncan
Duke state in their paper "The Base of
the Pyramid Protocol. Beyond "Basic
Needs" Business Strategies:
Reducing the complex meaning of
"poverty alleviation" and
"development" to the managerially
accepted language of "customer
needs" and "product development"
gave managers a way to get their arms
around the challenge, but it also led
them to adopt a strongly
"economistic" notion of poverty. This
mental image has been further
reinforced and validated by
corporations' traditional skill sets and
capabilities. The lackluster
development impacts of initial BOP
ventures have led the nonprofit and
public sectors, which initially
extended cautious support for the
concept, to voice increasing
dissatisfaction. Some almost seem to
feel they were duped, and that the
BOP is little more than a strategy for
"selling to the poor."
"In addition, attaching the term
"market" to themore than four billion
people in the BOP economic
classification has helped companies
flip their mental switches and begin
viewing the poor like any other
customer with needs but it has also
imputed to the BOP a kind of
coherence that does not exist. The
BOP is not one homogenous market;
in fact, it is not a market at all. The
BOP is a demographic classification.
As a result of this misunderstanding,
initial corporate efforts to serve the
BOP have relied on the same market
development approaches, tools, and
managerial frameworks used to serve
real consumers in real markets.Consequently, most first-generation
corporation BOP ventures have failed
to deliver any profits, much less a
fortune."
