With great challenges come great opportunities.
But you already knew that. Otherwise you wouldn't be here.
bop value creation
There is enormous untapped potential at the bottom of the pyramid. And while the approach and context may be different from investments in traditional markets, at the core the principles remain the same, and the opportunity for growth at scale is inspiring if people are given the chance to create value.
*Needs editing and citation to https://hbr.org/2011/06/the-globe-segmenting-the-base-of-the-pyramid
Companies can provide value to consumers by directly addressing their needs for services such as clean water, better sanitation, education, and credit. A more indirect way is to introduce innovations that enable people to devote fewer resources to basic activities and more to other pursuits. If all their costs and hours are fully taken into account, people at the base of the pyramid often turn out to be paying premiums for, and wasting a great deal of time on, products and services that are shoddy at best. So there’s significant room for innovative businesses to provide good-quality offerings with lower overall usage costs and greater convenience than those of present alternatives. The result: a profound effect on productivity.
When a company views base-of-the-pyramid residents as coproducers, it provides them with work and income. A multinational might, for instance, give farmers technical knowledge to upgrade the quality of their output and reward them with greater monetary returns, as Nestlé has done with the sourcing of milk from small dairy farmers in Asia and Mars has done with cocoa farmers in West Africa. With a little training, people at the base of the pyramid can also take part in basic production and assembly jobs or in activities such as transportation, distribution, and retailing—bridging the “last mile” to the customer.
A significant portion of the people at the base of the pyramid, primarily in the extreme-poverty segment, are most appropriately treated as clients. The reality is that they need “agents,” so to speak, to garner resources on their behalf. The government can serve as an agent, as can a civil society institution, a community organization, or a commercial enterprise.
THE BoP Market
Total annual household income of $5 trillion a year establishes the BOP as a potentially important global market. Within that market are significant regional and national variations in size, population structure income
distribution, and other characteristics.
*needs editing and citation for http://www.ifc.org/wps/wcm/connect/3c2787004cc75e6094d7b59ec86113d5/Pub_009_The%2BNext%2B4%2BBillion.pdf?MOD=AJPERES
For-benefit enterprises – market-driven mechanisms that blend profit and purpose - have the capacity to provide distinct economic opportunities to those living in poverty.
Such enterprises are the innovation hubs of emerging markets and are already creating sustainable impact around the world, such as:
Activating unused assets
Increase subsistence farmer’s income by activating unused assets in the form of their unused land to grow trees and compete in the industrial tree farming market.
Increase women's earning potential
Connect rural communities to affordable and essential goods and increase women’s earning potential by expanding last-mile distribution support.
Opening consumer markets
Link artisans to a global marketplace to increase their earnings by ensuring fair prices and opening consumer markets.