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The Fortune at the Bottom of the Pyramid

C. K. Prahalad argues that companies must revolutionize how they do business in developing countries if both sides of that economic equation are to prosper.

Photo of Anne-Laure Fayard
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The bottom of the pyramid is an influential book which does not focus on social businesses per se, but suggests a positive interdependency between the private sector and the low-income communities' economic development. It might be interesting to think of this an as option. In fact, several inspirations show projects with international businesses were involved.


another interview by Prahalad: http://www.thinkers50.com/video/33

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Photo of Steaphan Markotany

That last line is great "create an interdependent world, that lives in peace"... I think this is a great example! Thankyou!

I do feel a slight bit of conflict here, because he is still discussing profit driven market development. But I think the one point that this addresses really well is for people to feel good about themselves. With charity, and even with social business, I think these people can feel like the victoms, recognise themselves as charity cases etc... Whereas, this model produces a way for them to truly feel empowered. Excellent!

Photo of Anne-Laure Fayard

Hi Stephan, regarding the tension you highlight, I have talked a lot about it with a friend of mine who was teaching an MBA elective on developing countries and referring to Prahalad's work. When I expressed the same unease, my friend's reply was that revenue and profit are the drivers of corporations and thus if you can't create such a win-win situation, it will only be charity and their involvement will vary depending on how good the year is. Hence, you can't get them to really engage in a sustainable way. I guess it is a very pragmatist perspective which assumes that you can't change the motivations of businesses, but you can "trick" them so that they get involve in "doing good". Does this make sense?
Moreover, as some studies show some of the products developed in developing countries for low-income communities then become sources of innovation in developing countries (here the empowerment comes back again).
cheers,
al

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DeletedUser

Stephen, i have been puzzled by his concept from the day i knew about it. I am still confused.

Let me give you an example- In the case of his strategy for Unilever, They are now selling shampoos and other FMCG products in small sachets. The poor get access to these products, which they cannot afford for in larger volumes. But, they actually pay more per volume (just like micro finance borrowers paying higher interest rates). So, basically Unilever sells even more volume as a result of the huge population needing such package sizes and they make more money than ever.

It is certainly a win for Unilever, but the poor only get access to FMCG products, it is not really a big win in my view.

But, i slightly feel, these large firms interpret his concept to suit their convenience. What do you reckon?

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