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Fortune at the bottom of the Pyramid

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Hock Tan

on 26 February 2018

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Transcript of Fortune at the bottom of the Pyramid

Fortune at the bottom of the Pyramid
GOAL!
Food for thought .....Muhammad Yunus, Grameen Bank
Thank you!
The Author - C.K. Prahalad
Born and brought up in India
seen poverty
worked for Union Carbide

Studied and taught in America
Introduction
Fortune at the BOP
a good example of doing well by doing good
creating consumers and micro producers
addressing global poverty and income inequality
reduce impact of poverty penalty
customer base - 4 billion!
Less than $2/day
Neglected by business until recently e.g. Unilever
Co creation (CSV)
Broad principles of BOP
formulate win-win situation
create entrepreneur; opportunities
provide access to products and services - inclusive global capitalism
innovative approach is required
BOP Misconceptions
Poor has no purchasing power (PPP larger than combined gdp of japan; uk; germany; france; Italy)
distribution access is problematic (increasing proportion living in urban area. Innovative approach (for rural areas) e.g. Novartis
poor are not brand conscious
communication is difficult
no connectivity
basic economics of bop - small unit packages, low margins per unit but high volume.
Prahalad Principles
1. Price performance
mobile phones, India
cataract operation
banking services e.g Citibank
2 Innovation: Hybrids
iodized salt by HLL
Amul, milk collection
3. Scale of operations
solar panels
4. Sustainable and ecologically friendly
water usage
waste generated
5. Identifying functionality
prosthetics
Point of sale system
6. Process innovation
Aravind eye care
7. Deskilling of work
Cemex, Mexico

8. Educating customers
HUL - washing hands with soap

9. Designing for hostile infrastructure
eChoupals - fluctuation of voltage
10. Interfaces
ATM machines fingerprint recognition

11. Distribution: Accessing the customer
ICICI Bank, India
HLL India using Shakti

12. Challenging conventional wisdom
and learning from the experience at
BOP
BOP - A global opportunity
Local growth opportunities
For example China and India

Learning to grow S to I curve
Local innovation, global opportunity
examples iodised salt; Grameen
Bank; Jaipur Foot; Aravind eye hospital
BOP solutions for developed world
Microfinance
Disease detection Voxiva
system
BOP requires:
Connectivity
Microfinance
Education
Energy
$100 computer
Nano cars - $2000
The future - Social Entrepreneurhip?
Grameen bank
Grameen Danone
Summary of the module thus far ...

Rationale for sustainability - declining resources; radical transparency; increasing expectations; connectivity; feminine values
Move from CSR to Sustainability
Natural capitalism - Hawken; Lovins
Creating shared value (co-creation)
Conscious capitalism
Embedding, creating sustainable value (Laszlo) and blue ocean strategy
Natural resource based view - Hart
Sustainable supply chain - Carter
Greenway Grameen smart stove
Full transcript