Product Description

“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. Drawing on a wealth of case studies, his compelling new book offers an intriguing blueprint for how to fight poverty with profitability.”

--Bill Gates, Chairman and Chief Software Architect, Microsoft (2004)

 An idea can change the world...

• How to serve the world’s poorest people and make a profit
• New strategies and tactics for building
  winning businesses in today’s emerging markets
• New bottom of the pyramid trends in technology, healthcare, consumer goods, finance, and beyond
• Insights from top CEOs succeeding in emerging markets
• New and updated case studies--from Jaipur Rugs’ revolutionary supply chain to Reuters’ data services for farmers

Five years ago, C.K. Prahalad’s The Fortune at the Bottom of the Pyramid showed companies how they could reignite profits and growth by serving the world’s five billion poorest people. Hundreds of firms have successfully taken that path--building large, profitable businesses that are reducing poverty and eliminating human misery at the same time.

Now, Prahalad has updated his extraordinary book to reflect the lessons of the past five years: business-building strategies, techniques, and innovations proven to work in emerging markets. The fortune at the bottom of the pyramid: doing well by doing good or doing good by doing well!

Inspired by C.K. Prahalad’s breakthrough insights in the original edition of The Fortune at the Bottom of the Pyramid, a wide variety of firms are identifying, building, and profiting from new markets among the world’s poorest people--while at the same time helping eliminate poverty and human misery. Five years after this book’s first publication, Prahalad’s ideas are no longer isolated instances of innovations.  They are proven, widely practiced “reality.”

In this 5th Anniversary Edition, Prahalad updates his book to give readers a picture of how this idea is being implemented in poor regions around the world.

Prahalad also offers an up-to-the-minute assessment of key questions such as: Is there truly a market? Is there scale? Is there profit? Is there innovation? Is this a global opportunity? Five years ago, executives could be hopeful that the answers to these questions would be positive. Now, as Prahalad demonstrates, they can be certain of it.

• Solving the unique problems faced by bottom of pyramid customers
  How to make a profit by helping people escape poverty and misery
• Breakthrough forms of innovation for emerging markets
  From rugs to cellphones, finance to energy, supply chains to state-of-the-art technology
• Building new ecosystems for wealth creation
  You can’t do it alone--but you can do it together
• Scaling up to impact the enterprise--and society
  Beyond “micro-businesses” and prototypes: large presence, large wins

The CD included with the book includes video case studies and three bonus PDF case studies. Bonus videos and case studies, in addition to those on the CD, can be found on the book's website, www.whartonsp.com/prahalad.

Product Details

• Amazon Sales Rank: #40468 in Books
• Published on: 2009-10-01
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 432 pages

From the Back Cover
Drawing on Prahalad's breakthrough insights in The Fortune at the Bottom of the Pyramid, great companies worldwide have sought to identify, build, and profit from new markets amongst the world's several billion poorest people, while at the same time helping to alleviate poverty. Five years after its first publication, this book's ideas are no longer "theory": they are proven, profitable reality. In the 5th Anniversary Edition, Prahalad thoroughly updates his book to reveal all that's been learned about competing and profiting "at the bottom of the pyramid." Prahalad outlines the latest strategies and tactics that companies are utilizing to succeed in the developing world. He interviews several innovative CEOs to discuss what they've learned from their own initiatives, including the Unilever business leader who's built a billion-dollar business in India. You'll find a new case study on Jaipur Rugs' innovative new global supply chain; updates to earlier editions' key cases; and up-to-the-minute information on the evolution of key industries such as wireless, agribusiness, healthcare, consumer goods, and finance. Prahalad also offers an up-to-date assessment of the key questions his ideas raised: Is there truly a market? Is there scale? Is there profit? Is there innovation? Is this a global opportunity? Five years ago, executives could be hopeful that the answers to these questions would be positive. Now, as Prahalad demonstrates, they can be certain of it.

About the Author

C.K. Prahalad is Paul and Ruth McCracken Distinguished University Professor of Strategy at the Ross School of Business, The University of Michigan. He is a globally recognized management thinker. Times of London and Suntop Media elected him as the most influential management thinker alive today in 2007. He is coauthor of bestsellers in management such as Competing for the Future, The Future of Competition, and The New Age of Innovation. He has won the McKinsey Prize for the best article four times. He has received several honorary doctorates, including one from the University of London and the Stevens School of Technology. He has worked with CEOs and senior management at many of the world’s top companies. He is also a member of the Board of NCR Corporation, Pearson PLC., Hindustan Unilever Ltd., The World Resources Institute, and The Indus Entrepreneurs (TiE).

Customer Reviews

How to eradicate poverty with profits
As Prahalad explains in his Preface, he wrote this book to suggest and explain a new approach by which to solve the social and economic problems of 80% of humanity. His approach would mobilize the resources, scale, and scope of multinational corporations (MNCs) -- their investment capacity -- in a co-creative partnership with localized nongovernmental organizations (NGOs) in order to formulate and then implement"unique" solutions to the problems of 4 billion people who live on less than $2 a day at the bottom of the "pyramid" to which the book's title refers. "The process must start with respect for Bottom of Pyramid consumers as individuals. The process of co-creation assumes that consumers are equally important joint problem-solvers....New and creative approaches are needed to convert poverty into an opportunity for all concerned. That is a challenge."

Prahalad carefully organizes his material within three Parts. First, he provides a framework for the active engagement of the private sector and suggests a basis for a profitable win-win engagement. He identifies all manner of adjustments, accommodations, and (yes) sacrifices each of the "players" - MNCs, NGOs, and the poor themselves -- must be willing to make to ensure the success of the process. Next, he carefully and eloquently examines 12 case studies which involve a wide variety of businesses, each an exemplar of innovative practices, "where the BOP is becoming an active market and bringing benefits far beyond just products to consumers." All of the companies share the same concern: "They want to change the face of poverty by bringing to bear a combination of high-technology solutions, private enterprise, market-based solutions, and involvement of multiple organizations." As for Part III, it is provided as a CD which consists of 35 minutes of video success stories filmed on location in the BOP in India, Peru, Mexico, Brazil, and Venezuela.

Of special note is the fact that the various stories are told almost entirely from the perspective of BOP consumers, the so-called poor. As Prahalad points out, they get products and services at an affordable price, "but more important, they get recognition, respect, and fair treament. Builting self-esteem and entrepreneurial drive at the BOP is probably the most enduring contribution that the private sector can make." As this book's subtitle correctly suggests, the ultimate objective is to eradicate poverty through profits...initiating and then sustaining what will be in fact, a win-win-win engagement of MNCs, NGOs, and the poor themselves.

Of special interest to me is what Prahalad has to say about innovation for BOP markets which must become "value-centered" from the consumer's perspective. He identifies and then rigorously examines 12 principles for innovation in those markets such as "creating a new price performance envelope" and "education of customers on product usage." The BOP focuses attention on both the objective and subjective performances of the given product or service. Moreover, it must "also focus on the need for 30 to 100 times improvements in price performance. Even if the need is only for 10 to 20 times improvement, the challenge is formidable."

To his great credit, Prahalad has a compelling vision but he also has neither illusions nor delusions about the difficulty of fulfilling that vision by taking the "new approach" he recommends in this book. His vision is bold, indeed of global proportions,. However, his feet are planted firmly on the ground at the bottom of an enornmous pyramid, one whose complexities are exceeded only by entrepreneurial opportunities to help solve the social and economic problems of 80% of humanity. Given the importance and the urgency of the various issues which Prahalad explores so brilliantly in this book, there seem to be no acceptable alternatives to the approach he proposes.

Those who share my high regard for this book are urged to check out Vijay Mahajan and Kamini Banga's The 86 Percent Solution : How to Succeed in the Biggest Market Opportunity of the Next 50 Years and Kenichi Ohmae's The Next Global Stage: The Challenges and Opportunities in Our Borderless World.

Unperceived Profits and Business Models for Serving the Poor
Poor people in developing countries are at the bottom of Maslow's hierarchy. They are often focusing on scratching out the most fundamental needs for food, clean water, shelter and a chance to earn a living to provide for those same needs. Economic statistics suggest that they have no money to spend, and many companies act as though the poor don't exist.

C.K. Prahalad and his graduate student collaborators strive to make a different case. Large companies can earn good profits by providing solutions to those problems the poor have that are most costly to them economically. Solving the problems then generates spendable income that will find its way to the large company. A good example comes in creating reasonable cost credit and access to futures markets to farmers so they earn more profits. The inefficient system that most go through now simply clips them like the feudal lords did on their domains.

The strength of the book comes in its detailed case histories which I found to be much more revealing than the primary text. In fact, the text seemed sometimes almost to be at odds with the main points of the case histories. If you find you are pressed for time, read the case histories and skip the text. There is also a brief CD to help illustrate the cases. Some of the cases are only on the CD so be sure to watch it.

I especially found the cases of Aravind Eye Care, CEMEX, Jaipur Foot, ITC e-Choupals and Voxiva to be interesting. These are essentially business model innovation stories, something that interests me very deeply. I learned from these cases how using local people can eliminate unnecessary overhead and that adapting the business model to the situation requires the local perspective of the poor . . . not that of the executives of a large company.

One reason that the main text reads a little strangely is that if everyone focused just at the bottom of the poorest consumers you would have too many companies working on the same problems (clean water, hygiene, overcoming simple forms of disease, etc.). It looked to me like the best business areas were ones that catered to those further up the ladder economically . . . but who were still poor. I was especially fascinated by how the Aravind solution is so powerful that people will be coming to India from the developed world to have their cataracts treated . . . and will save money even after paying for the travel costs! In this way, poor countries could become laboratories for better business models that could be transferred at least in part to wealthier people and countries.

I was also surprised not to see any material in here about Philip Morris, Coca Cola and Gillette who have been selling their products to the poorest people around the world for decades. When I first wanted to learn about the problem defined by this book, I went to visit those countries and learned many helpful answers that are only partially captured by this book.

Finally, I felt like the book makes a mistake in primarily looking at cases involving quite large companies. The bulk of innovation comes from much smaller firms. What role can these organizations plan in partnering with poor consumers around the world to create better business models and products? Genius isn't determined by whether you are born rich or poor. How can we tap into the potential of genius in more ways?

gives a different perspective to the poor
I have visited the aravind eye hospital described in this book and I am from India. This book opens your mind to the possibilites that are available to anyone investing in an upcoming economy like India. This is surely a must read for multinational companies hoping to sell in markets like India.

Higher levels of technology are needed and not lower; though costs should be lower- for eg if you are a bank manager and want to provide a ATM machine in rural areas where people are illiterate - introduce retina scans or fingerprint scans rather than PIN numbers. This way you can get the poor to use your bank. In large enough numbers this will be profitable(india and china can benefit from these innovations as they have strength in numbers)The trick is to create a robust scanner with minimal costs.

The future is in these markets for most big companies as the growth oppurtunities in the developed world are stagnating- ignore these markets at your peril. These poor peple will over time become middle class and if they know your company now - in 10-20 years time they will stay loyal to your company. In addition prahalad shows how you can be profitable in the immediate term as well.