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Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits
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Product Description
The world's most exciting, fastest-growing new market is where you least expect it: at the bottom of the pyramid. Collectively, the world's billions of poor people have immense untapped buying power. They represent an enormous opportunity for companies who learn how to serve them. Not only can it be done, it is being done--very profitably. What's more, companies aren't just making money: by serving these markets, they're helping millions of the world's poorest people escape poverty.
C.K. Prahalad's global bestseller The Fortune at the Bottom of the Pyramid, now available in paperback, shows why you can't afford to ignore "Bottom of the Pyramid" (BOP) markets. Now available in paperback, it offers a blueprint for driving the radical innovation you'll need to profit in emerging markets--and using those innovations to become more competitive everywhere. This new paperback edition includes eleven concise, fast-paced success stories from India, Peru, Mexico, Brazil, and Venezuela--ranging from salt to soap, banking to cellphones, healthcare to housing. These stories are backed by more detailed case studies and 10 hours of digital videos on whartonsp.com. Simply put, this book is about making a revolution: building profitable "bottom of the pyramid" markets, reducing poverty, and creating an inclusive capitalism that works for everyone.
Preface xi
About the Author xix
Part I: The Fortune at the Bottom of the Pyramid 1
Chapter 1: The Market at the Bottom of the Pyramid 3
Chapter 2: Products and Services for the BOP 23
Chapter 3: BOP: A Global Opportunity? 47
Chapter 4: The Ecosystem for Wealth Creation 63
Chapter 5: Reducing Corruption: Transaction Governance Capacity 77
Chapter 6: Development as Social Transformation 99
Part II: Business Success Stories from the Bottom of the Pyramid 113
Financing the Poor 115
Aravind Eye Care—The Most Precious Gift 131
Energy for Everyone 137
Agricultural Advances for the Poor—The EID Parry Story 149
Retail for the Poor 159
Information Technology to the Poor 169
The Jaipur Foot Story 187
Health Alerts for All 191
Transparent Government 201
The Annapurna Salt Story 213
Homes for the Poor—The CEMEX Story 221
From Hand to Mouth—The HHL Soap Story 235
Part III: On the Web at Whartonsp.com
Video Success Stories
Casas Bahia
CEMEX
Annapurna Salt
Hindustan Lever
Jaipur Foot
Aravind Eye Care
ICICI Bank
ITC e-Choupal
EID Parry
Voxiva
E+Co/Tecnosol
Andhra Pradesh
Full Success Case Stories in pdf format
The Market at the Bottom of the Pyramid
Known Problems and Known Solutions: What Is the Missing Link?
Known Problems and Unique Solutions
Known Problems and Systemwide Reform
Scaling Innovations
Creating Enabling Conditions for the Development of the Private Sector
The EID Parry Story
Biographies of the Researchers/Writers of the Success Case Stories from The Fortune at the Bottom of the Pyramid 247
About the Video Success Stories 255
Index 257
Product Details
- Amazon Sales Rank: #312545 in Books
- Published on: 2006-04-20
- Original language: English
- Number of items: 1
- Binding: Paperback
- 304 pages
Editorial Reviews
From the Back Cover
The world's most exciting, fastest-growing new market is where you least expect it: at the bottom of the pyramid. Collectively, the world's billions of poor people have immense untapped buying power. They represent an enormous opportunity for companies who learn how to serve them. Not only can it be done, it is being done--very profitably. What's more, companies aren't just making money: by serving these markets, they're helping millions of the world's poorest people escape poverty.
C.K. Prahalad's global bestseller The Fortune at the Bottom of the Pyramid, now available in paperback, shows why you can't afford to ignore "Bottom of the Pyramid" (BOP) markets. Now available in paperback, it offers a blueprint for driving the radical innovation you'll need to profit in emerging markets--and using those innovations to become more competitive everywhere. This new paperback edition includes eleven concise, fast-paced success stories from India, Peru, Mexico, Brazil, and Venezuela--ranging from salt to soap, banking to cellphones, healthcare to housing. These stories are backed by more detailed case studies and 10 hours of digital videos on whartonsp.com. Simply put, this book is about making a revolution: building profitable "bottom of the pyramid" markets, reducing poverty, and creating an inclusive capitalism that works for everyone.
Preface xi
About the Author xix
Part I: The Fortune at the Bottom of the Pyramid 1
Chapter 1: The Market at the Bottom of the Pyramid 3
Chapter 2: Products and Services for the BOP 23
Chapter 3: BOP: A Global Opportunity? 47
Chapter 4: The Ecosystem for Wealth Creation 63
Chapter 5: Reducing Corruption: Transaction Governance Capacity 77
Chapter 6: Development as Social Transformation 99
Part II: Business Success Stories from the Bottom of the Pyramid 113
Financing the Poor 115
Aravind Eye Care—The Most Precious Gift 131
Energy for Everyone 137
Agricultural Advances for the Poor—The EID Parry Story 149
Retail for the Poor 159
Information Technology to the Poor 169
The Jaipur Foot Story 187
Health Alerts for All 191
Transparent Government 201
The Annapurna Salt Story 213
Homes for the Poor—The CEMEX Story 221
From Hand to Mouth—The HHL Soap Story 235
Part III: On the Web at Whartonsp.com
Video Success Stories
Casas Bahia
CEMEX
Annapurna Salt
Hindustan Lever
Jaipur Foot
Aravind Eye Care
ICICI Bank
ITC e-Choupal
EID Parry
Voxiva
E+Co/Tecnosol
Andhra Pradesh
Full Success Case Stories in pdf format
The Market at the Bottom of the Pyramid
Known Problems and Known Solutions: What Is the Missing Link?
Known Problems and Unique Solutions
Known Problems and Systemwide Reform
Scaling Innovations
Creating Enabling Conditions for the Development of the Private Sector
The EID Parry Story
Biographies of the Researchers/Writers of the Success Case Stories from The Fortune at the Bottom of the Pyramid 247
About the Video Success Stories 255
Index 257
About the Author
“…he may well be the most influential thinker on business strategy today.”
BusinessWeek
Internationally recognized as a specialist on corporate strategy and value-added of top management in multinational corporations, C.K. Prahalad has consulted with many of the world’s foremost companies. In addition to being the Harvey C. Fruehauf Professor of Business Administration at the University of Michigan, he serves on the board of Directors of NCR Corp., Hindustan Lever Ltd., and the World Resources Institute.
A prolific author as well, his book, Competing for the Future (co-authored with Gary Hamel), was a national bestseller and was the Best Selling Business Book of the Year in 1994. He also co-authored Multinational Mission: Balancing Local Demands and Global Vision (in 1987 with Yves Doz) and The Future of Competition: Co-Creating Unique Value with Customers (in 2004 with Venkat Ramaswamy).
He has been named among the top ten management thinkers of the world in every major survey for over ten years.
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.
