‘Base of the pyramid’ markets as incubators for innovations : Implications for innovation processes of internationally operating companies

Abstract

This thesis identifies the enabling factors that are relevant for a company’s BoP innovation process. It aims at visualizing differences and challenges of BoP innovation processes in contrast to generic innovation processes. A literature review which was conducted first identified seven enabling factors for generic innovation processes: customer orientation, rigorous planning & early specification, pre-development activities, formalized project selection, functional competence & cross-functional teams, strong project leader and top management support. These theoretical findings provided the necessary framework for the qualitative, semi-structured interviews that were conducted with two companies, GE Healthcare and Godrej & Boyce, which both recently implemented a BoP project. The empirical results visualized the companies’ BoP innovation processes and suggested the following findings. First, the focus on customer orientation was strengthened as a company’s unfamiliarity with the local context strengthens the importance of exactly understanding the consumers’ needs. Second, rigorous planning & early specification was found not as important as in generic innovation processes due to the novelty of the endeavor and the necessary adjustments in the course of the project. Third, predevelopment activities remain important. Fourth, formalized project selection is found to be one of the most influential factors for a BoP innovation project. Fifth, no difference in significance was found in functional competence & cross-functional team. However, the two dimensions of internationality of the team and proximity to respective decision makers were added. Sixth, the case studies showed that a strong project champion is decisive for a BoP project. Last, top management support was found to be one of the most important factors for a BoP innovation project as adjusting structural factors and strategic orientations is necessary for a BoP project to fully unfold. Furthermore, three additional factors (strategic (re-)orientation of a company, independent business unit and mindsets and work approach) were discussed.

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