Designing the Supply Chain for Success at the Bottom of the Pyramid

Abstract

The bottom of the pyramid—that is, the world's four billion consumers who live on $5 or less per day—is one of the last untapped markets for multinational companies (MNCs) to drive revenue and profit growth. However, most MNCs have found it difficult to make money “solving the pressing needs of low‐income communities.” We explore why the bottom of the pyramid has become a strategic focal point. We also identify and discuss fundamental differences and trade‐offs MNCs encounter in meeting the demands of the world's lowest‐income consumers. Drawing on the experience of exemplar case studies, we describe how MNCs can leverage resources to build the infrastructures needed to think differently about how to measure financial performance, design products differently to leverage both customization and standardization, and deliver differently to compensate for infrastructural deficiencies. Finally, given much of the product acceptance‐and‐profitability challenge falls under the purview of supply chain decision makers, we call for research in specific operational and relational domains to help companies design supply chain networks and processes for success at the bottom of the pyramid.

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