Serving poor people in rich countries: the bottom-of-the-pyramid business model solution

Jaques Angot · Loïc Plé

86 citations0/0 files storedJournal of Business Strategy

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Innovation and Socioeconomic Development Business Strategies and Innovation Service and Product Innovation

Abstract

Purpose – The purpose of this paper is to suggest that firms should transpose bottom-of-the-pyramid (BOP) strategies to top-of-the-pyramid (TOP) countries through adapted business models, noting that strategies usually apply to developing countries. This would enable them to address the consequences of the economic crisis that has increased the number of poor and financially constrained customers in developed countries. Design/methodology/approach – This is a conceptual article based on current research and multiple examples from real-world companies that have implemented BOP business models. These are viewed from the angle of frugal innovation, a fresh perspective on innovation as an outcome and process, which means innovating while significantly economizing the use of scarce resources. Findings – The paper explains how firms should adapt the three dimensions of their business models (value proposition, resources and competences and organization) to transpose BOP business models to TOP countries. Limitations and advantages of this transposition are also detailed. Research limitations/implications – A lack of prior research on how firms can confront poverty in TOP countries is emphasized. Further studies are needed to help firms adapt to the new economic conditions in TOP countries. Practical implications – Practitioners can use the recommendations herein to adapt their business models and address dramatic economic and social changes in the developed countries in which they function. Originality/value – Considering the differences between developed and developing countries, firms should promote a BOP mind-set, rather than struggling to transpose full BOP business models to TOP settings.

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References

2010The fortune at the bottom of the pyramid 2006Fortune at the bottom of the pyramid, the: eradicating poverty through profits 2010Building Social Business Models: Lessons from the Grameen Experience 2007The Mirage of Marketing to the Bottom of the Pyramid: How the Private Sector Can Help Alleviate Poverty 2007Profitable Business Models and Market Creation in the Context of Deep Poverty: A Strategic View 2009Corporate-NGO Collaboration: Co-creating New Business Models for Developing Markets 2009How GE Is Disrupting Itself 2011Frugal Innovation in Emerging Markets

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