Developing inclusive business models : a review of Coca-Cola's Manual Distribution Centers in Ethiopia and Tanzania

Abstract

Expanding economic opportunity, raising productivity and increasing growth are crucial for alleviating poverty. In the face of the global economic crisis they are more important and more challenging than ever. Their achievement will require concerted leadership on the part of both the public and private sectors. In many developing countries, achieving these goals requires the creation of more inclusive business models that directly integrate low-income people as entrepreneurs, suppliers, distributors, retailers, employees and consumers.4 It also requires more collaborative approaches between large companies, small enterprises, public sector entities, civil society organizations and the poor themselves. These are necessary to address the market failures and the governance gaps that currently exclude or disadvantage many small enterprises and low-income households from prospering. A growing number of large corporations are proactively engaging in such approaches with the aim of achieving core business benefits such as greater competitiveness, increased market share and improved risk management - while also contributing to the achievement of international development goals. The following report provides a review of one such approach: Coca-Cola's Manual Distribution Center model, with a focus on implementation in Ethiopia and Tanzania where it accounts for over 80% of the company's sales. It aims to provide a more empirical basis for understanding and enhancing the development contribution of large companies through their core business operations and their partnerships with other development actors. In addition to this report, the participating organizations are working together in Africa and elsewhere to engage with key stakeholders, test recommendations on the ground, and implement practical new approaches that combine both business benefi ts and development gains.

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