Bottom of the Pyramid
(C.K. Prahalad)

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Alleviate world poverty. Do not treat the poor as victims or as a burden. Explanation of Bottom of the Pyramid of C.K. Prahalad. ('02, '05)


Bottom of the Pyramid

What is the Bottom of the Pyramid? Description

The bottom of the (economic) pyramid consists of the 4 billion people living on less than $2 per day. For more than 50 years, the World Bank, donor nations, various aid agencies, national governments, and, lately, civil society organizations have all done their best, but they were unable to eradicate poverty.


Aware of this frustrating fact, C.K. Prahalad begins his book: "The Fortune at the Bottom of the Pyramid" with a simple yet revolutionary proposition: If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up.

Prahalad suggests that four billion poor can be the engine of the next round of global trade and prosperity, and can be a source of innovations. Serving the Bottom of the Pyramid customers requires that large firms work collaboratively with civil society organizations and local governments. Furthermore, market development at the Bottom of the Pyramid will also create millions of new entrepreneurs at the grass roots level.
 

Prahalad presents his new view regarding solving the problem of poverty as a Co-Creation solution towards economic development and social transformation (figure), of which the parties involved are:

  • Private enterprises
  • Development and aid agencies
  • Bottom of the Pyramid consumers
  • Bottom of the Pyramid entrepreneurs
  • Civil society organizations and local government

12 Principles of Innovation for Bottom of the Pyramid Markets

Prahalad provides the following building blocks for creating products and services for Bottom of the Pyramid markets:

  1. Focus on (quantum jumps in) price performance.
  2. Hybrid solutions, blending old and new technology.
  3. Scaleable and transportable operations across countries, cultures and languages.
  4. Reduced resource intensity: eco-friendly products.
  5. Radical product redesign from the beginning: marginal changes to existing Western products will not work.
  6. Build logistical and manufacturing infrastructure.
  7. Deskill (services) work.
  8. Educate (semiliterate) customers in product usage.
  9. Products must work in hostile environments: noise, dust, unsanitary conditions, abuse, electric blackouts, water pollution.
  10. Adaptable user interface to heterogeneous consumer bases.
  11. Distribution methods should be designed to reach both highly dispersed rural markets and highly dense urban markets.
  12. Focus on broad architecture, enabling quick and easy incorporation of new features.

Origin of the Bottom of the Pyramid. History

Before his 2005 book, Prahalad published two articles regarding this framework about alleviating poverty:

  • Jan 2002: The Fortune at the Bottom of the Pyramid (Strategy+Business), with Stu Hart
  • Sep 2002: Serve the World's Poor, Profitable (Harvard Business Review), with Allen Hammond

Usage of the Bottom of the Pyramid. Applications

  • This framework provides an impetus for a more active involvement of the private sector in building the marketing ecosystems for transforming the Bottom of the Pyramid.
  • Helps to reconsider and change long held beliefs, assumptions and ideologies.
  • Provides clues on developing products and services for Bottom of the Pyramid consumers.

Strengths of Bottom of the Pyramid thinking. Benefits

The biggest strengths of the Bottom of the Pyramid approach by Prahalad is, that it helps to reconsider and change long held beliefs, assumptions, and ideologies, which are all based on and are supporting victim- and burden thinking:

  • There is money at the Bottom of the Pyramid: it is a viable market.
  • Access to Bottom of the Pyramid markets is not necessarily difficult. Unconventional approaches such as the Avon ladies approach may work.
  • The poor are very brand-conscious.
  • The Bottom of the Pyramid market has been connected (mobile phones, TV, Internet).
  • Bottom of the Pyramid consumers are very much open towards advanced technology.

Assumptions of the Bottom of the Pyramid. Conditions

  1. The poor can not participate in the benefits of globalization without an active involvement of the private sector and without access to products and services that represent global quality standards.
  2. The Bottom of the Pyramid market provides a new growth opportunity for the private sector and a forum for innovations. Old and tried solutions cannot create markets at the Bottom of the Pyramid.
  3. Bottom of the Pyramid markets must become an integral part of the work and of the core business of the private sector. Bottom of the Pyramid markets can not merely be left to the realm of Corporate Social Responsibility (CSR) initiatives.

Book: C.K. Prahalad - The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits -


Special Interest Group - Bottom of the Pyramid


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Forum - Bottom of the Pyramid  

Discussions about Bottom of the Pyramid.


  Fighthing Corruption in Developing Countries. The Role of Leaders
I am looking for ideas to start a study on how to "eliminate" corruption in developing countries. Ac (...)
 
 
 
 
  Increase the Whole Pyramid
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  A Bottom of the Pyramid Solution Must Be High Tech, Low Cost and Mass Producible
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  Bottom of the Pyramid People and SMEs
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  Packaging at the Bottom of the Pyramid
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  Using House of Quality With Bottom of the Pyramid Framework
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  Lighting Up African Village Schools
Nigerian population: 150 million - Electricity: < 16bln KwH South African population: 44 million - (...)
 
 
 
 
  Developing and Exporting Ideas From BOP Countries
I have redesigned traditional hand-pumps and park equipments to work together. The result is a water (...)
 
 
 
 
  Enabling Bottom of the Pyramid (BOP) Entrepreneurs
Micro credit organizations such as KIVA are enabling access to credit. It's a good start. Education (...)
 
 
 
 
  Definition of Informal Economy
People that belong to the bottom part of the economic pyramid are often unable to generate income fr (...)
 
 
 
 
  Why Informal Economies can Become Larger than Illegal Economies
Over the last decades, the concept "informal economy" has been conceptualized in many ways (see for (...)
 
 
 
 
  Responsibility of International Corporations
Large corporations such as Nestle and Exxon mobile have traditionally supplied raw materials with a (...)
 
 
 
 
  Problem with Bottom of Pyramid
No matter how liberal and open we project ourselves... It's easy to say we should improve the capabi (...)
 
 
 
 
Hot Effective Humanitairian Aid to BOP Countries: The Case of Haiti
Haiti has once again been hit hard, this time by a devastating hurricane named Matthew. The country (...)
 
 
 
 
  Relations Between Informal & Formal Sector
Despite the fact that the is debatable, a lot of scholars focus on how an informal sector can be fo (...)
 
 
 
 
  Improving the Lot of People at Bottom of the Pyramid (BOP) Takes More
I don't subscribe to the view that the lot of 4 billion people at the BOP can be changed by above me (...)
 
 
 
 
  Bottom of Pyramid and Network Marketing Hybrid Plan
Being an entrepreneur and having very practical knowledge of sales and marketing and of challenges f (...)
 
 
 
 
  Rural Marketing - Rural (Tourism) Marketing
How is rural tourism marketing different? How can rural tourism be used as an effective tool to remo (...)
 
 
 
 
  Community Marketing in Developing Countries
Due to the lack of well-functioning distribution networks in developing countries, potential buyers (...)
 
 
 
 
  Best Practices in Extending Medical Facilities to the Poor
Has anyone experienced a successful business case that extends medical facilities to the poor? In a (...)
 
 
 
 
  Ideas for Development Phase of Papua New Guinea
How can Papua New Guinea (PNG) improve the living standard and efficient use of resources to improve (...)
 
 
 
 
  Differences in Purchasing Decision Making and Consumer Behavior in BOP-markets
It is often assumed that the behavioral trends and practices of consumers in BOP-markets are the sam (...)
 
 
 
 
  Bottom of Pyramid People?
Which class of people come under BOP? (...)
 
 
 
 
  Bottom of the Pyramid (BOP) and Communication
If the bottom of the pyramid is not connected with communication tools and media, how can marketers (...)
 
 
 
 

Best Practices - Bottom of the Pyramid

Here you find the most valuable discussions from the past.


  Are the Bottom of the Pyramid (BOP) Brand Conscious Consumers?
The people at the Bottom of the Pyramid are referred to as brand conscious and at the same time they (...)
 
 
 
 
  The Role of Government in Bottom of the Pyramid Thinking
Africa is a place with extremities. There is abundance of arable land and sufficient amount of water (...)
 
 
 
 
  What is Jugaad? Meaning, Definitions and Examples
What is the role of 'Jugaad' (Hindi term for innovative, improvising, lateral fixes and hacks using (...)
 
 
 
 
  Bottom of the Pyramid and Technology
The assumption that only the developed world would appreciate and pay for new technology while previ (...)
 
 
 
 
  Bottom of the Pyramid Concept by CK Prahalad is Profound
A profound concept. Aiming at a win-win solution for all. As Mahatma Gandhi said something like thi (...)
 
 
 
 
  The BOO Model, BOOM Model and BOOT Model. Implementation in BOP Countries
The financial models, such as BOO (Build Own Operate), Build Own Operate and Maintain (BOOM), BOOT ( (...)
 
 
 
 

Expert Tips - Bottom of the Pyramid

Here you will find advices by experts.


 

Organizing Large Corporations to Capture BOP Opportunities

Organizational Development, Best Practices (...)
 
 
 

Bottom of the Pyramid Pitfalls

Avoid these Problems when you're Building a BoP-Business (...)
 
 
 

Is your Firm Ready to Enter into BoP Markets?

BOP Self-Questionnaire (...)
 
 
 

Bottom of the Pyramid in Financial Services

Microfinance Strategy (...)
 
 
 

Organizational Infrastructure to Address the Bottom of the Pyramid

OD, Organizational Development, Best Practices (...)
 
 
 

Innovation Principles Behind Bottom of the Pyramid Strategies

BOP Strategy Focus Points (...)
 
 
 

Base of the Pyramid Strategic Innovation

Strategic innovation in developing markets (...)
 
 
 

Bottom of the Pyramid Commercial infrastructure

BOP Commercial Strategy (...)
 
 
 

Going Global: Adaptation of Marketing Mix Components

Marketing Strategy, Global Marketing, International Marketing, Marketing Mix, 4Ps (...)
 
 
 

Differences in Purchasing Decision Making and Consumer Behavior in BOP-markets

Bottom of the Pyramid, Consumer Behavior, Consumer Marketing (...)
 
 
 

Marketing for the BOP market

Segmentation (...)
 
 
 

Examples of Bottom of the Pyramid Strategies

Strategy, Marketing, Innovation (...)
 
 
 

How BOP Countries Can Disrupt Western Markets

Disruptive Innovation, Bottom of the Pyramid, Country-level Strategy (...)
 
 
 

BOP Success Cases

BOP Strategy (...)
 
 

Resources - Bottom of the Pyramid

Here you find powerpoint presentations, micro-learning videos and further information sources.


BOP is at Best a Harmless Illusion and Potentially a Dangerous Delusion

BOP Critics (...)
 

Reverse Innovation

Understanding Reverse Innovation, Innovation Strategy, Emerging Markets, BOP (...)
 

Perspective: Biography Prahalad (1941-2010)

Developing a Broader Perspective towards the Ideas of Prahalad (...)
 

Bottom of the Pyramid Diagram

Alleviating World Poverty by Involving the Prviate Sector (...)
 

Risk Management in Agricultural Lending

Agricultural Risk Management, Micro Finance, Bottom of the Pyramid, Agriculture Risk Management (...)
 

Interview with Prahalad about Assumptions in Bottom of the Pyramid (BOP) Thinking

Errors to Avoid in BOP Strategy (...)
 

Compare with the Bottom of the Pyramid:  Diamond Model  |  Cultural Dimensions  |  Strategic Intent  |  Co-Creation  |  Business Process Reengineering


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