The Bottom of the Pyramid (BOP) has become a dominant discourse among the
business intellectuals. It created the Cognizant of the irresistible consideration of
billions of global poor at the BOP on managerial practices. I tried to analyze the
different aspects of BOP preposition and how large corporations can serve Poor
customers profitably. I argue that there is no huge untapped market at the BoP as
argued by the BoP proponents. I also argue that 75% of the BoP consumers are
rural peasants, that MNCs could hardly accessible. I attest that the MNCs could not
solve the hunger outgrowth of poverty and its root causes at the BOP which is not
only economic issue. I argue that encouraging the consumption of luxury goods
among the poor could aggravate the incidence of poverty in the world. However, I
argue that poor must be viewed as producer rather than consumer. I attest that
enhancing the employment and productivity of poorest communities would lead a
sustainable prosperous future and betterment live for the poor. I argue that small
and middle scale business enterprises could play inevitable role in the poverty
elevation through increased employment of the global Poor at the BoP. I also argue
that enhancing the employability of the poor at the BoP is very crucial for poverty
elevation. Employability relates much with education I argue that vocational
training for different sectors more viable for poverty reduction. I also argue that
increasing employment alone is not enough if poverty eradication is required , then
enhancing the productivity of the poor must be in focus.
Table of Contents
1. Introduction
1.1. Discussions
2. The Unfortunate at the Bottom of The Pyramid
2.1. Poverty Elevation Through Increasing of the Real Income
3. The Small and medium Business Role of Self Employment :The Case Study of Hargeisa City
4. Conclusions & Recommendations
Objectives & Topics
The primary objective of this work is to critically analyze the "Bottom of the Pyramid" (BoP) business proposition, specifically questioning whether a significant untapped market exists for multinational corporations and if their involvement effectively eradicates the root causes of poverty. The research shifts the focus from viewing the poor as consumers to viewing them as producers, emphasizing the importance of employment and productivity as key drivers for sustainable poverty alleviation in the context of Hargeisa, Somaliland.
- Critique of the BoP business model and its underlying fallacies.
- Economic assessment of poverty and household income sources.
- The role of small and medium enterprises in local economic development.
- The necessity of vocational training and skill-based employment.
- Case study analysis of economic resilience in Hargeisa.
Excerpt from the Book
The Unfortunate at the Bottom of the Pyramid
C.k. Prahalad argued in 2005 “that The Multinational Corporations (MNCs) serve only at the upper end of the economic Pyramid and they ignored at the Bottom of economic Pyramid”14, He argued that there is huge untapped market at the bottom of the pyramid. “The BOP market potential is huge: 4 to 5 billion underserved people and an economy of more than $13 trillion PPP”15.
He argued that “Private companies can make significant profits by selling to the poor; BoP market is 10 to 200 times advantage (compared to the cost structures that are oriented to the top of the pyramid markets”16. To tap this vast market at the BoP he suggest that MNCs need to redesign and produce a quality products and services or they have to select away that they can produce a great quality product with affordable price. “BOP consumers expect great quality at prices they can afford therefore challenge to large firms is to make aspiration products affordable to BOP consumers”17 .C.k. Prahalad argued that the private companies will bring affluence to the BoP consumers, and thus can help eliminate poverty, while they are taking the opportunity of this untapped market at BoP. “Poverty alleviation can become a business development task shared among the large private sector firms and local BOP entrepreneurs”18.
Summary of Chapters
1. Introduction: This chapter defines poverty and hunger while introducing the Bottom of the Pyramid (BoP) discourse and its popularity among global business intellectuals.
1.1. Discussions: This section details the research methodology and the critical perspective adopted, setting the stage for evaluating the validity of the BoP preposition.
2. The Unfortunate at the Bottom of The Pyramid: The chapter critically examines the claims made by BoP proponents, contrasting the "untapped market" theory with real-world economic data and the limitations of MNC participation.
2.1. Poverty Elevation Through Increasing of the Real Income: This section argues that poverty reduction is best achieved by viewing the poor as producers rather than consumers, advocating for increased employment and productivity.
3. The Small and medium Business Role of Self Employment :The Case Study of Hargeisa City: This chapter presents an empirical case study of Hargeisa, analyzing household income sources and the resilience of local small-scale businesses in a post-conflict environment.
4. Conclusions & Recommendations: The final chapter summarizes the findings, reiterating that the BoP market is largely a mirage and that sustainable development relies on local productivity and vocational empowerment.
Keywords
Bottom of the Pyramid, BoP, Poverty Eradication, Multinational Corporations, Small and Medium Enterprises, Self-Employment, Real Income, Hargeisa, Vocational Training, Economic Development, Household Income, Labor Market, Productivity, Sustainability, Globalization.
Frequently Asked Questions
What is the core argument of this publication?
The work argues that the prevalent "Bottom of the Pyramid" (BoP) business model is flawed, asserting that there is no massive untapped market for multinational corporations to profit from, and that real poverty alleviation requires focusing on the poor as producers rather than consumers.
What are the primary themes discussed?
The themes include the critique of corporate strategies in developing nations, the socio-economic realities of poverty in LDCs (Least Developed Countries), the necessity of vocational education, and the role of small-scale local enterprises.
What is the primary research goal?
The study aims to determine whether a "fortune" actually exists at the bottom of the pyramid and if large corporations can genuinely solve the root causes of poverty, concluding that local empowerment is a more viable path.
Which scientific method is utilized?
The author uses a critical literature review combined with a specific case study (Hargeisa, Somaliland) using data from urban economic assessments to support the arguments.
What topics are covered in the main body?
The main body covers the theoretical critique of BoP proponents, a discussion on raising real income through production, and a comprehensive urban economic assessment of Hargeisa.
What are the key terms that define this work?
The work is defined by terms such as BoP, poverty elevation, producer-focused development, and local entrepreneurship.
How does the author view the role of multinational corporations?
The author argues that MNCs often overestimate the purchasing power of the poor and that their involvement in the BoP market is largely ineffective at addressing the structural causes of hunger and poverty.
What is the significance of the Hargeisa case study?
The case study illustrates how, in the absence of major corporate infrastructure, local small and medium businesses provide the primary source of survival and self-employment for the local population.
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- Abdiqani Egal (Autor:in), 2012, The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits, München, GRIN Verlag, https://www.grin.com/document/198788
