BUSINESS AT THE BASE OF THE PYRAMID

Business at the Base of the Pyramid



Business at the Base of the Pyramid

Part 1

Introduction

The term base of the Pyramid is used for the population of the world which is only able to earn a basic living. The luxuries of life for this particular group are considered to be dream and the fulfilling of the necessities is what motivates them to work harder each day. The total population of this group is almost 4 billion human beings around the globe and the estimated figure for next 40 years is 50% growth in the current population. The per capita income of this group is estimated to be below $1500 (Prahalad and Stuart, 2002), although recently it is estimated to be $3000. This increase is due to the inflation throughout the globe.

The organizations that is willing to opt for this market which has lots of potential must be striking a balance among the two most important factors that are creating value for the customers and profit maximization for their businesses. Although this is what all the organization actually deals with, but in case of BoP value creation is the basic element as they have to consider their market image more than any other organization dealing with traditional marketing strategies.

Business at the Base of the Pyramid's can be really helpful for the organizations in both the senses value creation and profit maximization. People who are part of this demographic group are recognized to spend more on the things which are more and more worth with respect to their benefits especially regarding the health of the people. They deprive for making their livings healthy and safe with their limited incomes. By keeping this thing in mind pharmaceuticals and other such product makers van benefit their profits as this is where they are willing to pay.

Going for Business at the Base of the Pyramid doesn't mean that the companies go for selling to the poor. This is not easy to be done as transferring a business strategy form the context of developed countries to the developing countries. The organization going for any of such steps take their business strategy in accordance to the need of the situation like development of products and services. This will be god for addressing the fundamental issue like and will lead toward sustainable development (Simians and Stuart, 2008).

NGO / Corporate Partnerships

The mutual relation between NGOs (nonprofit organizations) and the profitable organizations is although a very new kind of alliance but it has various reasons associated with them. The nonprofit organizations might tie together for the entrepreneurial abilities of the non profits for helping the Business at the Base of the Pyramid clients for the sake of developing effective business enterprise. On the other hand the private companies might also hire some expertise from the nonprofits; this will help the in reaching to the Business at the Base of the Pyramid s in an easier and cost effective manner (Brugmann and Prahalad, ...