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Drawing on Prahalad’s breakthrough insights in The Fortune at the Bottom of the Pyramid, great companies worldwide have sought to identify, build, and profit from new markets amongst the world’s several billion poorest people, while at the same time helping to alleviate poverty.
Five years after its first publication, this book’s ideas are no longer “theory”: In the 5th Anniversary Edition, Prahalad thoroughly updates his book to reveal all that’s been learned about competing and profiting “at the bottom of the pyramid.
He interviews several innovative CEOs to discuss what they’ve learned from their own initiatives, including the Unilever business leader who’s built a billion-dollar business in India. You’ll find a new case study on Jaipur Rugs’ innovative new global supply chain; updates to earlier editions’ key cases; and up-to-the-minute information on the evolution of key industries such as wireless, agribusiness, healthcare, consumer goods, and finance. Prahalad also offers an up-to-date assessment of the key questions his ideas raised: Is there truly a market?
Is this a global opportunity? Five years ago, executives could be hopeful that the answers to these questions would be positive. Now, as Prahalad demonstrates, they can be certain of it.
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WHat this requires, the author argues, is a willingness by companies to look for new solutions in product design, the creation of both traditional and information infrastructures, the involvement of potential consumers, and the like rather than merely adapting products that were developed for other markets. While simple, there is much merit to this approach, which should empower the poor to get involved in the economic system as well as generate returns for companies.
WHile I cannot do justice to Prahalad’s model, which is presented in the first part of the book, there is much of it that deserves scrutiny. He argues that corporations need to adapt many of their basic x and assumptions to these markets, throwing out many aspects of the conventional wisdom.
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FOr example, corporations must be willing to offset lower-profit margins with the huge potential demand that underdeveloped markets exhibit – this turns competitive advantage on its head, as many corporations would seek to get out of such “commoditized” markets once profit margins per product begins to drop. Corporations must also spend more time educating potential consumers in such areas as personal hygiene, which requires partnerships with health officials, etc.
That was to promote handwashing as a way to prevent diarrhea, which is a major killer of children in the 3-W. While his ideas do not add up to a coherent model, they are diverse enough to be useful to those who are contemplating market entry in 3-W countries.
The second half of the book has case studies that illustrate Prahalad’s ideas. This was a far weaker part of the book: Fortine, there are many interesting nuggets of info in them, if the reader has the time oyramid plow thru them.
There is also a supplemental cd-rom, which I found almost completely useless for those who want to get at the ideas quickly – they are amateurish and do not encapsulate the book’s ideas independently of the book’s text, but rather supplement it. And poorly at that.
Finally, while I am sure that these stories helped a lot of people, nothing is put forward to argue that the cases are anything more than isolated incidents – ptramid this really significant, I mirsgem How will it diffuse in the overall economy? What else must be done? These macro-questions are wholly unanswered and yet, I feel, crucial for anyone who might want to get involved in this approach. REcommended as food for thought. The process of co-creation assumes that consumers are equally important joint problem-solvers New and creative approaches are needed to convert poverty into an opportunity for all concerned.
The Fortune at the Bottom of the Pyramid – Wikipedia
That is a challenge. First, he provides a framework for the active engagement of the private sector and suggests a basis for a profitable win-win engagement. He identifies all manner of adjustments, accommodations, and yes sacrifices each of the “players” – MNCs, NGOs, and the poor themselves — must be willing to make miragek ensure the success of the process.
Next, he carefully and eloquently examines 12 case studies which involve a wide variety of businesses, each an exemplar of innovative practices, “where the BOP is becoming an active market and bringing benefits far beyond just products to consumers.
Of special note is the fact that the various stories are told almost entirely from the perspective of BOP consumers, the so-called poor.
As Prahalad points out, they get products and services at an affordable price, “but more important, they get recognition, respect, and fair treament.
Builting self-esteem and entrepreneurial drive at the BOP is probably the most enduring contribution that the private sector can make.
Of special interest to me is what Prahalad has to say about innovation for BOP markets which must become “value-centered” from the consumer’s perspective. He identifies and then rigorously examines 12 principles mieagem innovation in those markets such as “creating a new price performance envelope” and “education of customers on product usage.
Moreover, pyrmaid must “also focus on the need for 30 to pyrxmid improvements in price performance. Even if the need is only for 10 to 20 times improvement, the challenge is formidable. His vision is bold, indeed of global proportions. Given the importance and the urgency of the various issues which Prahalad explores so brilliantly in this book, there frtune to be no acceptable alternatives to the approach he proposes. See all 11 reviews. Would you like to see more reviews about this item?
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