|Fortune at the Bottom of the Pyramid, The: Eradicating Poverty Through Profits
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The world's most exciting, fastest-growing new market is where you least expect it: at the bottom of the pyramid. Collectively, the world's billions of poor people have immense untapped buying power. They represent an enormous opportunity for companies who learn how to serve them. Not only can it be done, it is being done--very profitably. What's more, companies aren't just making money: by serving these markets, they're helping millions of the world's poorest people escape poverty.
C.K. Prahalad's global bestseller The Fortune at the Bottom of the Pyramid, now available in paperback, shows why you can't afford to ignore "Bottom of the Pyramid" (BOP) markets. Now available in paperback, it offers a blueprint for driving the radical innovation you'll need to profit in emerging markets--and using those innovations to become more competitive everywhere. This new paperback edition includes eleven concise, fast-paced success stories from India, Peru, Mexico, Brazil, and Venezuela--ranging from salt to soap, banking to cellphones, healthcare to housing. These stories are backed by more detailed case studies and 10 hours of digital videos on whartonsp.com. Simply put, this book is about making a revolution: building profitable "bottom of the pyramid" markets, reducing poverty, and creating an inclusive capitalism that works for everyone."
- Positive & Realistic
Tons of information backed by practical means. There is a ton of contemporary and useful information, statistics, charts, and analysis in this book. Equally important are the lists
of specific steps and methods to implement these practical ideas.
In "Bottom of the Pyramid," C.K. Prahalid details the critical
realities that are witnessed and experienced in our radically
changing world today. Especially for those that are living in LDC nations, or those on the lower end of the Per Capita Income scale, and/or those that are not experiencing sufficient economic growth. "BOP" is also quite relevant to high economic growth nations such as China and others, as these countries evolve (or is that devolve)?
Several concepts are examined and advocated in "Bottom of the Pyramid by Prahalad. MFIs, and Purchasing Power Parity (PPP) at the Bottom of the Pyramid (BOP) are relevant examples of purchasing parity. The author's concept of these populations being "value conscious by necessity" is real.
As practical as the means to implement these concepts are in this
book, often aided with specific models, examples, and instruction - it also takes - local people to accept it and do it. Many of the means and methods proposed for these areas at the BOP at times seem visionary and over-idealistic and also, too consumer-oriented. Prahalid does note the impediments, and is realistic about them.
Supplying market needs is helpful to people by providing them access and affordability to the products they need. Beyond this, what can be achieved once these market niches are filled? Again, Prahalid uses a lot of charts, graphs, and stats to outline current challenges, and also the specific ways to address them. Prahalid lists logistics, payment methods, transportation, etc.
One concept advocated is "creating the capacity to consume" in these poor countries, facilitated by the "single serving revolution." This single serving marketing approach is for sales of smaller packages of products instead of larger ones because lower income people in BOPs can't afford to buy larger packages and quantities and put them on the shelf at home for later use. Good value for a good product, with a good portion-to-cost ratio. Some small packaged single servings specifically listed by Prahalad are: "ketchup, tea, shampoo, coffee,
and aspirin." Trivial products, many of us in the world use. Going farther and beyond these items would help, however: and, Prahalid does. In addition, his concept of the "Three As" is realistic in this approach to marketing: Affordability, Access, Availability.
Some of the bureaucratic policies and private industries noted:
citizen-centric governance, e-governance, the salt industry in India, landmines and prosthetics, eye care, rural kiosks, training, deliveries, and supply-chains, etc.
Prahahlid noted the challenges to implementation. Ideas and words are quite different from implementation. (The doing.) This book's ideas can be helpful in certain circumstances and in many areas of the world. There is opportunity to implement these concepts, There are however, many hurdles to implementing them and achieving success. Will people at the BOP make the behavioral changes needed? Changing mentalities is where it starts. Are these recommendations, a form of cultural imperialism to some degree? One obstacle is corruption;
it's rampant in many of these BOP countries. A high percentage of aid and investments are stolen throughout the world. Multi-national companies (MNCs) are often squeezed. Theft, corruption, and judiciary systems are built to work against foreigners and obstruct them, while these BOP nations depend upon them. NGOs acquire and spend a lot of money. What do they actually do? Not much, as a whole. NGO corruption and embezzlement is endemic. Aid is used by governments of the "developed world" to push forward its own agenda
in these nations. Aid, is a carrot and a stick at the same time.
In these nations there is no concern for individuals. Governments of BOP nations care about large corporations that dump millions of dollars of FDI into these countries. These MNCs often flush millions down the drain to get into these nations to get market share, reduced labour-costs, and to often export what they produce in BOPs nations to consumers in highly developed countries. Outsourcing is the latest motivator for the globalized competitive world where MNCs wield enormous power. Where do the 4 billion people Prahalad mentions as living on $2 USD per day fit into this? at the BOC (Bottom of the
Company). Author Prahalid states: "The process must start with
respect for Bottom of Pyramid consumers as individuals." Consumers? Target marketing aspirin, coffee, and shampoo.
If foreigners can be the saviour, how long will they have to stay? This sounds like a business oriented financial quid-pro-quo with the time-consuming and often ineffective Peace Corps approach: "We can do things better than you can. So let us come. Let us in. We're doing you a favor, while we're furthering our interests at the same time. Mutual benefits to some degree, but what is the ratio? Different parties want access to the pie. If the entire pie grows and greater
pieces and access of it are available to those who have less, those who have nothing or little, will in theory get a larger piece of the bigger pie. An element of Game Theory, perhaps.
There are 6.3+ billion people on this planet, and the population is contueing to rise rapidly. Water and food will take prevalence over economic growth if something is not done about it. Lack of these basic necessities needed for basic survival will obstruct the prospect for economic growth and better quality of life. And, developed nations plunder world's the environment and harm the lives of those with less political and economic power. We live in one world, not three. What we do, more than ever, affects the entire population. This is a very positive book, with realistic means to achieve its aims.
Ideas, facts, and realistic methods are superbly tied together in
"Bottom of the Pyramid." The biographies at the back of the book add depth to the people involved. A Highly recommend book for everyone, and in particular those in Internationally Development, Intl. business, MNCs, and government. Great book.
- Hardcover and tradepaperback are different!!!
Here is a note I sent to the editor after buying the tradepaperback version.
Your editorial staff has done something so dumb I am astounded! (Also really $%^& mad.) The hardcover and trade paperback versions of CK Prahalad - The fortune at the bottom of the pyramid, are NOT the same. I assigned readings from this book to my class of 100 students. They went and bought the book and found that the case studies aren't there. On closer investigation I see that you shortened the case studies and renamed the chapters. Unfortunately the editing on the shortening is terrible and I simply can't ask my students to read such badly written material.
You did several things wrong
1) You sell two books with identical titles and covers, which have different content
2) You edited very very badly
3) You did this on an award winning book with high visibility
As far as I can tell there is no way for anyone to figure out that the content is different except in the very rare case that they own both versions.
This is a black mark on the Wharton name. What were you thinking?
- Just a quick correction...
Give a man to fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.
It's a great quote. But it's not from the Bible. It's just a well-worn proverb that teaches that education is better than enablement.
Tony Rush...more info
- Using profit motive to drive development and entreprenuership in developing countries
What is really good about this book is that it proposes a framework and then illustrates it with case studies. Aside from the thesis that a profit motive can be the driver for economic growth, improving the capabilities and lives of the poorest it also shows that developing economies does not equal low technological maturity or lack of opportunities to innovate with business models, distribution channels, product development or business processes.Having grown up and worked in India in the mid 90s it was clear that this kind of thinking and business models were not actively pursued.
However, the case studies suggest this has changed and in many ways as far as India is concerned this is visible by strong anecdotal evidence. Also in many ways there is anecdotal evidence to suggest that people have realised that the government will not solve all that makes doing business difficult and have been using this kind of thinking as a driver for entrepreneurial business which also have a positive impact on the people at the bottom of the pyramid.
Will The framework and ideas apply in all developing economies , specially with smaller populations ? This question is harder to answer and no doubt time will tell....more info
- Convert poverty into prosperity
C.K. Prahalad has written about a bold new idea to fight poverty using profits.
"IF WE stop thinking of the poor as victims or as a burden and start recognising them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up." That "simple proposition" begins a controversial new management book that seems destined to be read not just in boardrooms but also in government offices. "The Fortune at the Bottom of the Pyramid. Eradicating Poverty Through Profits" (Wharton School Publishing), is essentially a rallying cry for big business to put serving the world's 5 billion or so poorest people at the heart of their profit-making strategies. It has already been praised by everyone from Bill Gates-"a blueprint for fighting poverty"-to a former American secretary of state, Madeleine Albright-"if you are looking for fresh thinking about emerging markets, your search is ended."
Ultimately, profits aren't made by screwing people out of their money. Profits come from solving customer problems and meeting customer needs. Any market with unmet needs and/or inefficiencies in process is ripe for someone to come in and make profits while still providing good value to consumers. I hope this book starts to change the thinking patterns of society. The best thing that could happen to those in poverty is that we unleash the power of capitalism to raise their standard of living. ...more info
- Saving the World
The author loves his TLA's (3 letter acronyms)! I wish someone had told me how technical this book was; those with an MBA will get the most out of it. But I love Prahalad's outlook and creativity. Perhaps with a little advice I can take my ideas and come up with a formal business plan....more info
- its a perfect strategy for the 21st century: for all MNCs to follow
A new approach which in fact is so easy but psychologically so difficult to accept. We have tried it out and and observed companies doing it since 16 years: to design and market low end products for the "Bottom of the Pyramid" (BOP) with high profit margins at low cost. We have developed a tool which we call MMP or Multiple Market Positioning which shows step by step how to implement this BOP idea successfully. Regards, Dr. Peter Oertli, OEC Oertli Consulting, CH-8142 Uitikon-Zurich, Switzerland....more info
- Fortune at the Bottom of the Pyramid
I thoroughly enjoyed this book and found the information eye-opening. I was thrilled to read about so many creative and resourceful people (actual case studies) who are truly commited to serving those who live on $1-$2 a day around the world. Their needs are real and the heros are those creative individuals who are 'pushing the envelop' in serving them while still making an honest profit. The case studies are also available either via a CD in the back of the book or via the website in the paperback edition. This is an EXCELLENT read....more info
- This is a must read book ..
..if you work in international development or are looking into international strategy. Prahalad is the first to provide a structured framework for addressing the poverty needs through the free market itself. ...more info
- One of the top business books of 2004
This book praised by Economist, Business Week, WSJ, and Amazon as the best business book of the 2004 provides a wealth of insights in to leveraging commercial opportunities in developing nations of the world. The editors at Amazon.com. said, "Our favorite book of the year in Business challenges readers to reexamine their thoughts about Bottom of the Pyramid (BOP) markets.", According to The Economist, it's "...The best book on capitalism and the poor since Hernando de Soto's "The Mystery of Capital".
C.K. Prahalad calls on big business to regard the world's poor as potential customers, and argues that both firms and the poor will win if it does. ...more info
- THE FORTUNE AT THE BOTTOM OF THE PYRAMID By C.K. Prahalad
Businesses, faced with the growing saturation of mass markets, are increasingly talking of niche consumer segments and even micro-niches. C.K. Prahalad, though, has taken a refreshing, original look at the consumer market. His book, The Fortune at the Bottom of the Pyramid, talks about marketing and selling products to the world's four billion poorest people: the largest untapped consumer market today.
In the introduction to the book, Prahalad describes how, in 1997, his initial paper on the topic was rejected by major business journals. However, the paper was made available on the internet, where it was picked up by managers, discussed, analysed and implemented. People recognised it for what it was-a big, powerful idea.
The principle behind the book challenges many of our pre-conceived notions. The dominant assumption in markets is that the poor have little purchasing power, and are not a viable consumer base. In the process, corporations ignore the immense purchasing capacity of the 'bottom of the pyramid' (bop) population. In India alone, there are 178 million poor households, with a combined $378 billion (Rs 16,63,200 crore) in income. Too often, the poor are seen as victims, as people who are completely under the purview of the government and the ngos. While corporations have undertaken several initiatives as part of their corporate social responsibility, the private sector can also target the poor as consumers, and, thereby, become a key player in their development.
Prahalad presents a strong argument for his case. The private sector rarely targets the lower income segment. Consequently, the poor often become victims to the dynamics of the slums and villages. They frequently pay a 'poverty penalty' for goods and services. The author presents the telling example of the slum-dwellers in Dharavi, Mumbai. Residents of these slums pay a premium of 10 times what a Mumbai city resident would have had to pay, merely because they are captive to the medication seller within the slum. This same 'poverty penalty' results in extremely high interest rates on loans from moneylenders, a premium on phone calls, on water, and even on rice. Companies can offer such consumers with more choice (and hence, lower prices). Firms can also provide the poor with jobs that can turn them into entrepreneurs in villages and lift their income levels.
The author is well aware of the challenges that corporations face while treating the poor as consumers. He offers companies a useful framework within which they can target the bop segment. For instance, they have to be prepared to educate their bop consumers about the product. Limited access to villages demands a shift in thinking on distribution. Companies selling to the bop can consider turning villagers into entrepreneurs to sell the product. For example, HLL has introduced Project Shakti, which recruits village women, Shakti Ammas, to sell HLL products. The concept has introduced dignity and self-sufficiency for the women and benefits the company as well. ICICI launched a similar initiative where women became involved in the bank's micro-financing initiative. Product and process innovations are also key requirements. These can compensate for the lack of infrastructure.
If companies are willing to reengineer their businesses and products appropriately, targeting this market can reap rich dividends and can be mutually beneficial. The book abounds with powerful examples of corporations from India, Brazil, Mexico and Peru tailoring innovative and successful solutions to bop problems. Companies across sectors are offering customised solutions to the poor, and turning them into profitable consumers. For instance, shampoos, soaps, biscuits and even creams are being sold in India in single-serve sachets. Such sachets now account for 60 per cent of value sales in India's shampoo market. In Brazil, Casas Bahia, a consumer electronics firm has developed an original credit rating and counselling system. This enables the firm to provide quality appliances to consumers with low or unpredictable incomes. The firm has one of the lowest default rates in the Brazilian market.
Prahalad writes with great understanding on the problems of doing business in developing countries. Businesses cannot succeed in societies that fail, and Prahalad presents a winning idea, which combines corporate interest with social development. In the words of Henry Ford, "It is easy to give alms; it is better to work to make the giving of alms unnecessary."
The poor need not be excluded from the benefits of globalisation. An inclusive market ecosystem can be created, which can bring the poor dignity and choice. Surely, this is an idea to fight poverty that is insightful, intelligent, and extremely relevant.
-N.R. Narayana Murthy ...more info
- "Give a man a fish, he'll eat for a day...
...Teach a man to fish, and he'll eat for a lifetime". A famous Biblical quote, one that resonated with me strongly, and profoundly influenced my thinking on international aid, but more broadly, the problem of poverty, and the reticence of Capitalism in addressing it.
I'm a strong believer in capitalism, this wonderful book reinforced my belief in that system. It did so by showing how world poverty and consistently non-functional economies aren't because of capitalism, but for lack of capitalist attention.
Times have changed, technology and it's rapidly increasing efficacy in efficient delivery of products and services, necessitates that we change our attitude about heretofore neglected markets, and the nearly 5 billion people in them. "Inclusive Capitalism" as the author calls it.
Rich with important concepts like "Installment Sales" (which address the needs and constraints of low-income consumers), this book is a virtual blueprint for companies, as well as entreprenuers, who are interested in serving low-income consumers around the world.
The hardcover book also contains a CD. I usually skip viewing those, but I'm glad I didn't in this instance. Prahalad gives the introduction, then roughly a dozen case studies follow. From Appliance sales companies in Brazil, to a Cement company in Mexico; seeing the passion on the faces of their customers, how the companies have changed their lives, it is incredibly touching. You aren't watching customers, you're watching "evangalists" that would make your most devout American iPod fan seem like an unsatisfied customer.
I recommend this book highly.
Santa Barbara, California...more info
- Ruminating at the bottom of the pyramid (BOP)
"Fortune" is an interesting, inspiring book. The study of poverty eradication gets short shrift in most business schools but this book suggests that a lot of resources and a phalanx of graduate students (since most graduate students claim to be poor, perhaps they empathize better; at least they're cheaper to hire than business faculty) at Wharton and Michigan did a lot of digging for answers. This is a noble cause, well-financed, and maybe these two business schools will support these efforts with a revision to their MBA curricula. While teaching a man to fish is better than giving a man a fish, it is better still to teach a village how to raise fish (or capital, or critical mass, or some other key resource), and that is the fundamental if implicit message and philosophy here. Poor people don't need charity; they need access to and information about the tools of capitalism, and governments and other not-for-profits are not likely to do this as such actions would put them out of business. Read the "Twelve principles of innovation for BOP markets" (pp. 25 - 27) and you'll get the basic Reader's Digest, Harvard Business Review executive summary.
The mendacity of the claim, "I'm from the government and I'm here to help you," gets a lot of reinforcement here. Rather than help poor people, an early table (p. 11) shows that the government charges poor people more than rich people for the same water service. And the evidence, much of it discovered by Peru's Hernando De Soto, that governments delight in making entrepreneurship, innovation and capitalism almost a criminal offense, shines right through.
The false conceit exposed here is that governments are not likely to fix poverty, nor are NGOs, the UN, or other alphabetical, "not-for-profit" agencies. Maybe HLL, CEMEX, SMEs or some other, similarly acronymed, profit-seeking organizations will do it. It is not clear that there is a fortune at the bottom of the pyramid, even if there are four billion people (depends, really, on how you define poverty) willing to spend a penny a day on shampoo. There certainly is a profit to be made, but this time it is the poor who stand most to profit from free, global markets.
"Fortune" also has little, nagging problems. Like most empiricists, this book wants to use data as a singular noun. The font is small and flourished, making the text physically difficult to read. There is a cryptic table (exactly what is a `nos' anyway"?), a graph with no labels for the x- and y-axes. The book is awash with acronyms and academic jargon. Some of the bold-faced assertions read like doctoral dissertation hypotheses. Maybe because the book is primarily graduate-student written case studies with a lengthy introduction by the author, there is a tendency to repeat information from previous chapters. Decrying excessive packaging and high transaction costs, the authors also commend single-use purchases on a daily basis, filling land fills with sachets and making shopping a daily chore. If we are going to `microfinance' progress, we might want to start with a store credit for a refillable shampoo bottle (I am pretty sure that Coca-Cola mastered this marketing concept in South America years ago). In case the bookstore browser is unsure as to what the book is about, the book has a title ("The fortune at the bottom of the pyramid"), a subtitle ("Eradicating poverty through profits" and a sub-subtitle ("Enabling dignity and choice through markets"). And the dust cover blurbs from Bill Gates, Madeleine Albright, and similar `names' are a bit hyperbolic.
David Landes ("The wealth and poverty of nations") did a better job of explaining the cultural and legal system changes needed to make transactions easier for the customers. TGO (I'll let you look it up) means we have to have a government that assists wealth creation rather than simply tax, block, or prohibit progress out of poverty by people....more info
- Just about any chapter demands you buy this book
This book was featured in an article in The Economist several weeks ago. (I would post the link, but it requires a subscription.) I am currently reading it myself. Its greatest strength lies in the case studies and examples it gives of people doing business with the poor in ways and places that completely defy conventional wisdom. His arguments are well founded on these examples and his research is pretty thorough. (He explains that a large group of business students volunteered to help him research this project.)
I recommend the book as well. It has a broad appeal, so anyone remotely interested in business or poverty could enjoy it.
- an interesting idea
Prahalad suggests the very interesting marketing idea that the bottom of the pyramid can be a symbiotic source of wealth. Some case studies seem very beneficial; others just an excuse to impose over-marketed Western products onto the global South....more info
- The Next Great Marketplace
A copy of this book should be hand delivered to every CEO and VC in America. It opens your eyes to unlimited opportunities if you're willing to consider the concepts so deftly laid out by the estimable author, C.K. Prahalad. Once again, Wharton School Publishing presents us with an important piece of work....more info
- A visionary's idea
On the one hand this book is endorsed by Microsoft's Bill Gates and Former Secretary of State Madeleine Albright. That ought give the prospective reader some idea of its value. On the other hand, it might be asked, what kind of book is this that purports to tell businessmen how to make money by selling goods and services to the poorest people on earth? After all, the poorest people that have any disposable income at all make something like two dollars a day.
First question then is, how big is the market at the bottom of the pyramid (BOP)? Prahalad writes that China's per capita gross domestic product of $1000 really represents a dollar purchasing power parity (PPP) several times that, resulting in a $5-trillion dollar economy. He sees the Indian economy as being worth about $3-trillion in PPP terms. (p. 10) It's easy to see that even the apocryphal "two dollars a day" multiplied by two, three or four billion or so results in a whole lot of money.
The second thing that might be asked is, is it really moral for the business world to turn its considerable powers of inducement and persuasion on people who have so little to begin with? What kind of person would aim to exploit those least able to afford the exploitation? The answer given persuasively by Prahalad is that by making products and services available to the poor, two good things will happen. First is the fact that goods and services hitherto unavailable to the poor will actually become available. Second, these products and services will increase their standard of living and allow them to "acquire the dignity of attention and choices from the private sector that were previously reserved for the middle-class and rich." (p. 20)
How might this work? Presently people in the poorest neighborhoods in the world ironically often pay a premium for what little goods and services they get. Prahalad points out that this is because they are paying a "poverty penalty" which is the "result of inefficiencies in access to distribution and [because of] the role [played by]...local intermediaries." By "local intermediaries" he means the line of middlemen--some traditional, some corrupt, some both--that presently stand between the poor and their products and services. These middlemen add no value but have their hands out and therefore artificially increase prices for the people at the BOP. Products using modern distribution methods will undersell the old ways.
Prahalad emphasizes targeting products precisely to the needs of the poor. BOP people are "value-conscious by necessity," he argues, and contrary to what might be assumed are "very brand-conscious." They are interested in "aspiration products"--brand names--since these products symbolize a higher standard of living and a better way of life. We can see this in our own poor neighborhoods where brand icons like Nike and Sony are almost worshiped. Prahalad notes that the "poor have unpredictable income streams. Many subsist on daily wages and...tend to make purchases only when they have cash and buy only what they need for that day." Consequently a good marketing strategy is to offer "single-service packaging--be it shampoo, ketchup, tea and coffee, or aspirin..."
This may work I believe if, and only if, the products that big business makes available to the people at the BOP really do improve the quality of their lives. If they are persuaded to buy, say, cigarettes which they would not otherwise buy, clearly this will not improve the quality of their lives. If they are persuaded to buy soft drinks and other artificial "foods" consisting of empty calories, it's doubtful that they will benefit.
But is all of this more "globalization trickle down"?--that is, the rich get richer and the poor get--well, somewhat less poor? Prahalad believes that turning the people at the BOP into consumers will raise their standard of living and in the long run eradicate poverty. He uses the phrase "creating the capacity to consume" as a means to this end.
The unstated assumption behind Prahalad's idea (and the consumptive economy in general) is that there is great wealth in the world that only needs to be created by human ingenuity, and then efficiently distributed by the capabilities of the modern corporation. If we can find an energy source as cheap as oil and make a smooth transition to an oil-less economy, I think there is a good chance that Prahalad's vision will be realized. However, if we don't solve the coming energy problem, Prahalad's idea will gather dust and decay like so many abandoned SUVs alongside roads that we can't afford to repair.
In a sense then, this could be a visionary book well ahead of its time....more info
FBP is an intriguing concept and the model can be scaled up or down in size in all parts of the world. The book serves as a wake up call to businessmen across the world....more info
- Another good book on the forgotten people of the world
The author, C.K. Prahalad gives outstanding evidence that working to develop marketing strategies at the bottom of the social pyramid is a profitable business, besides of providing meaningful and practical ways to incorporate millions of excluded people on the modern world economy.
The stories Prahalad includes on his book have more force and prove to be more succesful than the wasteful, gigantic and bureaucratic government programs that have been highly publicized in the past that have resulted as complete failures.
In that sense the idea that Jeffrey Sachs explores on his book "The end of poverty" does not make any sense at all in practical terms, because only piecemeal solutions such as the one developed by Grameen Bank, for example, are the right answers to the quest for economic development.
Prahalad's work goes in tandem with the magnifecent work done by William Easterly on his book "The elusive quest for growth".
Let the people to be free to choose their own exit door from poverty, give them the means to do it by themselves, and not from the world development agencies desks.
- Interesting and insightful read, not just for business people
I learned about CK Prahalad and the BOP about two years ago doing a school project. I'm a graphic designer, so my approach is far removed from the typical business person's. After this project, I used this book to guide my senior project (design equivalent of a thesis), in which I made up a company that served the BOP in Venezuela and created a brand and packaging system for it. As a non-business person, it was sometimes challenging to follow the book, but it was not overwhelming. I agree with other comments that say that it was a bit technical (especially with all the abbreviations), but it was still approachable.
I'd recommend this not just for business people and entrepreneurs. Poverty is a world-wide issue and this book shows new and innovative ways of dealing with it. We can find uses for this theory in many different realms and disciplines and the theory forces us to think outside of the box. I was especially appreciative of the non-subsidies and the notion that poverty alleviation can come from sustainably profitable operations. I also like the idea of environmental sustainability as a must when dealing with the vast majority of the world as consumers.
I would also recommend "Out of Poverty" by Paul Polack. I liked Prahalad's position better, as Polack falls short in addressing exclusively money as a poverty factor and disregards life quality as something we should address; something that Prahalad does address. But Polack addresses an even poorer segment of the world and we can learn from both theories....more info
- Perhaps the best business book this year
C.K. Prahalad, is accustomed to rave reviews. The Economist had an excellent review of CK Prahalad's new book, The Fortune at the Bottom of the Pyramid. Eradicating Poverty Through Profits.
"Mr Prahalad reckons that there are huge potential profits to be made from serving the 4 billion-5 billion people on under $2 a day-an economic opportunity he values globally at $13 trillion a year. The win for the poor of being served by big business includes, he says, being empowered by choice and being freed from having to pay the currently widespread "poverty penalty". In shanty towns near Mumbai, for example, the poor pay a premium on everything from rice to credit-often five to 25 times what the rich pay for the same services. Driving down these premiums can make serving the BOP more profitable than serving the top, he argues, and points to a growing number of leading firms-from Unilever in India to Cemex in Mexico and Casas Bahia in Brazil-that are profiting by doing precisely that".
"IF WE stop thinking of the poor as victims or as a burden and start recognising them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up." That "simple proposition" begins a controversial new management book that seems destined to be read not just in boardrooms but also in government offices. "The Fortune at the Bottom of the Pyramid. Eradicating Poverty Through Profits" (Wharton School Publishing), is essentially a rallying cry for big business to put serving the world's 5 billion or so poorest people at the heart of their profit-making strategies.
The notion of looking to the "bottom of the pyramid" (or the "base of the pyramid" as others prefer to put it) is one that deserves plenty of attention, for a variety of reasons: growth potential, innovation potential, and the potential to make the world a better place.
As economist refers to Prahalad "He is a fierce critic of traditional top-down thinking on aid, by governments and non-governmental organisations alike. They tend to see the poor as victims to be helped, he says, not as people who can be part of the solution-and so their help often creates dependency. Nor does he pin much hope on the "corporate social responsibility" (CSR) programmes of many large companies. If you want serious commitment from a firm, he says, its involvement with the poor "can't be based on philanthropy or CSR". The involvement of big business is crucial to eradicating poverty, he believes, but BOP markets must "become integral to the success of the firm in order to command senior management attention and sustained resource allocation."...more info
- Insightful first step
A very insightful and well structured first step to understanding the challenges that developing a "bottom-of-the-piramid" market brings. Each case provides good food-for-thought and shows how companies tried in creative ways to overcome the structural challenges that developing these economies show. On the downside, I would have liked the author to focus further and to develop more content for the framework he designed....more info
- Re: "Give a man a fish, he'll eat for a day...
...teach a man to fish, and he'll eat for a lifetime" is found nowhere in the Bible, sir.
But this is:
Better is the poor who walks in his integrity than he who is crooked though he be rich. (Proverbs 28:6)...more info
- Bottom-feeding at the base of the pyramid
There are 1 billion Indians. There are a billion Chinese. There are millions in South America, Africa and Asia. The average income per year is close to the pocket money of the average American teenager per month. How can these people be served by corporations manufacturing and distributing consumer goods? Are they being taken advantage of or is there a relationship of mutual assistance here? "The Fortune at the Bottom of the Pyramid" uses interesting examples from developing countries to illustrate how capitalism can help people in these areas and how it's actually a win-win relationship.
Example in point: soap and handwashing promote health in rural India. Hindustan Lever Ltd markets Lifebuoy Soap, in packages ranging from 125 grams to 60 grams, smaller sized and priced so that someone who couldn't afford more than 4.5 Rupees (pennies) can still buy soap. Public messages about how washing with Lifebuoy can prevent stomach, eye and skin infections are promoted even out to rural villages. They partner with schools, local govenments and clinics to promote hygiene. Result? Improved health and hygiene, more sales for HLL. If HLL weren't in India selling soap and educating the public, there would be more disease. So a firm making profits has a positive effect on the public good. Other firms have taken note of HLL's success and started marketing toiletries like toothpaste in small packets, aimed at the customer who can't afford more than a few cents per purchase but still wants to clean teeth, wash or shampoo.
This book contains a CD with case studies filmed on location. What a great idea? After reading about Casas Bahia, HLL and other firms discussed in the book, you can watch a film made on site. ...more info
- Must-have for people who believe capitalism is the answer.
The Fortune at the Bottom of the Pyramid..well, this was the book I have always been looking for. The best book ever on how markets can improve quality of life for the poorest people.
There are over 4 billion people, who are relatively untouched by intense capitalism - Gucci, Speedo or AOL do not target them as a market. But why? Just because these 4 billion people do not have a per-capita of $30K?
Averaged out, even if the per capita of billions of people is $500 an year, the benefits that will accrue to them by using better services, are immense. And they can afford it.
Consider this, Dharavi, a slum in Bombay, produces goods worth $2 billion annually. Yet, most of the houses do not have access to clean water. So the residents pay a surcharge to private water suppliers. The same for loans. As the big banks will not lend to poor people who need $100 loans, esp. if they do not have all valid legal documents, the poor go to greedy moneylenders who charge 1000% interest.
Microloans - dont lend $100,000 to one person in one shot. Lend $100 to 1000 people who will get 1000% benefit each - in the process getting richer, and the loans, even if priced at 30% for any bank, will make financial sense. The default rates for microloans is much lower than for our normal bigger loans.
And you will be more impressed if you read the book. Definitely worth it, nay, necessary, for anybody interested in alleviating the poor through markets. Sustainable markets, not aid, is the answer.
There is a challenge though, how do you market $50 cosmetic products to somebody who earns $50 a month? Well, there is an answer. an answer already working in places like India. Improe your processes, and make single use packets - price it at 5 cents and see 10 million people buy it the next day - making more money for you than 100,000 rich consumers.
For more interesting insights, and case studies, grab hold of this book....more info
- Untying the Alexandrian knot
This is a fantastic book! 112 pages of theory and advice that really makes sense. You easily internalize the message! This is then followed by 5 VERY thorough and down to the detailed examples of how the theory has been practised by fore running companies in the field of 3rd world integration. It is very illustrative and initiate thoughts on how this could be followed up in your own company...more info
The author has noble intentions and some of the arguments are persuasive. But something does not quite add for me:
Solve third world poverty by making everyone consumers? Buy more plastic goods?
Some of the cases are good stories and I am not against the idea...but something is missing here. What about the mass environmental impact?
What about eradicating poverty but increasing impoverishment? Make everyone a consumer, eradicate their customs and culture, Americanize every Third World country by turning its native peoples into consumers. Sounds like a profitable enterprise for the MNCs--but not sure how much "Fortune" will be redistributed to the native peoples. I doubt much.
- How to Profit by Helping those Less Fortunate
With endorsements by Bill Gates, former U.S. Secretary of State Madeline Albright, the CEO of VISA Inernational, and One-Minute Manager co-author Ken Blanchard, this book sets up high expectations. And it meets them--with a dramatic and (dare I say) revolutionary approach to empowering the poorest of the poor around the word: not through handouts, but through a clever reinventing of capitalism. In other words, corporations can lift up the bottom through good old fashioned self-interest.
As much an economics text as one on marketing, this book has the potential to drastically change the entire world economy.
Among Prahalad's key points:
* Poor people in developing countries crave the same lifestyle enhancements as the rest of us, and will spend money if they can demonstrate sufficient improvement in their condition
* Companies that understand and harness the cultures where they operate can make handsome profits serving this underserved sector--especially where they enable massive saving of time, productivity, travel, etc.
* When properly structured, offers to the bottom of the pyramid can actually be more secure, with lower default rates (especially when using self-help groups as in the well-known microlending model pioneered by Grameen Bank and others)
* The bottom of the economy is a fantastic proving ground for new processes and products that can then be "exported" up the economic ladder (as one example: a prosthetic technology that created a superior artificial foot that can be manufactured and installed for $30 or so, versus several thousand dollars in upper-class cultures)
* In many cases, the bottom can leapfrog some of the popular technology infrastructure in more developed locations and go to something better (e.g., skipping petroleum fuels and grid-based power lines and going directly to on-site solar, avoiding not only the significant infrastructure costs of rural electrification but also the issues of global warming and ongoing consumption cost)
While he's a bit too rah-rah for my taste about the positive role multinational corporations can play in all this, and he's willing to tolerate financing plans that would be usurious in a modern consumer society (though still far cheaper than dealing with unregulated local moneylenders), he shows over and over again, both in the technical/theoretical part of the book and in the much more readable case studies, that profit can provide a great incentive to improve the lives and facilitate empowered decision-making among the very poor.
As someone who has spent my entire life focused on improving the world, I find this very exciting, and would love to see this as a required text in every class on economics, marketing, and international policy.
Shel Horowitz's award-winning sixth book, Principled Profit: Marketing That Puts People First, demonstrates how to build a business around ethics, environmental sustainability, and cooperative practices--and how to develop marketing that highlights those advantages....more info
- An unusual book by a great expert.
C.K. Prahalad offers his unique insight on the emerging countries with a special focus on India. The book presents unusual statistics about the size of these markets. Prahalad, presents a good case about the possibility of profits in these markets as well as covers the challenges that these markets present to companies interested in doing business. However, when it comes to Public policy the author moves from one topic to other-- corruption, effective governance, communism vs democracy, etc without effectively making a complete case about each one. The cases are very beautifully covered and the overall book is very interesting for readers interested in India and other emerging markets and their potential. This book can be better summarized as a book on how to profitably do business in these markets rather than a book on eradicating poverty. The author tries hard to relate the two....more info
- at last a pragmatic approach to develpment
Prahalad'book "the fortune at the bottom of the pyramid" demonstrates the importance to get the people we are "supposed" to help to get involved. The bottom up approach is in line with William Shaffeerly and David Bornstein books where the people are key to any lasting development. The top down approach a la Jeffrey Sacks are fine for the politicians but did not bring much results after all these years. It is time for a change in approach and the Nobel Price to Dr. M.Yunus is very encouraging....more info
- Extraordinary claims require extraordinary evidence, and anecdotal evidence is not proof
Last year this book became a best seller hit among the developmental community at Washington, D.C., to the point that all bookstores at Metro DC run out of it. With notorious and well publicized praising comments from Madeleine Albright, Bill Gates and the like, I bought it too, but just to discover all the frenzy was undeserved from the viewpoint of poverty eradication.
Undoubtedly Mr. Pralhad's research demonstrates there are plenty of opportunities to do good business among the poor at the BOP (bottom of the pyramid), for them to benefit from the products and services not available now, and for some of them to go out of poverty by becoming entrepreneurs (market penetration is always limited). I agree on these conclusions, as commented extensively by the previous reviewers, and without a doubt this book will become a reference in many Business Schools. But to assert that this strategy will eradicate poverty and bring development is plain sophistry. As Carl Sagan said "Extraordinary claims require extraordinary evidence".
Why sophistry? Regarding the poverty eradication claimed by Mr. Prahalad I will try to highlight some of the main flaws in his rationale and lack of sufficient evidence:
1. Despite the consideration of several cases from around the Third-World, most of the discussion and arguments to build the framework are related to India, excessively. The conditions of the poor in Latin America are quite different, and often, they have better public services available to them. On the other hand, many African countries have worst conditions. So you can not reach valid conclusions based solely on a country with such unique cultural and ethnical conditions. For doing business the cases are fine, especially for India or China because they are such huge markets at the BOP.
2. Wealth creation is hugely overestimated. Poor entrepreneurs and their immediate family will undoubtedly benefit from these new economic activities, but the framework lacks an explanation about how these oases of welcomed capitalism will trickle-down to the rest of their neighbors and poor villages. The implicit assumption is that everybody at the BOP has to become an entrepreneur for this strategy to work, because by just having access to affordable consumer products it seems very unlikely that poverty will be eradicated. The proposed framework is just good for doing business and for the poor to have access to new services and products, but where is the sustainable "fishing industry" for the rest of the poor population? The cases are very unique, islands of excellence, and with limited potential for a population the huge size of the BOT to bail out of poverty in significant numbers.
3. The analysis lacks the historical, cultural, legal and socio-economical background for a given country or region, and this consideration is fundamental for a proper analysis on sustainable development. Even when Mr. Pralhalad correctly identifies lack of education, corruption and the size of the informal sector as barriers for development and doing business, he then oversimplifies a lot on how to overcome these key issues, and again, an isolated Indian case is used as the magic formula to solve the problem through information technology. In fact, at the end of Chapter 6, within the conclusions, he recognizes that the illustrations he provides "are but islands of excellence in a sea of deprivation and helplessness". As the development community knows well, these successful stories are very hard to replicate. In Latin America we have the outstanding cases of Chile, Uruguay and Costa Rica. In Brazil, we have the cases of the Southern states of Santa Catarina, Paran¨¢, S?o Paulo and Rio Grande do Sul. All of them very developed as compared to their neighbors (in terms of income, education, health, etc.), but despite all efforts, no one has successfully reproduced these islands of excellence at a scale that makes a difference.
4. An example will help to understand how superficial the cases are from a point of view of development and poverty eradication. The Brazilian case of "Casas Bahia" lacks the consideration of the socio-economic environment of the country, especially the case omits to mention key characteristics of the financial and credit markets (for those interested in this particular case from the point of view of business, I recommend you read "Samuel Klein e Casas Bahia: Uma trajetoria de Sucesso", Novo Seculo, 2005, this is a real and really impressive business success story). Mr. Klein successfully, by trusting the poor, built an empire that today is still one of the few option many mid- and low-income families have to buy the first computer for their children going to college in Brazil. But, let's see why the market share for credit cards is only 4%, and why it is not a real threat for Casas Bahia own financial system as stated in the book, as well as why there is not much in here to help eradicat poverty in Brazil. Annual inflation today in Brazil is in the order of 3-4%, and the Brazilian currency, the "Real" have been steadily revaluating against the dollar for the last 3 years. However, interest rates in Brazil are sky-high, a legacy of the hyper-inflation times of twenty years ago. Interest rates for well-known international credit cards are 9-11% per month, which compounded translates to an annual rate close to 180%, regardless of whether you're poor or rich. Today retail chain stores of this type charge around 3% per month, embedded in the price of the consumer products, so the consumer doesn't know up-front the real price. This translates to a compounded rate of 43% per year. Often if you try to pay upfront, there is no discount. So where is the real benefit for the poor? Or are they just getting every day more indebted, and spending money on fat interests that they could have used to buy more or better food or better health services for their kids. I do not see where poverty eradication fits in this case. Obviously Brazil has a problem of lack of real competition in the capitalist sense; even the branches of American Banks doing business in Brazil charge these exorbitant rates. As a reference for the readers, you can buy a 30Gb iPod in Brazil for the "reasonable" amount of US$1,000, payable in 12 installments, and for the high price we also have to thank the federal government high taxes on almost everything. Coming back to the case, as an additional "benefit", you only can make the payments in person at stores of the retail chain, just to make sure the poor are tempted every month and come back for more when they are close to payback that debt. That's why there is a 77% of clients who make reapeat purchases as the book reports. Not surprisingly the case description mentions the criticism "that Casas Bahia simply exploits the poor and charges them exorbitant interest rates", but neglects to present a due explanation of why this is not truth, and simply disregards the cristicism.
5. Finally, Mr. Prahalad is extremely optimistic. At he end of Chapter 6 and in his own words: "I have no doubt that the elimination of poverty and deprivation is possible by 2020". This prophecy speaks by itself about the reliability of the analysis. And again, let's remember that extraordinary claims require extraordinary evidence. All the book presents is anecdotal evidence, which is not proof as any scientist knows, and the framework presented has no predictive power, much less to assert that poverty will end by 2020.
Unquestionably an excellent business book, and a very innovative one, but just for that, business. That's why to me it only deserves 3 stars. On the other hand, not much value-added in there for doing real sustainable development across the board, as the author insinuates and some of the readers think, and certainly not much for real poverty eradication. For that outrageous addition to the book's title I took the other 2 stars. The "Erradicating poverty through profits" part of the book's title should be erased, so the book really deserves the 5 stars most reviewers gave to it (and as the previous reviewer rightly complained, the cases were really awfully edited for the paperback edition, even with repeated sentences). Definitely this book is not recommended if you are serious about new ideas for sustainable development. For a real book on that subject, read the recently publicated The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It by Paul Collier, though its scope refers mainly to very poor African countries, it is an example of a serious and proper approach to the problem of eradicating poverty. To understand the complexities of promoting development, you may also read Making Globalization Work by Joseph Stiglitz. These two books will clearly ilustrate why "The Fortune at the BOP" is not a book on development, and absolutely, no Nobel Prize is deserved....more info
- Must read book from Wharton School Publishing!!!
Looking to the poor for new markets The Fortune at the Bottom of the Pyramid,by CK Prahalad( Wharton School Publishing) Conventional wisdom states that "the poor will always be with us". This attitude and perception has tended to determine the approaches that we have adopted to deal with a most undesirable situation - it is unacceptable that enormous numbers of people live in conditions that are considered to be deprived of the basics of life.
As a result the poor have tended to be perceived to be an issue that can be addressed only through a process that is best described as charity or transfer of resources. CK Prahalad has written widely on business strategy and success in the future - the worldwide best-seller Competing for the Future is the best known of his books. In this book he is applying a simple dictum to the challenge of the poor, that is if current approaches are not making inroads into the problem, then it is likely that the approaches need to be changed, not that we just work harder at those "old" approaches.
This means we need to find new and innovative approaches to the challenge of the poor. One of the more important assumptions that Prahalad makes is that the poor need to seen as a market, but a market that is different in very important ways from the markets that the average, economically empowered person or organisation perceives. This assumption has some immediate consequences - all of the traditional business concepts are a part of the solution but each and every one of those traditional concepts needs to be applied from a new and different perspective.
As a result this book is a practical example of the application of innovative thinking and innovation to an intractable problem - the more than 4-billion human beings who do not form part of the target market of the organisations that are driven by conventional assumptions about products, services, value and needs. In a recent article, Geoffrey Moore of The Chasm Group identified eight different sources of innovation in business (disruptive innovation - "new to the world innovations of product"; application innovation; product innovation; process innovation; experiential innovation; marketing innovation; business model innovation; and structural innovation). Prahalad has taken the view that the challenge presented by the 4-billion at the bottom of the economic pyramid will not be resolved unless innovation and innovative approaches are applied in each and every area of the business process. The starting point is the assumption that the poor are a market. What makes this book so very powerful are the examples and case studies produced to support the ideas.
Case studies of profitable businesses operating in the poor communities of India, Mexico, Brazil, Kosovo, Peru and other nations address products and services as widely different as salt and soap, health services, home building, financial services and other retail operations. The common thread is the target market and the profitable innovations that have been applied to supply responses to needs of this often ignored, large community.
CK Prahalad has written a book that challenges so many conventional theories about the poor and economically deprived that it will be quite controversial. But it also illustrates the power and value that can be gained from innovation in all aspects of business. This book is required reading for every person who considers the wellbeing of the poor. It is essential reading for every business person and everyone who is concerned about the efficiency and effectiveness of today's economic system.
Its content is a challenge to the way in which we approach the world. And the responses to the challenges are illustrated by powerful and convincing examples. It will be a very closed mind that does not receive an injection of innovative thinking and enthusiasm for the opportunities that can be created by adopting a different and innovative perspective of all of our activities - whether at the bottom or top of the economic pyramid. ...more info
- How to eradicate poverty through profits
As Prahalad explains in his Preface, he wrote this book to suggest and explain a new approach by which to solve the social and economic problems of 80% of humanity. His approach would mobilize the resources, scale, and scope of multinational corporations (MNCs) -- their investment capacity -- in a co-creative partnership with localized nongovernmental organizations (NGOs) in order to formulate and then implement "unique" solutions to the problems of 4 billion people who live on less than $2 a day at the bottom of the "pyramid" to which the book's title refers. "The process must start with respect for Bottom of Pyramid consumers as individuals. 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. That is a challenge."
Prahalad carefully organizes his material within three Parts. 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 to 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." All of the companies share the same concern: "They want to change the face of poverty by bringing to bear a combination of high-technology solutions, private enterprise, market-based solutions, and involvement of multiple organizations." As for Part III, it is provided as a CD which consists of 35 minutes of video success stories filmed on location in the BOP in India, Peru, Mexico, Brazil, and Venezuela.
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. Building self-esteem and entrepreneurial drive at the BOP is probably the most enduring contribution that the private sector can make." As this book's subtitle correctly suggests, the ultimate objective is to eradicate poverty through profits...initiating and then sustaining what will be in fact, a win-win-win engagement of MNCs, NGOs, and the poor themselves.
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 for innovation in those markets such as "creating a new price performance envelope" and "education of customers on product usage." The BOP focuses attention on both the objective and subjective performances of the given product or service. Moreover, it must "also focus on the need for 30 to 100 times improvements in price performance. Even if the need is only for 10 to 20 times improvement, the challenge is formidable."
Although Prahalad has a compelling vision, he has neither illusions nor delusions about the difficulty of fulfilling that vision when undertaking the "new approach" he recommends in this book. His vision is bold, indeed of global proportions. However, his feet are planted firmly on the ground at the bottom of an enormous pyramid, one whose complexities are exceeded only by the unprecedented entrepreneurial opportunities it offers to help solve the social and economic problems of 80% of humanity. Given the importance and the urgency of the various issues which Prahalad explores so brilliantly in this book, there seem to be no acceptable alternatives to the approach he proposes.
Those who share my high regard for this book are urged to check out Vijay Mahajan and Kamini Banga's The 86 Percent Solution: How to Succeed in the Biggest Market Opportunity of the Next 50 Years and Kenichi Ohmae's The Next Global Stage: The Challenges and Opportunities in Our Borderless World.
- Transforming the BOP into a Global Opportunity
The book begins with an affirmative "yes" to the question of whether the BOP is a huge market that can be effectively tapped for a win-win outcome for the poor across the globe and the multinationals who serve them.
I was keenly awaiting this book after reading the path breaking "The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else" by Hernando Desoto. This book as acknowledged duly by Prof Prahalad has been an eye opener in unlocking the vast untapped potential of dead capital and entrepreneurial abilities of over two thirds of the world's poor who are trapped outside the bell jar of market based economies. Prof Prahlad shows us the way to social transformation and economic freedom while providing choice with dignity for the individuals through a market based ecosystem involving large multinationals, NGOs, Governments and the individuals themselves.
Before reading the book it is advisable the see the videos. These are true case studies across continents and industry verticals at the BOP. One cannot resist the temptation of reading the book from cover to cover soon after.
Addressing the huge BOP market needs innovative approaches. Large multinationals that try to transplant high end technologies from developed countries into developing worlds often meet with markets that are "not yet ready" or "too small". Instead they need innovative approaches to develop products that address the needs at the "lower end" of the market. Perhaps Prof Clayton Christensen's theory on disruptive innovations can be well utilized for this. Incumbents ignore these segments that are huge market opportunities for new entrants.
Prof Prahalad introduces the process of "inclusive capitalism" as a means of viewing the poor as individual consumers, creating choices with entrepreneurial skills, and providing them the dignity and path to prosperity. One of the important dimensions to achieve this is to ensure "Transaction Governance Capacity" or TGC which is basically the availability of the necessary legal framework for honouring market transactions and enforcing contracts. This reminds me of another recent book "Culture and Prosperity" by the eminent economist John Kay that talks of "Disciplined Pluralism" in developed countries.
The case studies prepared by Prof Prahalad's students under his supervision book are excellent. I could really appreciate the Indian cases due to first hand interaction with some of these household names here in India.
Bound to be not just another excellent business book, but a roadmap for business strategy for multinationals who do not wish to ignore two thirds of humanity....more info
- A new innovative thinking that opens the traditional mindset
Historically, there has been a negative image relating to corporations and people of the developing countries. The minute someone mention "business" and "the developing countries", everyone assumes the consequence of evil capitalism exploiting cheap labor.
This book has really opened up this topic and allow the public to understand that it is possible to use business as a positive solution for eradicating poverty. On the other hand, corporations should look at the successful examples described in this book and realized that could be profitable to bring products to the developing world, as long as companies undertand to be innovative with their business strategies. The result is a win-win situation if done properly.
I read this book to try out the whole Wharton Publishing launch and I was very satisfied. The stories are extremely inspirational and I recommend EVERYONE to read this....more info
- Great frameworks on doing business in emerging market!!!
For thought leaders, consultants, MBA students, corporate and social workers, this is a must read. It has more "aha" statements than any book I have ever picked up. It is essential reading for educators. The growth rate for "bottom of pyramid" demands that we begin to look seriously at how business interface with this segment. Reading Dr. Prahald's book will put you on the right path for your journey....more info
- Prahalad on Innovation, Social Good and Profitability.
This is a well researched book in which Prahalad explores how disruptive innovation if harnessed properly can lead to huge profits for the corporations involved and high impact social well being. The key however is to get the ground breaking idea there is no set approach to getting the same, but he has done a good job of explaining how the idea can be scaled.
The book will be phenomenonal if it could have concrete numbers and a comparative analysis of what the value add was by each idea. Certain approaches for decreasing costs etc. are explained but the lack of numbers hurts.
All in all a great read.
- C. K. Prahalad Does It Again
The Fortune at the Bottom of the Pyramid is one of those rare books that presents important research findings, and then explains in a concise and compelling style how to explore opportunities in the world's largest and fastest growing markets. I have given this book to several business partners who will benefit from C.K. Prahalad reseach.
Hats off to C.K. Prahalad, who was not content to sit back and grin after co-authoring the highly successful Competing for the Future, but tackled a book that should make an even greater impact on the future of businesses, countries and nations....more info
- One of my favorite books of 2004 year
This has been one of my most favorite books of 2004. It is a new look on how the poverty problem could be solved. Should it mandatory reading in the MBA programs!!!...more info
- This book has a message for all businesspeople
While this book may not be directly relevant to the present lives of most Americans, it is something every businessperson should know because of the way the realities these ideas attempt to address are going to affect the products we make and how we make them everywhere on the planet. It is not that we will all be reduced to the lowest rung of the ladder, but that the high technology and super efficiencies required to reach the four billion people at the bottom of the period will have to inform what we build and the ways we build them in the rich countries as well.
Prof. Prahalad and his students do a fine job of addressing what the Bottom Of the Pyramid (BOP) represents, the opportunities, the challenges, and their view of what the requirements for success will be. The book is in three parts. The first section is six chapters describing the market, the kinds of products the BOP needs, the evidence for it being a global market, the ecosystem for wealth creation (this is mostly the environment of government, regulation, banking, finance, AND the physical environment), the revolution in low cost transactions that is already underway to reduce corruption, and the social transformation all of this can represent.
The second part of the book is a series of case studies illustrating the principles and ideas discussed in the first section. I found the case studies fascinating. The cases are about bringing housing to people living in flimsy huts, innovative encapsulated iodized salt, introducing affordable soap for washing hands and improving health, a special prosthetic foot that meets the special needs in India (they don't wear shoes in certain places and sit on the ground - western prosthetics don't work well in those situations and they cost too much), an approach to eye surgery based on McDonalds methods of training and standardization that is bringing eyesight to hundreds of thousands at 1/10th the cost (or less) of Western care, and others.
Frankly, as I read these things I thought about how Sears and others made fortunes brining more affordable goods and finance to rural and poor areas in American a century or so ago. It really is a lot like that. However, our urbanization and wealth have caused us to forget that kind of innovation at home. It delights me that it exists wherever you have smart people in hard circumstances with even a small amount of freedom.
The third part of the book is a series of videos on a CD that illustrate these cases. The videos are very well done and bring the power of the cases to life.
A fine book on a topic that should be considered by all, but especially by businesspeople....more info
- Looking at Ethical Profits from the Global Poor
Rather than teaching the poor how to fish you should provide them with the information they need to reach a life beyond fish and rice. That goal is nicely laid out by author C.K. Prahalad in his wonderful volume "The Fortune at the Bottom of the Pyramid."
Prahalad correctly points out that it is the poor who stand most to profit from free, global markets. While that is true, the goal cannot be reached without a government being willing to assume a leadership role in making transactions easier for customers and accepting the responsibility of helping to create wealth rather than merely taxing wealth.
Prahalad shares the belief of many that poverty and non-functional economies are not caused by Western dominance but by the inattention of the West. The author issues a call to change, insisting that business no longer can afford to neglect a market of 5 billion people who already are consumers and will help business generate even more profits once these 5 billion become more highly-informed consumers. It is information, not charity, that provides meaningful relief, stresses Prahalad, who calls upon business leaders to make meaningful and sustained improvements in the lives of billions of people.
In case study after case study the author provides evidence for his premise that the win-win formula of innovation offers the dual function of helping the poorest of the poor while at the same time generating corporate profits.
When you take a close look at India and its opportunities for successful business intervention, you see further evidence for Prahalad's assertion that the greatest potential for economic growth is in the billions of people living at the bottom of the economic pyramid.
By Gunjan Bagla
Author of Doing Business in 21st Century India
- The Top Of The Pile
I think it is fair to say that it is rare that a book falling into the business category can also be one that can also be inspiring. This book falls into that category. The books main premise is that the worlds 4 billion plus people that live in rather dismal poverty are never going to be able to claw their way out of that poverty based on insufficient charity. The author believes that what is going to get these people a better quality of life is business investment. Global organizations can profit by establishing locations in these under serviced markets, sell a base product at a marginal profit and increase the well being of the community. The more of this investment, the more wealth is generated within the community and the more business opportunities there are.
The author gives a basic volume business case study for how to make a profit in these rather depressed markets. He also claims that even though the populations are so poor, there are so many of them that any consumer staple product could provide sustainable revenue. The author wraps his whole premise up with dialog around how major global organizations are hitting the wall within the western world in total sales and to obtain real growth they are going to have to start looking to the less attractive parts of the globe. The author finishes by stating that business can not only increase share holder value, but also make meaningful and sustained improvements in the life's of literally billions of people.
Overall I found the book well written and enjoyable. I got carried away in the optimistic win / win scenarios the author was detailing. Hey why can't this work I thought, look at all the good it would do. Well time will tell, the pessimist in me sees a good amount of risk that would keep a good chunk of the business world at bay. Regardless, the book is a compelling, interesting and inspiring book that is well worth your time....more info
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