SC Johnson Funds Startups in Africa
Wednesday, November 15, 2006
SC Johnson’s experiment will test a theory about doing business at what’s called the “base of the pyramid”. That’s where the 4 billion poorest people live. At the top of the pyramid are the 600 million people earning more than $15,000 a year, where most big companies do business. In the middle are the 1.4 billion earning $1,500 to $15,000 a year.
Do the slum-dwellers of Nairobi, Kenya, really want Windex and Ziploc bags?
You might not think so. But SC Johnson Co., the family-owned company with $7 billion in global sales that brings us Windex, Pledge, Raid and Ziploc bags, is setting up shop there. It’s part of an attempt to build profitable businesses that reach the 4 billion poorest people on earth, those who live on less than $5 a day.
It won’t be easy. “Kenya is never the same, day to day, week to week,” says Scott Johnson, vice president of global environment and safety at SC Johnson. “It’s never what it appears to be, at least to someone sitting in headquarters.”
SC Johnson’s experiment will test a theory about doing business at what’s called the “base of the pyramid”. That’s where the 4 billion poorest people live. At the top of the pyramid are the 600 million people earning more than $15,000 a year, where most big companies do business. In the middle are the 1.4 billion earning $1,500 to $15,000 a year.
Behind the theory are two of the most innovative business thinkers in academia: Stuart Hart of Cornell, author of “Capitalism at the Crossroads: The Unlimited Business Opportunities in Solving the World’s Most Difficult Problems” (Wharton, 2005) and the University of Michigan’s C. K. Prahalad, author of “The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits” (Wharton, 2004).
Hart is helping to guide the SC Johnson project. The goal, he explained last week at Business for Social Responsibility’s annual conference, is to help the company serve a vast market in ways that are sustainable and culturally appropriate.
Companies that do it right, he argues, will not only reach new customers; they will develop innovative products, business models and technologies, and they will help lift people out of poverty. “The question is, can multinationals figure it out?” Hart asks. “It takes a very different mindset.”
Continue reading “SC Johnson chases the Base of the Pyramid”
