Bottom of the Pyramid and Beyond

Wednesday, July 31, 2013

In the year 2002, C.K. Prahalad and Stuart Hart published a groundbreaking article in Strategy+Business magazine that introduced to the world the idea of the Bottom of the Pyramid (BOP). The idea, which says that the poor present a vast untapped business opportunity, and if companies serve the poor, they can help eradicate poverty and also make a profit, revolutionized business thinking. Funnily though, before 2002, the idea had no takers: various management journals including Harvard Business Review didn’t publish Prahalad and Hart’s article for nearly four years because it didn’t have enough evidence in terms of multinational companies who had successfully experimented with the idea.

Years later, the idea caught on. Companies like Unilever, Cemex and S.C. Johnson came up with innovative business models to tap the so-called BOP markets in places like India, Brazil and Kenya.

Today more than a decade has gone by, and the idea has come in for some amount of criticism as well. Some of the most vocal critics, such as University of Michigan’s Aneel Karnani, have accused the model for being ‘exploitative’ and ‘imperialistic’, and for viewing the poor only as consumers.

Source: Forbes India (link opens in a new window)

Base of the Pyramid, business development