The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School...

The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing ... | CK Prahalad | The Top Of The Pile

books:

The Fortune at the...

	The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing ... CK Prahalad Wharton School Publishing, 2006 - 304 pages average customer review:based on 63 reviews view larger image
	for more information click here

highly recommended

"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.

Enjoy,

Christian Hunter
Santa Barbara, California

for more information click here

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.

for more information click here

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.

for more information click here

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.

for more information click here

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

for more information click here