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Next Generation Business Strategies for the Base of the Pyramid: New Approaches for Building Mutual Value epub

by Ted London

Next Generation Business Strategies for the Base of the Pyramid: New Approaches for Building Mutual Value epub

ISBN: 0137047894

ISBN13: 978-0137047895

Author: Ted London

Category: Business books

Subcategory: Management & Leadership

Language: English

Publisher: FT Press; 1 edition (November 22, 2010)

Pages: 288 pages

ePUB book: 1738 kb

FB2 book: 1968 kb

Rating: 4.5

Votes: 672

Other Formats: doc lrf lrf doc

Muhammad Yunus, Head of Grameen. Such ventures can go on to achieve the higher purpose of BoP businesses: poverty alleviation. Ratan Tata, CEO, Tata Industries.

In Next Generation Business Strategies for the Base of the Pyramid, Ted London, Stuart L. Hart, and six leading BoP thought and practice leaders show how to apply today’s most significant BoP innovations, techniques, and business models.

These second-generation business strategies have remained invisible to many leaders in the for-profit, non-profit, and development communities-until now. In this book, Ted London, Stuart L. Hart, and nine leading BoP thought and practice leaders show how to apply today's most. Hart, and nine leading BoP thought and practice leaders show how to apply today's most significant BoP innovations, techniques, and business models.

Introduction: Creating a Fortune with the Base of the Pyramid 1. Ted London, William Davidson Institute . Ted London’s chapter addresses how venture leaders can maximize the chances that their business development efforts in BoP markets will succeed. Ted London, William Davidson Institute & Ross School of Business, University of Michigan; and Stuart Hart, Johnson School of Management, Cornell University.

The article introduces London's Base of the Pyramid Impact Assessment Framework, a tool used . In late 2010, Next Generation Business Strategies for the Base of the Pyramid: New Approaches for Building Mutual Value was published.

In late 2010, Next Generation Business Strategies for the Base of the Pyramid: New Approaches for Building Mutual Value was published.

More and more enterprises are seeking to craft winning "base of the pyramid" (BoP). What is Kobo Super Points? A loyalty program that rewards you for your love of reading. Explore rewards Explore Kobo VIP Membership.

Next generation business strategies for the base of the pyramid: New approaches for building mutual value. Making better investments at the base of the pyramid. Pearson Education India, 2010.

Next Generation Business Strategies for the Base of the Pyramid. The base of the pyramid (BoP) literature is grounded in the proposition of mutual value creation, an important but not yet well-tested relationship between business development and poverty alleviation

Next Generation Business Strategies for the Base of the Pyramid. The base of the pyramid (BoP) literature is grounded in the proposition of mutual value creation, an important but not yet well-tested relationship between business development and poverty alleviation. This paper begins to address this gap by assessing how business ventures serving BoP producers address local constraints and create mutual value View. Creating mutual value with base of the pyramid producers.

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During the last decade, first-generation "Base of the Pyramid" (BoP) ventures focused primarily on "finding a fortune at the BoP" by selling existing goods to and sourcing familiar products from the world's four billion poorest people. Many of these initiatives did not scale, and some failed outright. But through that experience, crucial lessons have been learned. Innovators are now succeeding--thanks to a more sophisticated and nuanced approach based on "creating a fortune with the BoP."   In this book, co-editors Ted London, Stuart L. Hart, and other leading BoP thought and practice leaders show how to apply these second-generation BoP innovations, techniques, and business models. You'll learn how to build successful business ventures, create sustainable business ecosystems, design new technologies with the BoP in mind, and even transform entire sectors through collaborative entrepreneurship. Key lessons to be learned include   Roadmaps for Success * A roadmap for venture development * Patient capital and innovation for the BoP   Strategic Opportunities * The "Green Leap" and the BoP * Turning BoP needs into markets   Effective Implementation * Understanding the BoP at the micro level * Reframing design for the BoP * Scaling up BoP ventures
Dr. Hart and Dr. Landon began their collaboration and activities in the Base of the Economic Pyramid almost a decade ago. Streams of publications, workshops and collaborations have followed as enterprise and civil society began to address economic development for the poor. I have followed their work almost since the beginning, as they seek to define and understand how BOP markets work and most importantly how enterprise should approach these markets for the good of all.
For every success in the BOP by western organizations, there are hundreds of failures due to fundamental misunderstandings about these markets and consumers. Hart and Landon continue to clarify and report both successes and failures, and most importantly, both are in the field with colleagues, collaborators and students, seeking successful approaches for "sustainable enterprise" in these markets.
New models and experiments in enterprise structures are emerging and the collaborative approach of this book and the elaboration in the introduction on how the metaphor and activities of the BOP have evolved are fascinating. The undue criticism of their early metaphors of this important market demographic has now been set aside and the various authors have captured in this book, the transformational work that is taking place throughout the world. Bravo!
Kudos to you both and other authors for writing a ground breaking book clarifying many early misconceptions about BOP. Your collective effort will be enormously valuable to those who are very passionate about solving key challenges for BOP. I hope that your research and book will have even more impact. I recommend your book to anyone interested in building BOP solutions. In fact, I am already planning to recommended it to organizations (Indians For Collective Action, Pallium-India-USA, ICA Social Entrepreneurship) where I chair or advise.

Though I have gained immensely from your book, I found many critical gaps based on my working experience with BOP world. I am hoping that you will review this unique perspective as it does require rather different dialog with some of the players described in the book. It is possible that some issues may require further study and I am willing to assist you in the process should it be desired. Finally, I hope that you will cover them in next revision, if you agree that they are genuine gaps. Before people starts thinking of building BOP empire, to be entrepreneurs needs to be aware additional traps not covered in this book.

I rate this book 5 star in spite of pointed gaps in my review below, as I don't see these gaps in the book but rather gaps that needs further attention. The most interesting chapter for me was Chapter 3, "Taking the Green Leap to the Base of Pyramid", where author gives a sharp contrast to two shades of green technology approaches - "Green Giant" vs "Green Sprout". Author makes an argument that is very fresh and thinks that Green Sprout approach started from BoP can eventually improve model for the ToP, as well. Chapter 3 describes debate a rather visionary argument based on frontal assault borrowed from military dictionary. Primary thesis as I see is that this new assault can be started by incubating sustainable technology at the poverty at the base. The Green Leap: Entrepreneurial Judo is likely to succeed when there is a critical mass is created before this innovative approach can work. Though intention is very noble, I would like to highlight that examples like LifeSprings, Ecotact, WHI, D.light are still not scalable enough and approaches described in the book for example Patient Capital are not necessarily going to yield any better results. My suspicion is based on my following factors -

1. People Participation: Remember history of great social entrepreneurship is there but still limited. Two best examples that I can give from my childhood progressive home state of Gujarat, India are SEWA and NDDB. Self Employed Women's Association (SEWA) is a membership-based organization of the poor self-employed women workers. These 1.3 million trade union members work in the informal sector of the economy and do not have a fixed employer-employee relationship. SEWA's main goal is to organize the women worker's for full employment and self reliance. NDDB empowered millions of small & marginal farmers through village dairy cooperatives.

These models have shown that unless people are participative in overall solutions in income generation, it cannot be a sustainable solution. These and Grameen examples in Bangladesh have demonstrated such a successful social enterprise model. However, they have also shown that they are very complex and messy, takes many years to build and they are not easy to replicate.

2. Incubation and Patient Capital: I applaud concept of patient capital but there are few issues that author needs to further review. This struggle is a first struggle needs to be own up by developing countries before you replace Green Giant approach with Green Sprout for TOP. To do that unless you enable them in right way, you will never be successful.

Look at the example that have been given in the book. Most examples in the book have been lead by a foreign social entrepreneurs, list of authors and even 100 attendees at CSR conference. Though, I applaud and congratulate their role in building vision and early solutions, I believe that critical mass cannot be created until we have startup culture ready to transform social leaders ready to create 100s of successful social startups partnering with each other and sharing knowledge with each other rather than current competing culture. This battle ultimately belongs to a land where there are such radical problems. The ultimate factories should come from there . Patient Capital are making same mistakes that Foundations made forever. Foundations either spent enormous amount of money by working with distant NGOs and spent large amount of donor's money by implementing costly social impact frameworks to demonstrate NGO success stories or relied heavily on well known horses like Barefoot, Grameen or SEWA. However, remember both founders and these large NGOs are notorious when came to sharing knowledge outside and transparency. The way Chapter 2 describes Patient Capital, I think that they would be making the same mistake as foundations did with their precious money. They are ultimately working on creating discrete social startups which are incapable of cooperating between each.

Until Gandhiji demonstrated exploitation by British Raj to Indian people and involved them in their struggle, independence movement didn't start. Until Egyptians rose up or their rights, Mumbarak regime was very happy with long status quo in Middle East. Rather than betting on successful social startups, Patient Capitals should be channeling their limited dollars by creating open, cooperative and shared models, so that 100s of other startups can emulate right models. Their focus should be to strengthen many fledgling local incubators like some I met during my recent visit to Gujarat, India. These incubators are rather not strong but they do understand following factors better than anyone else. Ultimate goal is to create a strong working models in key areas like low tech healthcare, public healthcare distribution, sustainable energy and let local progressive government come and eventually fund sustainable research for their own human index improvement. These cooperative incubators with the help of Patient Capital should be transparent enough that anyone can take knowledge globally. My point is that Patient Capital has limited dollars and if they continue with their current path, they would be making enormous mistake, as they are not every good at understanding important socio-cultural factors such as following.

a) Social Startup culture: Though it is important that next generation scalable solution come from the Indian, African and Chinese entrepreneurs as they have most at stake many culture are not innovation centric. This will require a radical thinking by those incubators about how to transform current auntie factor into a culture of social enterprise.

b) Glocal Locations: I am happy to see emergence of Acumen, E+Co, New Ventures, Root Capital and TechnoServe, However, I am highly suspicious about their ability to drive real impact until they move their HQ to India and/or Africa and change their approach like I have described above. They will completely miss out importance of mentorship without fully understanding public health or developing issues for poor. I really don't think that that they can rely on building satellites in those countries, as my recent trip to India confirmed a massive skill gaps in management and many other area, a critical role (even more than seed funding) that Patient Capital should be providing. I happen to believe many of these country do have a capacity to raise the fund but there is no way they can manufacture skill necessary to succeed.

c) Value Chain: Product scalability for BOP is still in nascent stage. In my humble opinion many of the examples described in the book may scale up to certain level but they are unlikely to reach critical mass or killer application similar to mobile applications. I recommend building series of working models that can demonstrate a working value chain like we have seen in many existing products in TOP. For any incubator to succeed, it needs various key elements and demonstrate that a complete value chain works between product vendor and product consumers. These factors are access to right size capital, access to variably of consumer patterns for product input, and distribution network and BOP funding for a product purchase. BOP thought leaders and practice leaders like you should be first proposing a working models that can succeed with following unique characters.

a. Example 1: Distribution Network and Access to BOP Product Purchase Exists: Though most of the BOP is unorganized and do not have a well defined market, I do believe that there are few rare examples where market is already there. For example SEWA already has more than 200000 women requiring smokeless chula or every family needing solar lanterns, and need for replacing current diesel tech with alternative energy for salt workers. Though, examples of SEWA/NDDB/Grameen are rare they do exist. Hence, I suggest working with these organizations to demonstrate a successful iterative process and shared process between product vendors and co-ops who manages their own funding and distribution.

b. Example 2: Above doesn't exist: I believe most other product falls into this category where product vendors do not have a direct access to existing market that SEWA, NDDB, and Grameen can provide. I have seen few examples that is trying to build a complete product life cycle like D-REV, KickStart and Villgro. Thought with an exception of Villgro, first two are based in US. I happen to believe that people groomed in western culture, studied in Ivy League, and successful career in corporate world, cannot build effective solution that BOP really needs, unless they personally move their HQ in one of those counties.

Building a working scalable model should be a top priority and I believe that no one can do better job than Patient Capital . Before they sprinkle their precious dollars, I hope that they rethink their priority.

d) Participative Model for Government: In developing countries like India, ultimate rollout of scalable approach must involve leadership of local government. Though there are many challenges to this including inefficient and corrupt governance, this entity must become a box in a in your Green Leap: Entrepreneurial Judo as ultimately they are responsible to show improved human index. That said developing country governments have tried to implement many top-down solutions without much success. Social entrepreneurs role should be to demonstrate enough large scale impact that government feels obliged to act upon. I do believe water example follows this and you have already covered it appropriately in your book.

e) Bet on right solutions: Developing fund in this area are still very limited and it would be rather big mistake if you don't take stand for a right solution and let market figure out as suggested in the book. Let me explain why!

Why should emerging market and especially poor people relearn what is already painfully leant by west. For example, fast food have created a massive healthcare challenge here in US. In fact, developing world has already fallen into this trap. Ask anyone in rural village, what happens when man receives excess cash. Go to any of these village and you will see rampant alcoholism, unstoppable tobacco consumption created by irresponsible Gutka marketing and women abuse as night settles. You will be wrong to say let market sort that out. Social entrepreneurs not only have a responsibility to build a sustainable solution but they should also think about how BOP culture will transform. For that matter, I believe that solution that focuses on income generation should be a top priority. For example agriculture education gap is even higher priority from agriculture market creation.

If you have read through this, I feel happy that I succeeded in demonstrating views and my time for this rather unusual long response was well spent. I look forward to having further discussion or assisting anyone who considers themselves in a same boat. Please feel free to contact me directly at [email protected]

Once again congratulations for a rather extraordinary book.
Our society is filled with solutions, however not all solutions are enjoyed universally. The most interesting part of the book is the idea of market/society co-creation. For long some of us think that the ToP are forgetting the BoP, it turns out, the ways in which they could interact together was not well established, yet.

This book provides some of it.

I hope you could learn more than i do from it.

Thought provoking about the huge market segment, we might not have any insight into. Very insightful.