Poverty Alleviation through Sustainable Strategic Business Models
Essays on Poverty Alleviation as a Business Strategy
About the Book
How can the private sector serve the unmet needs of the world’s poor while, at the same time, attracting new business opportunities and advancing the standard of living of those living in poverty? One approach to this, known as the bottom or base-of the-pyramid, is for the private sector to develop towards including the poor as both producers and consumers.
Those living in poverty present great business opportunities for the private sector. The size, unique characteristics, and underdeveloped economic activity of the poor can offer the private sector opportunities for growth, innovation, and profit. Consequently, the private sector can improve the standard of living of the poor by generating employment opportunities, creating access to products and services, and by creating access to markets. It is thus through the development of profitable, inclusive businesses that the private sector can make a potentially important contribution to poverty alleviation.
This creates a potential win-win situation; where doing good socially and environmentally within low-income communities, firms can do well financially. In fact, because of the private sector’s profit motive, profitable business initiatives stimulate new investments, replication, and innovation. They motivate the private sector to deploy its problem-solving capacity to make markets work more effectively and efficiently in favor of the poor as it is in their best interest to do so.
However, conditions in the low-income context differ from those in high-income markets. These include differences in cultures, institutions, cognitions, dependence on the informal economy, economic development, living conditions, and motivation. The characteristics of the poor and the challenging circumstances in which these firms operate necessitate business model innovation to enable firms to operate successfully in low-income markets. This includes disruptive innovation in distribution, price-performance ratios, value chain management, workflows, organization, payment schemes, customer education, and human resource management. Hence, success at the BoP requires simultaneous disruptive innovation of multiple aspects of the ways in which firms do business.
This book examines the conditions within low-income communities and the business challenges these conditions generate for firms. Subsequently, the consequences of these conditions for firms' strategies and business models are examined. In so doing, this book develops an understanding of the business models through which firms can include those living in poverty (as producers as well as consumers) in a profitable manner.
Among the key features covered in the book are:
Table of Contents
1 Introduction and outline
2 Discerning the organizational problems and opportunities at the
base-of-the-pyramid: A classification and an investigation of contextual
3 The business model concept: A strategic management approach
4 Can private businesses really build profitable and sustainable
business models at the base-of-the-pyramid?
5 A management support model for developing profitable pro-poor
business models at the base-of-the-pyramid: On how to analyze
base-of-the-pyramid case studies
About the Author
Martin H. Klein is Founder and CEO of Business For Development. He
wrote the book Poverty Alleviation through Sustainable Strategic
Business Models: Essays on Poverty Alleviation as a Business Strategy
as his doctoral thesis, for which he was awarded a PhD in Strategy from
Erasmus University Rotterdam. He conducted research and taught classes
both at the Rotterdam School of Management and the Erasmus School of
Economics. Martin was
an invited speaker at the UNCTAD / Empretec Directors' Meeting and
has spoken on the topic of inclusive businesses at major international
professional and academic conferences. He has consulted for large
corporate firms and small businesses.
About Business For Development
Business For Development is a business development company dedicated to improve the lives of the world's poor. Our focus is on founding and developing sustainable pro-poor for-profit businesses by replicating proven business models in partnership with NGOs, private sector, and non-traditional partners. To this end, we aspire:
- to be the premier expert on business development within the context
of the base-of-the-pyramid, and
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