written by Allison Durham

It is true that for the private-sector and multinational corporations (MNCs) to aid in alleviating impoverished countries, they must begin by leveraging the massive market potential at the Bottom of the Pyramid.  However, it is clear that the necessity for change in the managed practices of firms and MNCs is a slow transition. Best described by C.K. Prahalad in the section on “The Power of Dominant Logic,” historic ideals and governance have drawn a deeply ingrained line between what is considered profitable society and the Bottom of the Pyramid.  Those with minimum cash flow are given little regard in the marketplace and are instead left with minimal access to goods, services, and growth potential. For the business-sector to change their perception of where to invest time, resources, and knowledge, we must expose both the market opportunity as well as a general social responsibility owed to the 4 billion people living in poverty. 

The most common misconception currently held by private-sector firms and MNCs is that those that have little in terms of financial wealth pose little opportunity for sustainable profitability and business growth.  Yet as Prahalad demonstrates in the characteristics that define a BOP market, the impoverished are a connected market that is more amenable to advancement and technology given the means to do so. The BOP markets are an ideal target for businesses and MNCs because they embrace change, are attracted to commodities, and have a steady purchasing power in terms of consistently purchasing the items they crave and need whenever funds are at their disposal. Given these favorable terms, businesses and MNCs alike should be innovating ways to open the door to market development that is enabling rather than turning a blind eye.

Should businesses need one statement of proof to emphasize the importance of leveraging their wealth to aid the poor and to be aware of the negative impact of not acknowledging this opportunity, they should consider the connectedness of the BOP market.  In customer service, it is common knowledge that one unhappy customer will relay their dissatisfaction to at least three others, while the most content of customers is not likely to pass on their praise.  Applying that concept to the BOP markets, if they are as connected through information networks as Prahalad describes, ignoring them or worse, displacing them from the consumer space, poses a risk to the business-sector in terms of negative impact. Prahalad states that “word of mouth among BOP consumers is becoming a very potent force” (pg 15) and should not be ignored by business, but rather identified as an outlet for reaching previously unreachable markets and as a channel for sustainable growth.

While having to this point only discussed how the business-sector and MNCs can benefit from not ignoring the poor when identifying to opportunities for profitable and entrepreneurial growth, the humanitarian aspect should be equally considered.  It is the responsibility of business to create opportunity in the community in which they operate, and this should extend to empowering sustainable development among the underprivileged.  To ignore more than 50% of the global population is to dehumanize and discredit their value and contributable potential in the on the global economy.  No matter the size and scale, all people should be given the equal opportunity to make an impact in their community and the society they are a part of.  To be ignored by business and left impoverished strips importance and, as emphasized by Prahalad, “dignity” from those that have the potential to impact change in vast markets.  It is the responsibility of the business-sector to give BOP markets the tools and models to develop businesses that will aid to alleviating poverty.