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Summary of the famous book Fortune at the Bottom of the Pyramid by C. K. Prahlad.
Bottom of the Pyramid (BOP): Bottom of the pyramid refers to the world poorest four billion people whose purchasing power parity in terms of USD is $1500 or less.
The Fortune at the Bottom of the Pyramid proposes the idea of involving large companies from the private sector with people belonging to the BOP in a way that:
1. Empowers the poor by giving them choice, self-esteem and entrepreneurial opportunities and helps alleviate poverty.
2. Provides growth and profitability opportunities for the companies by serving the huge, but latent BOP market.
Historically, the dominant logic for all groups working on poverty alleviation, like national governments, charitable organizations, rich countries providing aids, the World Bank and the private sector itself, has been that market based solutions do not work for solving the problem of poverty. In fact, most of them have looked at the private sector, especially MNCs and large domestic organizations, with suspicion and considered them greedy. MNCs themselves have a logic that doesn't support the idea of looking at the BOP market seriously. The assumptions that form the base of their logic are:
• Poor cannot afford and do not have use for the products MNCs sell
• They do not appreciate and will not pay for technological innovations
• The poor are not critical for the long-term growth of the company
• There isn't enough intellectual excitement in the BOP market to recruit or retain motivated managers.
However, all the groups have started rethinking their dominant logic and realize that it's important to break this self-imposed intellectual trap.
The summary is concise, but covers all the relevant learning from the book.