| Abstract (ENG): |
The term “Bottom of the Pyramid” (or “Base of the Pyramid”, BOP), coined by the late C. K. Prahalad, refers to the large share of people living in extreme and moderate poverty. The BOP consists of approximately 4 billion people worldwide with a purchasing power of less than 1,500 US-$ per year and an aggregated income of 12.5 trillion US-$. These people have long been ignored by the private sector and their needs have widely remained untapped by private companies. The key idea of the BOP-concept is that poor people should not only be supported by the government and foreign aid, but that companies can make a fortune at the bottom of the pyramid and simultaneously help the poor on their way out of poverty.
The BOP-concept must be distinguished from similar concepts such as “third world countries”, “least developed countries“, and “low-income countries“ which do not only contain the population that lives in extreme and moderate poverty but also include richer parts of the population. Instead, the BOP-concept argues that the economic and social conditions may vary within a country and that different income segments have to be treated differently. The BOP-concept follows the logic that BOP-segments have common characteristics across different countries which differ significantly from traditional markets. Such characteristics are low individual purchasing power, limited market information, inefficient regulatory environments, inadequate physical infrastructure, missing knowledge and skills, and restricted access to financial products and services.
In order to cope with the constraining conditions of BOP-markets, companies cannot simply adapt strategies used in other markets, but must develop novel and innovative products, services, and business models. |
| Citation: |
Schuster, Tassilo and Holtbrügge, Dirk
(2015)
Chapter B - "Bottom of the Pyramid".
In:
Dictionary of Corporate Social Responsibility : CSR, Sustainability, Ethics and Governance / Idowu, Samuel O. et al. (Eds).
Cham: Springer.
(CSR, Sustainability, Ethics & Governance).
ISBN 9783319105369
|
