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The Fortune at the Bottom of the pyramid
by C.K. Prahalad
Wharton School Publishing © 2005, 401 pages, $28.95 (ISBN 0-13-146750-6).
Eradicating Poverty Through Profits
Business leaders and anti-poverty activists cannot ignore the markets of those with the least, writes business author, professor and consultant C.K. Prahalad. He calls these “Bottom of the Pyramid” (BOP) markets, and throughout The Fortune at the Bottom of the Pyramid, he describes the spending patterns, distribution channels and marketing efforts that have been successful in reaching those in the developing world. With myriad case studies and examples of companies that have been successful in making a profit while helping to contribute to the eradication of worldwide poverty, Prahalad shows business leaders how their firms can make enduring contributions, deliver dignity, empower poor people with new choices, as well as make a profit with the billions of aspiring poor who are making their initial entrance to the market economy.
Prahalad explains that he wrote The Fortune at the Bottom of the Pyramid to tackle the question of why we cannot create inclusive capitalism, and why all of our technology, managerial know-how and investment capacity cannot make even a minor contribution to the problem of pervasive global poverty and disenfranchisement. Refining developmental aid, subsidies, governmental support, reliance on deregulation and privatization of public assets, and the solutions of localized nongovernmental organizations (NGOs) is important, Prahalad writes, but it has not redressed the problem of poverty.
There are 4 billion people in the world who live on less than $2 a day. To help this 80 percent of humanity, Prahalad asked, “Why can’t we mobilize the investment capacity of large firms with the knowledge and commitment of NGOs and the communities that need help?” His search for unique solutions led him on a journey to understand and motivate large firms to imagine and act on their role in creating a more just and humane society by collaborating effectively with other institutions.
The Fortune at the Bottom of the Pyramid does not engage in debates over whether globalization is good or bad, or whether small or large corporations can tackle problems more efficiently. Instead, it concerns itself with what works, and points readers toward ways that NGOs, large domestic firms, multinational corporations, governments and even the poor themselves can come together through entrepreneurial activities and work to solve the problem of poverty. Prahalad writes that the challenge is to find new and creative approaches to convert poverty into an opportunity for all concerned. He explains that this process starts when BOP consumers are respected as individuals, and when the process of co-creation assumes that consumers are equally important joint problem-solvers.
Bridging the Gap
To show how companies such as Unilever, Hewlett-Packard, DuPont and others have embraced this new perspective on alleviating global poverty, The Fortune at the Bottom of the Pyramid presents extensive case studies describing known problems and unique solutions that have been developed by companies who look at social responsibility as a business opportunity and a sign of commercial respect for those in need. For example, in one case study, Prahalad describes how Hindustan Lever Ltd.’s technological innovation, Annapurna salt with stable iodine, demonstrates ways nonprofits and a for-profit corporation can bridge the gap between a preventable disease (iodine deficiency disorder) and a healthier population, as well as the gap between the poor as a problem and the poor as a source of innovation and profits. ~
Why We Like ThIS Book
By working to jump-start a global movement toward private-sector solutions for global poverty, Prahalad has written an important guidebook for organizations to follow when formulating their strategies for a better future, where profiting from the elimination of poverty can take place on a global scale and the ways the developed world delivers offerings to the developing world can be improved. ~