1. Base of the Pyramid

2. Segmenting  Extreme poverty: below $1/day 1 billion people  Subsistence: $1-$3/day 1.6 billion people  Low income: $3-$5/day 1.4 billion people

3. Facts and Figures  Could swell to 6-8 billion over the next 25 years  Most live in rural villages or urban slums and shanty towns - movement towards urbanization  Markets are hard to reach, disorganized, and very local in nature  Education levels are low or non-existent (especially for women)

4. Base of the Pyramid  Victim/burden  Creative entrepreneurs  Value-conscious customers  These people can be the engine for the next round of global trade T. L. Ceranic

5. Base of Pyramid Proposition “Low-income markets present a prodigious opportunity for the world’s wealthiest companies – to seek their fortunes and bring prosperity to the aspiring poor.” C.K. Prahalad and Stuart L. Hart, The Fortune at the Bottom of the Pyramid, Strategy + Business, January 2002 T. L. Ceranic

9. Who serves the BoP?  Implicit assumption that the rich will be served by the corporate sector (MNCs) and governments/NGOs will protect the poor and the environment.  A huge opportunity lies in breaking this code

10. Even “poor” people “spend” In Dharavi, India 85% have a TV 50% have a pressure cooker 21% have a telephone … but can’t afford a house T. L. Ceranic

12. How to realize the business opportunity at the BOP  Requires radical innovations in technologies and business models  Reexamination of the "price-performance" relationships for products and services  New level of capital efficiency "bigger is better” small-scale operations and world scale capabilities

13. BoP Business Model  Key components that define a BoP business model: Provide unique products specific to the local community Localize value creation throughout the supply chain Enable access to goods and services Partner to better understand

14. There is a need to work with: MNCs SMEs NGOs Local governments T. L. Ceranic

15. Group Danone  Opportunity: Danone saw the opportunity to create a social business model to meet their mission statement: “Bring health through food to as many people as possible”  New Product: ‘Shokti Doi’, a nutritious yogurt product tailored to meet the specific nutritional needs of Bangladeshi children T. L. Ceranic

16. New Business Model  Manufacture the product in a micro plant 50x smaller than typical Danone plant  Design simple, easy to use equipment and train local workers  Use local suppliers and products wherever possible T. L. Ceranic

17. New Business Model  Build local community awareness and understanding through tailored nutrition programs  Pioneer techniques to save natural resources and produce environmentally friendly packaging  Distribute locally through shops and door to door salespeople

19. Compassion  Driver of social entrepreneurship  Elicits pro-social motivation -> flexible thought process -> greater commitment to action

20. What do you think people at the BoP need? T. L. Ceranic

21. Individual activity  Write a problem/challenge faced by people a the BoP on each sticky note: Environment Health Education Human rights T. L. Ceranic

22. Group activity  Look @ all of the problems/challenges faced by the people @ the BoP and choose ONE  Come up with a plan for how BUSINESS can solve this issue Not through charity but an actual $ generating venture T. L. Ceranic

23. Grameen Bank: The beginnings of Microfinance

24. T. L. Ceranic

25. Catholic Social Teaching Proposition The obligation to evaluate social and economic activity from the viewpoint of the poor and the powerless arises from the radical command to love one’s neighbor as one’s self. T. L. Ceranic

26. Direct BoP impact