MGT 365 Week 5 Discussion - Post And Response 2
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MGT365Week5-2responses.docxMGT 365 Week 5 responses
Maria Delucas
In the article of Wikipedia, it states billion of people live on less than $2.50 per day. This is a low number that many should be frighten by. Prahalad proposes business, government and donor agencies to start seeing poor income communities as resilient and create entrepreneurs and value-demanding consumers. Businesses are not giving the opportunity to lower income communities since they don’t have the wealth. This only creates a wider separation in the pyramid with population and wealth. Prahalad believes poverty can be reduced if multi-nationals work with society organizations and local governments to create new innovative local business models.
I believe big international businesses can create a social good by targeting the world’s poor. In Erik Simians article he focuses on how the poor can become business partners and innovators. There has been a misconception with low income markets are good because “low price, low margin, high volume model. In the article it talks about a way companies can operate in poor regions to be success while helping develop poorer countries is companies need to generate a high contribution from every transaction. By doing this they are covering high cost of operating in lower-income markets. The article goes in depth of businesses selling bundles to save time and money in putting an essential product out there. In poor regions people willing be willing to pay for a care kit that has different products than one product alone. I believe it depends on what the business sells as products and services. There are certain business models that won’t work in poorer communities if they sell high end or non-essential products.
In the article “The new fortune at the bottom of the pyramid” it claims technology has help create new opportunities’ in the poor regions. Most regions now have telephones and power lines that run through. Through technology it can create a desire in changes in education, roads, and businesses. An example given in the article was when China Xiaomi, sold 100,000 phones in less than 10 seconds to India’s e-commerce platform and is now the world’s fifth-largest cell phone maker, while having no sales in the U.S. to date. This was a company who saw an opportunity and followed through. Through technology companies now have data on what certain regions prefer in services or products which before they were blindfolded. Overall, I believe there’s opportunity to create a social good by targeting the world’s poor by doing business.
Prahalad, D. (2019, January 2). The new fortune at the bottom of the pyramid. Strategy+business. https://www.strategy-business.com/article/The-New-Fortune-at-the-Bottom-of-the-Pyramid?gko=c5f11
Simanis, E. (2015, May 19). Reality Check at the Bottom of the Pyramid. Harvard Business Review. https://hbr.org/2012/06/reality-check-at-the-bottom-of-the-pyramid
Wikipedia contributors. (2020, September 14). Bottom of the pyramid. Wikipedia. https://en.wikipedia.org/wiki/Bottom_of_the_pyramid
Jeffrey Mandeville
Major reduction in extreme poverty over the past 20 years has created opportunities for business to have access to bottom of the pyramid consumers. Also with the widespread use of smart phones over the last few years this enables companies to create services on phones. Though the bottom of the pyramid is classified around $2.50 a day, business can still enter that market without the need of major risk taking. If a business partially focuses on high-price, low-volume, they essentially need to flip that at the BoP. Low-price, low-margin, and high volume is what a business needs to focus on in order to enter this market. With 2.7 billion people living on less than $2.50 a day, low-prices is the only option in the BoP.
Access to technology has made it easier for the average company to grow their business. For example, the Chinese tech company Xiaomi sold more than 100,000 phones in India and is now the 5th largest cell phone maker despite having few sales in the West and no sales in the United States. In this day in age, everyone will soon own a cell phone. Then companies can make applications people can use on their phones to grow their business and have better outreach in new markets.
https://hbr.org/2012/06/reality-check-at-the-bottom-of-the-pyramid
https://www.strategy-business.com/article/The-New-Fortune-at-the-Bottom-of-the-Pyramid?gko=c5f11
Alex Kean
BOPs
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I do believe that companies, not matter how big or small, can make a positive impact on the planet. However, the skeptic in me says that most companies have hidden agendas when doing philanthropic endeavors. This discussion board asks specifically about companies ability to help the poor by targeting the poorest parts of the world with the intentions of making those areas better through new resources and monetary incentives/kickbacks. Personally, companies targeting the poorest regions in the world sounds like a cover for labor exploitation. Going into a region with little opportunity for self-improvement and offering them a "golden ticket of opportunity", so to speak, seems suspicious. While I am sure that not all companies operate with hidden agendas, I am under the impression that many do. Yes, I do believe that big international business can create social good by targeting the worlds poor, I am doubtful that many companies would be able to improve people's situations truly and honestly. The "bottom of the pyramid" theory is nice, but to me it is simply just a theory. Without being willing to take a loss or to only break even, I do not believe that any for-profit corporation would be able to help poor regions by targeting them specifically. While their intentions may be good, I am unsure of their ability to execute such a task while maintaining their original intent.
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Nikola Sedik
BOP
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When analyzing the ideas to help the those "at the bottom of the pyramid," I found it to be very beneficial to both the consumers and the workers that belong in that category. According to Wiki, the bottom of the pyramid is "...the largest, but poorest socioeconomic group. In global terms, this is the 2.7 billion people who live on less than $2.50 a day." Refering to "Reality Check at the Bottom of the Pyramid," many companies are working to provide this group with low cost products at lower margins can help not only the consumer afford what they need/want, but can also generate a nice sized profit due to their large supply of merchandise that they are selling. There are so many companies these days that sell mainly to the middle to upper class demographic because their intent is to sell to those who can afford luxury items. However, this idea for companies to incorporate those in the bottom of the period allow the gap between developed and bottom of the pyramid nations to slowly narrow. The article "The New Fortune" states that creating this opportunity for the bottom of the pyramid group because they can improve the life of the poor along with their bottom line.
Resources:
https://en.wikipedia.org/wiki/Bottom_of_the_pyramid
https://hbr.org/2012/06/reality-check-at-the-bottom-of-the-pyramid
https://www.strategy-business.com/article/The-New-Fortune-at-the-Bottom-of-the-Pyramid?gko=c5f11
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