Business Models for Bottom of Pyramid (BOP)
One of the areas of business model innovation that has got significant focus over the past decade was on the ways in which private corporations developed or adapted to serving customers from the bottom of the pyramid or consumers with low purchasing power especially from the developing world. Broadly, enterprises in this space of business model innovation can be categorized into two: the new enterprises started with focus on bottom of pyramid consumers called as social entrepreneurs and the main stream corporations which has developed unique business models or divisions different to its main stream model targeting bottom of pyramid consumers. The key driving factors for this type of business model are the huge mass of population – close to 4 billion, huge hue and cry about the social implications of such a large below the poverty line (BOP) population in all forms of media and the strong public relations image associated with any sort of activity that helps the BOP section of society.
Apart from the above mentioned three factors, the key idea or belief that develops a sustainable business model to serve BOP is the thought that “If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up” . In order to fully utilize this new world of opportunity, the company or the individual aiming to enter this space of market needs to focus on price performance of the product. The products developed for BOP should not just be of lower cost, but of improved performance too. The business model should also utilize latest technologies along with existing infrastructure to develop innovative solutions that can be scaled and replicated across geographies or regions. Arvind eye care hospital in India utilized the latest technology in lens manufacture and eye care within the local infrastructure to...