A business model for an inclusive entrepreneurial development

Berardi, Martina, Tonelli, Marcello, & Serio, Luigi (2012) A business model for an inclusive entrepreneurial development. In International Seminar on Enhancing Grassroots Innovation Competitiveness for Poverty Alleviation (EGICPA 2012), Yogyakarta, Indonesia.

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Abstract

In 2004 Prahalad made managers aware of the great economic opportunity that the population at the BoP (Base of the Pyramid) represents for business in the form of new potential consumers. However, MNCs (Multi-National Corporations) generally continue to penetrate low income markets with the same strategies used at the top of the pyramid or choose not to invest at all in these regions because intimidated by having to re-envision their business models.

The introduction of not re-arranged business models and products into developing countries has done nothing more over the years than induce new needs and develop new dependencies. By conducting a critical review of the literature this paper investigates and compares innovative approaches to operate in developing markets, which depart from the usual Corporate Social Responsibility marketing rhetoric, and rather consider the potential consumer at the BoP as a ring of continuity in the value chain − a resource that can itself produce value.

Based on the concept of social embeddedness (London & Hart, 2004) and the principle that an open system contemplates different provisions (i.e. MNCs bring processes and technology, NGOs cultural mediating skills, governments laws and regulations, native people know-how and traditions), this paper concludes with a new business model reference that empowers all actors to contribute to value creation, while allowing MNCs to support local growth by turning what Prahalad called ‘inclusive capitalism’ into a more sustainable ‘inclusive entrepreneurial development’.

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ID Code: 54193
Item Type: Conference Paper
Refereed: Yes
Keywords: Base of the Pyramid, Selling to the Poor, Poverty Alleviation, Business Model, Inclusive Development
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BUSINESS AND MANAGEMENT (150300) > Entrepreneurship (150304)
Divisions: Current > Research Centres > Australian Centre for Entrepreneurship
Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Management
Copyright Owner: Copyright 2012 Please consult the author.
Deposited On: 17 Oct 2012 01:10
Last Modified: 28 Nov 2012 07:12

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