BoP and MNCs: where is the market and where the source of innovation?

Tonelli, Marcello & Cristoni, Nicolo Fabrizio (2013) BoP and MNCs: where is the market and where the source of innovation? In Savaneli, B., Nosike, A., Alcott, C., & Pacukaj, S. (Eds.) Proceedings of the 3rd International Conference on Human and Social Sciences, MCSER Publishing, Rome, Italy, pp. 184-193.

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Abstract

ln 2004 Prahalad made managers aware of the great economic opportunity that the population at the BoP (Base of the Pyramid) could represent for business in the tom of new potential consumers. However, MNCs (Multi-National Corporations) have continued to fail in penetrating low income markets, arguably because applied strategies are often the same adopted at the top of the pyramid. Even in those few cases where products get re-envisioned, theie introduction in contexts of extreme poverty only induces new needs and develops new dependencies. At best the rearrangement of business models by MNCs has meant the realization of CSR (Corporate Social Responsibly) schemes that have validity from a marketing perspective, but still lack the crucial element of social embeddedness (London & Hart, 2004). Today the challenge is lo reach the lowest population tier with reinvented business models based on principles of value co-creation. Starting from a view of the potential consumer at the BoP as a ring of continuity in the value chain process – a resource that can itself produce value - this paper concludes proposing an alternative innovative approach to operate in developing markets that overturns the roles of MNCs and the BoP. The proposed perspective of ‘reversed' source of innovation and primary target market builds on two fundamental tenets: traditional knowledge is rich and greatly unexploded, and markets at the lop of the pyramid are saturated with unnecessary products / practices that have lost contact with the natural environment.

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ID Code: 62861
Item Type: Conference Paper
Refereed: No
Keywords: Base of the Pyramid, Grassroots Innovation, Inclusive Development, Poverty Alleviation, Traditional Knowledge
ISBN: 9788834664612
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BUSINESS AND MANAGEMENT (150300) > Innovation and Technology Management (150307)
Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BUSINESS AND MANAGEMENT (150300) > International Business (150308)
Divisions: Current > Research Centres > Australian Centre for Entrepreneurship
Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Management
Copyright Owner: Copyright 2013 [Please consult the author]
Deposited On: 24 Sep 2013 23:36
Last Modified: 27 Jun 2015 09:12

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