Premium Essay

Botton of the Pyramid

In: Business and Management

Submitted By Incredibleme
Words 8424
Pages 34

The Fortune at the Bottom of the Pyramid by C.K. Prahalad and Stuart L. Hart

from strategy+business issue 26, first quarter 2002

© 2002 Booz Allen Hamilton Inc. All rights reserved.


The Fortune at the of the

Bottom Pyramid by C.K. Prahalad and Stuart L. Hart


content strategy & competition

Low-income markets present a prodigious opportunity for the world’s wealthiest companies — to seek their fortunes and bring prosperity to the aspiring poor.


With the end of the Cold War, the former Soviet

Union and its allies, as well as China, India, and Latin America, opened their closed markets to foreign investment in a cascading fashion. Although this significant economic and social transformation has offered vast new growth opportunities for multinational corporations (MNCs), its promise has yet to be realized. First, the prospect of millions of “middle-class” consumers in developing countries, clamoring for products from MNCs, was wildly oversold. To make matters worse, the Asian and Latin American financial crises have greatly diminished the attractiveness of emerging markets. As a consequence, many MNCs worldwide slowed investments and began to rethink risk–reward structures for these markets. This retreat could become even more pronounced in the wake of the terrorist

attacks in the United States last September. The lackluster nature of most MNCs’ emergingmarket strategies over the past decade does not change the magnitude of the opportunity, which is in reality much larger than previously thought. The real source of market promise is not the wealthy few in the developing world, or even the emerging middle-income consumers: It is the billions of aspiring poor who are joining the market economy for the first time. This is a time for MNCs to look at globalization strategies through…...

Similar Documents

Premium Essay

Bottom of the Pyramid

...Schumpeter The bottom of the pyramid Businesses are learning to serve the growing number of hard-up Americans Jun 23rd 2011 | from the print edition MANAGEMENT gurus have rhapsodised about “the fortune at the bottom of the pyramid” in emerging markets ever since C.K. Prahalad popularised the idea in 2006. They have filled books with stories of cut-price Indian hospitals and Chinese firms that make $100 computers. But when it comes to the bottom of the pyramid in the rich world, the gurus lose interest. This is understandable. McDonald's and Walmart do not have the same exotic ring as Aravind Eye Care and Tata Motors. The West's bottom-of-the-pyramid companies are an unglamorous bunch. Many rely on poorly educated shift workers. Some inhabit the nether world of loan sharks and bail bondsmen. But even in one of the world's richest countries the hard-up represent a huge and growing market. The average American household saw its real income decline between 2005 and 2009. Millions of middle-class Americans have been forced to “downshift”, as credit dries up and the costs of college and health care soar. Some 44m Americans live below the official poverty line ($21,954 a year for a family of four). Consumer spending per household fell by 2.8% in 2009, the first time it had fallen since the Bureau of Labour Statistics started gathering data in 1984. This is a challenge to the American dream. But it is also an opportunity for clever companies. Even the poorest Americans are rich......

Words: 1050 - Pages: 5

Premium Essay

Bottom of the Pyramid

...Marketing to the Bottom of the Pyramid Until recently, the least important market segment has been the most poor, lower-income individuals and families. According to Professor C.K. Prahalad, the “bottom of the pyramid”, also referred to as the BOP, is made up of nearly 4 billion people who survive on $2 a day or less. Making up approximately a quarter of the world’s population, these four billion people hold $14 trillion in purchasing power and this group is growing each year. In the past, this market segment couldn’t afford to purchase most products and were definitely not looking at the latest and greatest technologies. However, with some markets becoming more and more competitive, potential for making more profit from bottom of the pyramid consumers began to grow. Today, more and more stores such as Wal-Mart specifically cater to low-income families, just as Sears Roebuck had. Companies such a Singer offering payment plans for consumers who purchased their sewing machine led the way in marketing to this group. It seems that as time goes on, the BOP seems to have access to more and more higher end products that they once couldn’t afford. While the process of marketing to the BOP has proven to turn a profit, marketers need to keep in mind the challenges that they face in regards to offering advanced technology, financing, distribution, and packaging. One challenge that many companies faced was being able to create technologically advanced products that could be made......

Words: 970 - Pages: 4

Free Essay

The Great Pyramid

...2012 PYRAMID I. Introduction: Nowadays, when we look at the huge and modern builiding around us, we often admire to know the way architects created them. Each building has their own features and very diversified in their shapes. Looking at how beautiful they are, we can image that the constructions need a lot of efforts from the architects and workers, and they may use many advanced and modern facilities to bring them the best work. Besides, if we think about the past, without technology, there would be impossible for the ancient people build anything amazing like these. But that is not true, and you will be surprised when you see how mighty the pyramids are. Especially, the Great Pyramid of Giza is the only one of the seven ancient wonders still remaining to our days and one of the most famous tourist attractions in the modern world. II. Body: 1) What is pyramid? + Pyramid is a structure whose shape is triangular and converges to a single point at the top. The base of a pyramid can be trilateral, quadrilateral, or any polygon shape, and the square pyramid is a common version. + Most of Pyramids represent for the tomb of Pharoahs, kings of acient Egypt, who believed that they could take their bodies and worldly possessions to the next world by burying inside the pyramid. Usually, they started construction on their pyramid many years before their death. 2) How to build a pyramid? + The estimate of the number of workers to build the pyramids......

Words: 558 - Pages: 3

Premium Essay


...(exercised) or alive (not yet exercised) and then using the higher of these two values. 3a. At the time of grant, the options are out of the money, therefore in order to profit from owning the options, managers would need the stock price to rise above strike price. If the stock price does not rise, their options become worthless and they lose the value of the grant. However, with RSUs, managers are not penalised if the stock price does not change. Also, we note that, due to the convexity of their payoffs (as opposed to the linear payoff of the RSUs), ESOs have a much higher upside potential. Therefore, at the time of the grant, ESOs provide managers with more incentives to raise the stock price than do RSUs. 3b. In the event that the Pyramid share price drops 50%, ESOs become almost worthless whereas RSUs will retain 50% of their value because they represent direct ownership in the company’s stock. In addition, holders of RSUs can benefit immediately from a recovery in the share price. However, holders of ESOs, can only benefit from their currently deep out-of-the-money options, if the price rises substantially. So in this case, the incentives of owning options are greatly reduced compared to holding RSUs. 3c. The incentive effect is directly linked to the extent to which employees will profit from a rise in the stock price. This can be quantified by the delta of the ESOs and the RSUs (100% for RSUs). As we can see from the graph below, the slope of the dotted......

Words: 591 - Pages: 3

Premium Essay

The Pyramids

...The Pyramids at Giza Construction Julian Grant Humanities 111 Professor Emerick April 29, 2014 This is another unbelievable story, as there are many mysteries as it certainly is fascinating. The two particular theories as the “transport theory” which is presented by engineer and inventor, Andrzej Bochnacki, a Polish engineer as his book proposes very inventive technology for moving the pyramid blocks from the pits to the construction place. He presents the method from which the stones moved to making the entire pyramid. He said that they must have made the paper boats which were placed on the top of the blocks and knotted up with ropes (Bochnacki, 1994). These movable boats were in wait to raise the water of Nile and so they can be easily dragged to a chosen destination. The easiest way was to drag them to the west region of Nile where water flooded the fields. The second theory is the Limestone concrete theory by Materials scientist, Joseph Davidovits, that holds the spotlight of many historians and scientists, he is an International renown French Scientist, born in 1935, working in France, Europe, USA, Australia and China. Most Egyptologists reject the idea, put forth in the mid-1980s by French chemist Joseph Davidovits, that the pyramids contain concrete. Barsoum’s team took a fresh look at 15 samples using scanning- and transmission-electron microscopes. The samples contain......

Words: 480 - Pages: 2

Premium Essay

Pyramid Guide

...EGYPT BEYOND THE PYRAMIDS PAGE 1 THE HISTORY CHANNEL CLASSROOM PRESENTS EGYPT TEACHER’S GUIDE Egypt Beyond The Pyramids The mystifying world of ancient Egypt comes to life in this four-part miniseries, Egypt Beyond the Pyramids. Within the walls of recently excavated temples and tombs lie secrets that will challenge current ideas about ancient Egypt. Discoveries—from the enormous burial tomb called KV5 to the sacred temples of Karnak—show how ancient Egyptians lived, worked, worshipped, and honored their dead. To provide a deeper understanding of Egypt’s past, head archaeologist Dr. Kent Weeks, along with other Egyptologists, leads viewers into ancient temples and tombs—including the resting place of Pharaoh Ramesses II’s lost children—some recorded on film for the first time. Epic in scope, Egypt Beyond the Pyramids demonstrates that as archaeologists uncover more about the past, their discoveries yield more questions than answers. Curriculum Links Egypt Beyond the Pyramids is appropriate for middle and high school classes in world history, ancient history, and art history. National History Standards Egypt Beyond the Pyramids fulfills the following National Standards for History: Historical Thinking 1 (Chronological Thinking), 2 (Historical Comprehension), 3 (Historical Analysis and Interpretation), 4 (Historical Research Capabilities), World History, Era 2. EGYPT BEYOND THE PYRAMIDS THE HISTORY CHANNEL CLASSROOM PRESENTS EGYPT HOUR 1: MANSIONS OF THE......

Words: 4214 - Pages: 17

Premium Essay


...The pyramids of Ancient Egypt are as entrancing and interesting, as they are amazing. Egyptologists and students of history have since a long time ago discussed the inquiry of who fabricated the pyramids, and for what reason. There are numerous distinctive and frequently clashing hypotheses concerning the development of the Great Pyramid of Giza. At the point when turning back the pages of history, it is found that various hypotheses have been produced to clarify the vicinity of such a huge chronicled milestone. "Hypotheses change from a tomb for a ruler, to an exceptional substance production line, a signal for extraterrestrial aircraft's, a stone manifestation of the Bible, a conceivable approach to contact a Higher Being and a stone publication of the second happening to Christ..." (Schillings, M. Such cases of changing disputable hypotheses have started various theories to the riddle of the Great Pyramid of Giza. Manufactured amid a period when Egypt was one of the wealthiest and most effective developments on the planet, the pyramids—especially the Great Pyramids of Giza—are the absolute most grand man-made structures ever. Their huge scale reflects the exceptional part that the pharaoh, or ruler, played in aged Egyptian culture. Despite the fact that pyramids were constructed from the earliest starting point of the Old Kingdom to the end of the Ptolemaic period in the fourth century A.D., the top of pyramid building started with the late third administration and......

Words: 657 - Pages: 3

Premium Essay

Populations Pyramid

...19 February 2014 “Population Pyramids Assignment” 1) Brazil Brazil’s population is growing slowly since the lower end of the pyramid is wider than the top, but the lowest portion of the pyramid is not as wide as the middle. This means that birth rates are higher than death rates, but does not mean that the Total Fertility Rate (TFR) is high. It seems as though Brazil had its highest rate of growth between 1980 and 2004. 2) Swaziland Swaziland’s population is growing rapidly since the lower end of the pyramid is much wider than the top. Every age group that decreases in age accounts for a higher percentage of the population. This means that the birth rate is much higher than the death rate, and also that the TFR is high. 3) Estonia Estonia’s population is decreasing slowly. This is because the population pyramid is mostly top-heavy, and the proportion of the population that is in the top half is not significantly greater than the proportion of the population that is in the bottom half. It also seems as though there are more women in Estonia than males that live longer. There is also an echo boom in this pyramid for people between the ages of 50 and 64 and their children between the ages of 25 and 34. 4) Vietnam Vietnam’s population is increasing slowly because their population pyramid has a narrowing base. This means that birth rates are falling and momentum for future population growth is not nearly as high as it was. It also seems that men and women are likely to......

Words: 512 - Pages: 3

Free Essay

Alain de Botton

...success by Alain de Botton The Text ‘a kinder, gentler philosophy of success, is a Speech, spoken by Alain de Botton. In this Text Mr. Botton proves his case by phrase some arguments. He starts the text with a contention by saying, that career crises aren’t a personal problem.” I think that we live in an age when our lives are regularly punctuated by career crises” Botton proclaims. The things we thought that we knew about ourselves suddenly in an imaginable was become a sort of reality to us. By reflecting over some thoughts he can conclude that we are surrounded by snobs. This is maybe why we have this so-called career crises and career anxiety. The “snob phenomenon” doesn’t depend on where on the country you come from, but it is more like a global disease so to say. Here Mr. Botton again come with a sort of conclusion” A snob is anybody who takes a small part of you and uses that to come to a complete vision of who you are. That is snobbery”. This snobbery often appears on jobs these days. It is so important to have the right job, to earn a nice sum of money and telling about it if anybody asks so you don’t get the cold shoulder. The opposite of a snob is someone who doesn’t care about your achievements. This could be your partner or your mother - someone who respects you without putting you in the social hierarchy. The time we live in is filled with people who love material goods. But this is not the reason why we care so much about our careers. Mr. Botton thinks......

Words: 1000 - Pages: 4

Free Essay

Ziggurats and Pyramids

...WEEK 8 Discuss the similarities and differences between the Mesopotamian ziggurat and the Egyptian pyramid both in style and function. Man has a tendency to build large monumental things, not only today, but also during our ancient past. The Sumerians and the Egyptians are two cultures, from our past, that have accomplished these feats. The Sumerian ziggurats and Egyptian pyramids have some similarities and differences. The ziggurats and the pyramids have some similarities. They are both examples of the massive structures that were built in support of their cultural or religious beliefs. They were both built with a great deal of manpower with no use of any big machinery that we are familiar with today. Their society's leaders commissioned in building these massive structures were: the king of the Sumerian civilization for the ziggurats and the pharaoh of the Egyptian civilization for the pyramids. Their similarities pretty much ends here. At a closer look, the ziggurats and the pyramid had many differences. The pharaohs, in preparation for his death, built the pyramids as place for his tomb and his priced possessions and servers (to ensure that his needs are met in the afterlife) and also for his queen. It is said that the pharaoh ruled in the authority of the God and that the pyramid would help him ascend to the Gods. The Sumerian king had the ziggurats built for use as a place for worship, like a temple, for the Sumerian society. One story also suggest......

Words: 531 - Pages: 3

Premium Essay

Egyptian Pyramids

...Many researchers have done their work to find out who built the Egyptian Pyramids, and how they were built. Did the slaves build the pyramids? Here, we are going to find out. “ The pyramids are remarkable not only for the great technical skill they demonstrate, but also for the concentration of resources they represent” (Craig 11). The pyramids were not all built and designed by the same people. The pyramids were built under the name of pharaoh, meaning the term “great house.” Djoser, a third dynasty king, was the first to build a monumental six-step pyramid of hard stone. Khufu was the son of Djoser was the leader in building the largest pyramid ever constructed, plateau of Giza. It is 481 feet high, 765 feet long on each side, and with the base covering 13.1 acrs. The pyramid is made of 2.3 million stone blocks averaging 2.5 tons each. Khufu, Khafre, and Menkaure built the exact same three pyramids at Giza. Beyond that there are over 120 pyramids throughout Egypt. The workers who built the pyramids were Egyptians, not slaves, as many people do believe. Farmers lived in villages made for workers of the pyramids. They built the Pyramids while the nile was flooding. There are three burial chambers in or under the Great Pyramid. The first chamber was built under the Great Pyramid and it was no finish. This was then followed by the Queen's and Kings chambers. These pyramids were built to serve as tombs for kings and queens. After a ruler had passed away, his or her body......

Words: 459 - Pages: 2

Free Essay

Trophic Pyramid

...tree provides sustenance for many species in a tropical rainforest; tapirs, monkeys, ants and other insects, small mammals and birds all rely on the banana tree as part of their diet. As the apex predator in my trophic pyramid I selected the jaguar. The jaguar being an apex predator, as it diets on other animals but was virtually no predators of its own (, 2008), exists in a unique position. The jaguar limits the populations of other inhabitants, predators included, thusly maintaining a balance in the tropical rainforest. As the jaguar preys on many species, including predators such as the black caiman and anaconda, neither species’ population is allowed to grow beyond control thus protecting the lower level consumers that black caiman and anaconda prey upon. The amount of energy gained is much greater than the amount of energy lost through the 2nd-4th trophic levels. Energy that is consumed at any tropic level is used through many life processes such as moving, breathing, reproducing and searching for food. A significant portion of the energy is lost before being absorbed into the next level. Scientists estimate that 90% of the energy that enters each level is “lost” (Annenberg Foundation, 2014) If one species was removed from my trophic pyramid many species would be affected. For example, if the anaconda were removed any species that it preys on, such as tapirs, would experience a surge in their population. Whereas any food eaten by tapirs would see a negative......

Words: 496 - Pages: 2

Premium Essay

Pyramids and Ziggurats

...Pyramids and ziggurats both provide archeologists with a great deal of information about the ancient cultures that constructed them. When comparing The Great Pyramids of Egypt with The Ziggurats of Mesopotamia, the differences between them are more apparent than the similarities that they share. The two structures actually only appear to be similar. Both have the general form of a pyramid. Some other similarities shared by these two types of structures can be interpreted from the context of the religions of those who had them erected and what role they served for the society. Among the differences are their intended usage, how they were decorated, their designs, and the materials used in their construction. In order to clearly describe how different these two structures are, I have summarized some information about their designs and the materials used to build them. Contrasts in the decorations of the two types of structures are then discussed. The intended uses of these structures then introduces some similarities in relation to the religious symbolism of the structures. Considered to be among the greatest wonders of the known world, The Pyramids of Egypt were built with exacting precision from granite blocks. The pyramids of the early dynasties were of a more stepped pyramid form, similar in appearance to the ziggurats of Mesopotamia. Advancements in available technologies and construction techniques in the later dynasties of ancient Egypt allowed for pyramids to be......

Words: 308 - Pages: 2

Free Essay

Bottom of the Pyramid

...CANSU DALKILIC MGMT 311 RESPONSE PAPER 2 32936 There is an ongoing debate on if it is possible to integrate dominant economies with the bottom of the pyramid which are the 4 billion people who have less than 2$ per day. It occurs questions like if it is possible for companies to compete by serving people who counted as bottom pyramid? Is it possible for those poor people to survive by being consumers of MNCs? Prahalad believes that it is a win win for both MNCs and tier 4 (bottom of the pyramid). In other words, he believes that it is possible to sell high quality products to mass number of poor people. Both Prahalad and Karnani want to find solution to alleviate poverty, but they have different approaches to this issue. Prahalad states that we should consider poors as consumers. In contrast to Prahalad, Karnani thinks that rather than viewing the poor primarily as consumers, an alternative approach is to focus on the poor as producers and to emphasize buying from the poor. The only way to alleviate poverty is to raise real income of the poor. Karnani quotes the example of Nirma, a demonstrably inferior product to some of the alternative detergents on the market, such as Surf. It was hard on the skin, and could sometimes cause blisters. And yet it retailed at a third of the price of its competitors, and achieved majority market share from consumers for whom the trade off between price and quality was one that they were happy to make. He concludes: "Insisting on not......

Words: 1147 - Pages: 5

Premium Essay

Pyramid Scheme

...Pyramid schemes in albania essay 1- Introduction At the beginning of the year's 1990th, with the falling of the communism, many Albanians people went through the foreign embassy to left Albania and go abroad for a better life. They started to create a real income. In this time we have some mountebanks in the market which created the pyramid schemes and offered high interest rate. People invested in this scheme their savings. According to the data of the different official institutions, the number of the Albanian which invested in schemes is increased time after time. Deposits of these schemes take e big part of the GDP. This means that they have had an important role in our economy. Through this paper we want to give a general overview of phenomena of pyramid schemes and collapse that they afflicted. We will analyze the rise and favorite factors that encased prosperity of these companies for a long time and the way how they operated. Another point in our paper shows the impact and bankrupt causes that brought the fail of pyramid schemes. The last point shows the role of the institution that answered for minimization of crises effect. In our paper all the results will be accompanied with dates from different years. In the first chapter we will handle phenomena of schemes by focusing in three important cases a) we will give a short description for origin of schemes and the biggest schemes, b) in another case we are going to analyze the factor that took born of pyramid. c)......

Words: 3404 - Pages: 14

Manuscripts | Noblesse 451 | DOWNLOAD