Wednesday, January 23, 2008

Profitable Business Models and Market Creation in Deep Poverty

Christina Seelos and Johanna Mair of the IESE Business School – University of Navarra have published an IESE occasional Paper, "Profitable Business Models and Market Creation in the Context of Deep Poverty: A Strategic View"

This paper moves the discussion beyond the "why" BoP to focusing on "How to do it" from the perspective of corporate and competitive strategy. The paper aims at providing insights into how business models can be structured to generate profits to justify investments, while integrating and serving the needs of the poorest citizens.

According to the authors, corporates looking beyond their existing markets, keen to gain a foothold into underdeveloped markets would do well to work in tandem with local entrepreneurial organizations to achieve multiple strategic objectives. The paper uses 3 cases of successful partnerships (2 from Bangladesh, 1 from India) to show how local entrepreneurs provide important resources and capabilities, both of which take time to create.

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