Business at the Base of the Pyramid Essay Example | Topics and Well Written Essays - 1750 words

Business at the Base of the Pyramid - Essay Example 4). Survival for companies, at the base of the pyramid, directly hinges on the level of innovation that is put into the products (Prahaland 2002, p. 5). Achieving new levels of capital efficiency is a pre-requisite to profitable operation at the base of the pyramid (The European Alliance 2008, p. 11). The emphasis of business structure remodeling should be to produce innovative product using innovative means. This in turn necessitates the need to adopt innovative manufacturing processes. The guiding principle that should be adopted is the production of commodities that aid the community in meeting its development objectives (The European Alliance 2008, p. 10). The simple fact is that positioning a product to enhance the lives of the poor has a variety of advantages, chief of which is the financial advantages that will accrues from this approach (London 2007, P.9). The approach that should be adopted by the firms, which focus on the bottom of the pyramid, should entail employing an in novative manufacturing process, which will reduce the overall cost of production. This is in line with the fact that operating at the bottom of the pyramid entails lowering of prices and repackaging products into financially friendly units. This is best exemplified by the approach adopted by HLL India (Prahaland 2002, p. 6). The firm launched a new product called Wheel which essentially reduced the ration of oil to water in their detergent. When this was coupled with the low cost pricing strategy that they had set up, the result was a booming product which appealed to the poor consumer. This then ushers in the point of distribution. In order to target, effectively, the bottom of the pyramid, there must be systems that have been put in place, to ensure that the distribution mechanisms are able to access, effectively, the poor people (Prahaland 2002, p. 5). The lack of equitable wealth distribution restricts the poor to the sidelines of the global economy. This is regardless of the ve rity that they comprise a significant portion of the population. The status and nature of the poor makes it extremely difficult to reach via the conventional models that have reigned supreme using traditional business models (International Finance Corporation 2007, p. 3). The appropriate structure should be to position sales points to the small outlets, which are frequently used by the poor. These small outlets are characteristics of the dwellings of the poor. As such, should constitute as sales points for the business models of the bottom of the pyramid. Efficient distribution systems have greater potential of providing to large and untapped market. The largest being sourced from the rural poor. As such, with models that encompass structuring distribution points in the rural areas are better placed to tap these large and exponentially growing markets (Schrader, Freimann and Seuring 2012, p. 289). This is best done by structuring the business model to bring the product closer to the customer (The European Alliance 2008, p. 13). This in turn ushers in the need to check on the infrastructure. As such, this necessitates the need to incorporate NGOs and the government into a mutually benefitting partnership (The European Alliance 2008, p. 10). Aside from this, another vital aspect, to take into consideration is