What is the base of the pyramid (BOP), and why is this strategy challenging to implement?
What will be an ideal response?
A group of researchers and companies have begun exploring the potentially untapped markets at the base of the pyramid (BOP). They have found that incremental adaptation of existing technologies and products is not effective at the BOP and that the BOP forces multinational corporations to fundamentally rethink their strategies. Companies must consider smaller-scale strategies and build relationships with local governments, small entrepreneurs, and nonprofits rather than depend on established partners such as central governments and large local companies. The BOP strategy is challenging to implement. Companies have to offer affordable goods that are highly available in a community that is willing to accept the product. Most importantly, however is that the company must bring awareness of the product to the general population. Balancing these is not a simple task, since advertising and efficient distribution networks, for example, cost a significant amount, yet the companies cannot add a high price tag. Furthermore, illiteracy issues, poor infrastructure, corruption, and nonexistent distribution channels often associated with poverty-stricken societies deter companies from wanting to invest.
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