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The Fortune at the Bottom of the Pyramid
Book

The Fortune at the Bottom of the Pyramid

Eradicating Poverty Through Profits

Wharton School Publishing, 2004 plus...


Editorial Rating

9

Qualities

  • Innovative
  • Applicable

Recommendation

C.K. Prahalad’s excellent book suggests replacing traditional notions of government-channeled aid with a new model for relieving poverty and stimulating development. The new model relies on profit-making businesses, especially multinational corporations (MNCs). The MNCs have an economic incentive to tap the great market that exists, all but hidden, at the bottom of the economic pyramid. The professor of business administrations demonstrates clearly that it is possible to develop business models that allow the poorest of the poor to participate actively in their own economic development by becoming entrepreneurs. Although the individuals at the bottom of the pyramid (referred to as BOP) have little money, collectively they represent a vast pool of purchasing power. They welcome opportunities to escape their oppressive burdens, including predatory intermediaries, corrupt governments and the societal “poverty penalty” that requires them to pay more than the rich for similar services. Clearly written, well documented and furnished with an abundance of anecdotes, getAbstract considers this book a must-read both for those interested in alleviating poverty and for those looking to tap a vast new market for consumer goods.

Take-Aways

  • The people at the bottom of the economic pyramid live on less than $2 per day. They represent a vast potential market rich in human and material resources.
  • Traditionally, aid has gone through government channels. Instead, multinational corporations should play a productive, active role in relieving poverty.
  • To improve the lot of the poor, treat them as entrepreneurs and consumers.

About the Author

C.K. Prahalad is Harvey C. Fruehauf Professor of Business Administration and professor of corporate strategy and international business at the University of Michigan Business School. He co-authored the global business bestseller Competing for the Future.