BOP Challenge
Providing targeted business assessment for SMEs in order to reinforce and/or adopt business models to serve the Bottom of the Pyramid (BOP) sectors
Fast facts:
Objective:
Improve the economic conditions in the BOP, whilst improving companies’ product portfolios and diversifying sources of revenue
Duration:
5 weeks: 4 weeks remotely* / 1 week field visit
*:EMI consulting initiatives only require a mínimum of 1 week in Colombia for plan implementation. The first 4 weeks are flexible in that they can be done remotely or in Colombia. However, volunteers would be fully responsible for traveling/living expenses during that time. EMI does not have financing available for initiative fases other than the final week field visit.
Context:
By BOP we refer to Bottom (or Base) of the Pyramid markets. C.K. Prahalad and Stuart Hart, authors of The Fortune at the Bottom of the Pyramid, describe it as “4 billion people with an annual per capita income – based on purchasing power parity in U.S dollars – of less than $1500 dollars, the minimum considered necessary to sustain a decent life.» Essentially, we’re speaking of both the largest group of consumers in the world as well as the group with the least amount of income. Worldwide, this represents a multi-trillion dollar market because of its size. And while this should excite companies to invest, this enormous market has largely been ignored.
So why care about the BOP? The reasons should be obvious. The BOP represents enormous opportunities for companies to invest in providing products and services to this segment as well as providing employment to its consumers. Currently, multinational companies have been considered most suitable to take advantage of the opportunities in the BOP and most capable of creating value for the same. But what about small and medium enterprises?
Colombia is a country in which approximately 32.7% of its population belongs to the bottom of the pyramid. Given the economic reality in Colombia, supporting SMEs is fundamental to ensuring more inclusive development in the country, given especially for their contribution to employment (roughly 80% of all jobs). For these reasons, orienting these companies to create value in the BOP may be beneficial to both SMEs and their customers.
The program:
The BoP Challenge forms consultant teams with volunteers of different countries and skill sets and trains them in order to provide a free-of-charge service to an SME in Colombia. The overall goal would be to either reinforce existing practices, develop new ones, and/or adapt business models to serve the BOP segment in the country.
Measuring the client company across 5 areas allows consultants to determine the viability of enhancing current products/services, or launching new ones, in the BOP:
- Innovation
- Costs (overhead)
- Production and Capacity
- Associativity (memberships in associations, networks)
- Marketing
Understanding the current situation of the company, consultants then proceed to develop proposals that would improve company prospects within the BOP.
The results of the assessment and improvement proposals are then presented to management at the initial stage of the week field visit in Colombia. Throughout the rest of the week, consultants work directly with management to come to terms on improvement plans and make initial steps towards implementation. They then report their results to management and EMI staff at the end of the field visit.