Serving poor people in rich countries: the bottom-of-the-pyramid business model solution

Abstract

Purpose – The purpose of this paper is to suggest that firms should transpose bottom-of-the-pyramid (BOP) strategies to top-of-the-pyramid (TOP) countries through adapted business models, noting that strategies usually apply to developing countries. This would enable them to address the consequences of the economic crisis that has increased the number of poor and financially constrained customers in developed countries. Design/methodology/approach – This is a conceptual article based on current research and multiple examples from real-world companies that have implemented BOP business models. These are viewed from the angle of frugal innovation, a fresh perspective on innovation as an outcome and process, which means innovating while significantly economizing the use of scarce resources. Findings – The paper explains how firms should adapt the three dimensions of their business models (value proposition, resources and competences and organization) to transpose BOP business models to TOP countries. Limitations and advantages of this transposition are also detailed. Research limitations/implications – A lack of prior research on how firms can confront poverty in TOP countries is emphasized. Further studies are needed to help firms adapt to the new economic conditions in TOP countries. Practical implications – Practitioners can use the recommendations herein to adapt their business models and address dramatic economic and social changes in the developed countries in which they function. Originality/value – Considering the differences between developed and developing countries, firms should promote a BOP mind-set, rather than struggling to transpose full BOP business models to TOP settings.