Poverty Alleviation through Sustainable Strategic Business Models: Essays on Poverty Alleviation as a Business Strategy Defended on Friday, 3 October 2008

How can the private sector serve the unmet needs of the world’s poor while, at the same time, attracting new business opportunities and advancing the standard of living of those living in poverty? One approach to this, known as the base-of the-pyramid, is for the private sector to develop towards including the poor as both producers and consumers. In this thesis we focus on some critical questions in base-of-the-pyramid research. In cooperation with NGOs, development organizations and micro finance institutions, we collected a unique dataset of 143 firms operating in base-of-the-pyramid markets in a total of 105 countries. Their focal group of customers, employees, suppliers, and/or distributors have an average daily purchasing power of $2 or less. Building upon this dataset, we develop an empirically derived classification of business challenges for firms at the base-of-the-pyramid, and examine differences with high-income markets. We also extend and test the central postulate that embedding social and environmental value in a firm’s business model drives a firm’s financial performance at the base-of-the-pyramid. Lastly, we build a management support model, which can be used to develop profitable pro-poor business models. We provide managers and entrepreneurs with the questions to ask, the framework to help formulate answers to these questions, and the qualities to search for in the answers. To this end, we clarify and conceptually advance the strategic business model concept, which provides the multi-theoretical approach necessary for disruptive innovation and augments our understanding of competitive advantage.


strategy in low-income markets, poverty alleviation, social issues in management, doing well by doing good, business models, management support model, sustainable firm performance, survey data, organization and management theory, strategic management, base-of-the-pyramid, inclusive markets

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