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BOP conference presentation paper "The balancing act of optimised value creation

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Presentation about paper "The balancing act of optimised value creation", …

Presentation about paper "The balancing act of optimised value creation",
Proceedings of the International Conference on Impact of
Base of the Pyramid Ventures, Delft, The Netherlands, 16 - 18 November, 2009.

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  • 1. THE BALANCING ACT OF OPTIMISED VALUE CREATION Impact of Base of the Pyramid ventures Conference 2009 Anand Sheombar (anand.sheombar@gmail.com) Kobus Smit Gilbert Silvius Utrecht University of Applied Sciences Utrecht – The Netherlands
  • 2. What is BOP? Base of the economic Pyramid (BOP) or Bottom of the Pyramid 2
  • 3. ICT & BOP? 51-100$...x Billion/yr Estimated BOP market and focus on annual ICT spending per region (WRI, 2007) 3
  • 4. The BOP & ICT Research Project  How can multinational ICT companies (ICT MNC) benefit from entering the Base of the Pyramid (BOP) market in a commercial successful and sustainable way?  And what could be the opportunities in the BOP market for multinational ICT companies?  Research project led to publications on partnership issues & here value creation. 4
  • 5. Research area Local partner (NGO, local Multinational ICT entrepreneur, local company governmental institution etc.) Base of the Pyramid (BOP) 5
  • 6. Research Questions  Which variables influence the value creation of BOP projects by ICT MNCs;  What is the nature of these variables, and  How are these variables related. 6
  • 7. Three elements... 7
  • 8. Business model - strategy “a business model describes the value an organization offers to various customers and portrays the capabilities and partners required for creating, marketing, and delivering this value and relationship capital with the goal of generating profitable and sustainable revenue streams”. Osterwalder (2006) However, there are a variety of definitions for business model and strategy in use (Klein, 2008, Morris et al., 2005). 8
  • 9. Quality dimensions of business models for the Base of the Pyramid (Klein, 2008) 9
  • 10. Partnerships are… “an association between two or more persons, groups, or organizations who join together to achieve a common goal that neither one alone can accomplish” (Mullinix, 2002) 10
  • 11. Product & service development Product & service development refers to the successful delivery of those to the BOP and abinding the 4As, namely Affordability, Acceptability, Availability and Awareness that have proven to be essential for business success and for creating value while serving the world’s poor (Prahalad 2005; Anderson and Markides 2007). 11
  • 12. Literature survey on these elements 12
  • 13. Hypothesis based upon literature survey 13
  • 14. Data collection – 8 cases Project IT MNC Description M-Pesa Vodafone (Safaricom in Kenya) Mobile payments & banking. Village Phone Grameen & Nokia in Uganda Rural shared telephone facility. Village Connection Nokia-Siemens Networks Rural local phone network in the village. (NSN) Unlimited Potential Microsoft Various ICT activities aimed at emerging (Telecenter) markets. i-Community HP in South Africa Telecenter. World ahead (Classmate Intel Sustainable technology for users in PC) developing countries. Digital Bridge Alcatel-Lucent Bringing connectivity to the unconnected. Communication for all Ericsson Bringing communication to all. 14
  • 15. The Research – Sources of Evidence  Interviews  Archival records  Documents  Multiple case study research 15
  • 16. Findings of the cases 16
  • 17. Example M-PESA •Pay As You Go charging model •Banking for the unbanked. BOP business model & strategy Product & service Partnership development Usage •Distribution via M- different from PESA agents initial design. •“Private social private” partnership. M-PESA (Low- Public private CBA banking Safaricom telecom M-PESA Educational development income) funding activities operations agents marketing joint project Consumer Faulu MFI 17
  • 18. “Average result” of the cases vs hypothesis 18
  • 19. Mix of findings & hypothesis 19
  • 20. Conclusion  Variables emerge in the researched cases  They are BOP business model & strategy, product & service development and partnerships.  Influence the value creation of BOP Ventures  Each of these variables has certain characteristics:  Business Model & Strategy → quality  Product and Service → process of P & S dev.  Partnerships → type, process & performance 20
  • 21. The road ahead  Limitations  Future research  Recommendations 21
  • 22. 22