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Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
“Un#l	
  now,	
  globaliza#on	
  has	
  been	
  
driven	
  by	
...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
What	
  Has	
  Changed?	
  
	
  
Wealthy>$20,000 800
Emerging
M...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014Prahalad and Hart, Strategy + Business, January 2002
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
Growing	
  Momentum	
  
in	
  the	
  BoP	
  
1998 2002 2004 200...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
The	
  BoP	
  Global	
  Network	
  
www.bopglobalnetwork.org
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
• Nutrition
• Water
• Sanitation
Observation:
Billions of peopl...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
•  Most	
  corporate	
  ini#a#ves	
  in	
  the	
  BoP	
  have	
...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
Need	
  =	
  Demand	
  
Affordability	
  =	
  Purchase	
  	
  
T...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
Why	
  Have	
  These	
  
Taken	
  Off?	
  
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
The	
  Unfinished	
  Symphony	
  
Symphony No. 8 in B Minor, 1822
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
Cemex:	
  
DIY	
  Homebuilders	
  
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
The	
  ChotuKool	
  
Godrej and Boyce
“The Category Buster”
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
Thinking	
  Like	
  a	
  Mountain	
  
The Rifle Shot
“Targeting...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
The	
  Base	
  of	
  the	
  Pyramid	
  Protocol:	
  
Toward	
  ...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
Solae:	
  
Soy	
  Ecosystem	
  in	
  India	
  	
  
•  Rooftop G...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
Next	
  Genera>on	
  
BoP	
  Strategy	
  
BoP	
  1.0	
  
• BoP	...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
During the last decade, first generation
“Base of the Pyramid” ...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
Ques>ons	
  
How big is the BoP?
Are there different segments?
...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
	
  More	
  Ques>ons	
  
Intra vs. Entre
Are BoP entrepreneurs ...
Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
Stuart	
  L.	
  Hart	
  
Stuart.Hart@uvm.edu	
  	
  	
  	
  
	
...
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Stuart L. Hart - Enterprise for a Sustainable World

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Aalto Global Impact organized together with the New Global an event called Co-creating Business Ecosystems in Emerging Markets on 17th of June. The event was hosted by Fortum.

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Stuart L. Hart - Enterprise for a Sustainable World

  1. 1. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 “Un#l  now,  globaliza#on  has  been   driven  by  the  west  and  imposed  on   the  rest”   The World Turned Upside Down The Economist, 2010
  2. 2. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 What  Has  Changed?     Wealthy>$20,000 800 Emerging Middle Class (MoP) $2.000-20,000 1,700 Base of the Pyramid (BoP) (Prahalad & Hart, 2002; Hart & Christensen, 2002; London & Hart, 2004; Prahalad & Hammond, 2002) <$2,000 4,500 Saturation of current markets Cost barriers; Environmental tipping points New technologies, products & business models
  3. 3. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014Prahalad and Hart, Strategy + Business, January 2002
  4. 4. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 Growing  Momentum   in  the  BoP   1998 2002 2004 20092000 Prahalad & Hart Draft BoP LL “Fortune at BoP” WRI Conference MI & Cornell Conference 2013 Hybrid Value Chains Growing Inclusive Markets Opportunities for the Majority Sustainable Livelihoods Pro-Poor Business Business Against Poverty Social Business Social Entrepreneurship Base II Conference 2013 BoP Regional Meeting BoP Global Network Summit 2012 Social Enterprise Inclusive Business Green Leap
  5. 5. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 The  BoP  Global  Network   www.bopglobalnetwork.org
  6. 6. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 • Nutrition • Water • Sanitation Observation: Billions of people with unmet needs… BOP = Untapped Market • Energy • Communications • Health Ini>al     Assump>on   <$3,000/yr BoP (D, E, F +) ~4.5 billion > $15,000/yr ToP (A, B) ~800 million $3,000 - 15,000/yr MoP (C, D) ~1.5 billion Source: Erik Simanis
  7. 7. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 •  Most  corporate  ini#a#ves  in  the  BoP  have  been   focused  exclusively  on  “business  model  innova#on”:   – Lowering  a  product’s  unit  cost  (e.g.  sachets)   – Reducing  costs  by  outsourcing  produc-on  to  developing   country  partners   – Extending  product  distribu-on  into  slums  and  rural  areas   – Partnerships  with  NGOs  for  “on-­‐the-­‐ground”  capability   Result: Child With a Hammer “Selling to the Poor” First  Genera>on    BoP  Strategies  
  8. 8. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 Need  =  Demand   Affordability  =  Purchase     ToP–  “Create  needs  in  exis#ng  markets”     BoP–  “Create  markets  from  exis#ng  needs”     The  Tyranny  of   “Unmet  Needs”  
  9. 9. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 Why  Have  These   Taken  Off?  
  10. 10. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 The  Unfinished  Symphony   Symphony No. 8 in B Minor, 1822
  11. 11. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 Cemex:   DIY  Homebuilders  
  12. 12. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 The  ChotuKool   Godrej and Boyce “The Category Buster”
  13. 13. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 Thinking  Like  a  Mountain   The Rifle Shot “Targeting low cost products to BoP customers” Creating Wide and Compelling Value Propositions
  14. 14. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 The  Base  of  the  Pyramid  Protocol:   Toward  Next  Genera>on  BoP  Strategy     2nd  Edi>on   2008     Erik Simanis Stuart Hart Duncan Duke Cornell University Justin DeKoszmovszky S. C. Johnson & Son, Inc. Patrick Donohue Enterprise for a Sustainable World Gordon Enk Partners for Strategic Change Michael Gordon University of Michigan Tatiana Thieme Cambridge University www.bop-protocol.org Co-­‐Crea>on  By  Design  
  15. 15. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 Solae:   Soy  Ecosystem  in  India     •  Rooftop Gardens as green gathering space within the community •  Creation of a healthy atmosphere in which to do cooking demos, sell packaged items, and discuss healthy living •  Serve as a home base for the growers group •  Located at schools, furthering embeddedness within children's live
  16. 16. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014
  17. 17. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 Next  Genera>on   BoP  Strategy   BoP  1.0   • BoP  as  producer/consumer   • Deep  listening   • Reduce  price  points   • Extend  distribu#on   • Deriva#ve  product  technology   • Arm’s  length  rela#onship  via   NGOs   BoP  2.0   •   BoP  as  business  partner   •   Deep  dialogue   •   Expand  imagina#on   •   Marry  capabili#es   • New,  sustainable  technology   •   Direct,  personal    rela#onships   “Structural Innovation” “Embedded Innovation”
  18. 18. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 During the last decade, first generation “Base of the Pyramid” (BoP) ventures focused primarily on “finding a fortune at the BoP” by selling products to the world’s four billion poorest people. Many of these initiatives did not scale, and some failed outright. But through that experience, crucial lessons have been learned. Innovators are now succeeding thanks to a more sophisticated and nuanced approach based on “creating a fortune with the BoP.”
  19. 19. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 Ques>ons   How big is the BoP? Are there different segments? Do you have to include the poorest? How big are the returns? Are market returns realistic? Do you have to reward investors? How big is a BoP venture? Are there different growth objectives? Do you have to scale up to count?
  20. 20. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014  More  Ques>ons   Intra vs. Entre Are BoP entrepreneurs preferred? Can corporations create the white space? Urban vs. Rural How do villages and slums differ? Do you have to include both? Social vs. Environmental Is poverty reduction enough? What about environment when it comes to impact?
  21. 21. Copyright Stuart L. Hart 2011Copyright Stuart L. Hart 2014 Stuart  L.  Hart   Stuart.Hart@uvm.edu          www.stuartlhart.com     www.e4sw.org       6/25/14   21

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