Science & Technology Studies Framework for Bottom of the Pyramid Business Strategy Assessment_Vijit Sunder_MSc Global Health Scholarly Paper 2014

SCIENCE AND TECHNOLOGY STUDIES FRAMEWORK
FOR BOTTOM OF THE PYRAMID BUSINESS STRATEGY ASSESSMENT
Vijit Sunder (vijit.sunder@gmail.com)
MSc Global Health, specialization in Innovations
McMaster University & Maastricht University
July 31, 2014
Framework

STS
CONCEPTS

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INTRODUCTION:
Bottom of the Pyramid market innovations has received rising attention both as a lucrative
untapped business opportunity and driver for eradicating poverty. In Global Health, many of the
key issues colleagues in this field grapple with, for example malnutrition, poor sanitation and
inadequate healthcare services is also closely linked with the obstacle of alleviating the
economic misery of the poor (Pervez, Maritz, & De Waal, 2013). Innovations targeted for the
Bottom of the Pyramid (BoP) market presents an inclusive capitalistic approach to solving
Global Health issues and alleviating poverty by framing the poor as a neglected and
underserved market ripe with profitable venture opportunities (Prahalad, 2010).
However, profits have been elusive for many businesses and entrepreneurs at the Bottom of the
Pyramid market (Karamchandani, Kubzansky, & Lalwani, 2011). The BoP market presents its
own unique set of challenges that force enterprises to adjust their traditional business strategies
applied for the higher and middle income population market (i.e. top and middle of the pyramid
market segments) or for these enterprises to create innovative business strategies tailor-made
for the BoP Market (Karamchandani, Kubzansky, & Lalwani, 2011). The businesses and
entrepreneurs that are able to innovate and disrupt traditional business strategies are the ones
likely to introduce and profit from innovations in the BoP market (Working with the Bottom of the
Pyramid: Success in Low-Income Markets, 2007).
In the academic field of Science and Technological Studies (STS), the relationship between
society and scientific/technological innovations is investigated extensively. STS attempts to
answer how values of a society (i.e. social, political and cultural) impact the adoption of
innovations into a society and vice versa. The abundant catalogue of literature in STS yields
crucial insights into how to make innovations work for the poor. Yet, based on a review of

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related literature, research into BoP market so far lacks a comprehensive STS framework that
supports businesses and entrepreneurs to systematically assess their business strategies for
developing and implementing their innovation for the BoP market.
The objective of this scholarly paper is to fill the gap in the literature for BoP markets on a
framework applying insights from Science and Technology Studies to assess the strengths and
weaknesses of business strategies for the innovation process of products targeted for the BoP
market.
The practical purpose for this scholarly paper is to provide businesses and entrepreneurs
seeking to target innovations for the BoP market with a STS framework they can utilize to
innovate, critically evaluate or refine business strategies. In doing so, the aspiration is that more
businesses and entrepreneurs will be able to realize the untapped market opportunity at the
BoP pyramid and this will then propel the progress of reducing poverty and creating innovative
products to solve Global Health issues.
CONTENTS OF SCHOLARLY PAPER
1. Bottom of the Pyramid Market Background (page 4-17)
2. Addressing Assumptions to Profit-Driven Market Based Approach (page 16)
3. Science & Technological Studies Framework for Business Strategy Analysis (page 18-33)
4. Application of Science and Technology Studies Framework: (page 34-36)
Case Studies on Bottom of the Pyramid Market Success and Failure

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BOTTOM OF THE PYRAMID MARKET BACKGROUND
Before discussing the STS framework and its application for analyzing business strategies for
the BoP market, it is important to review how attention to BoP became popularized and the
characteristics of this specific market. Understanding this will provide a context of the logic
behind private sector firms pursing the BoP Market.
Ground Breaking Origins. The seminal publication of the initial article in 2002 and later the
bestselling book in 2004 titled The Fortune at the Bottom of the Pyramid by C.K Prahalad was
responsible for creating a new wave of strategic business thinking and debate on incorporating
four billion low-income people, approximately two-third of the world’s population which
constitutes the bottom of the economic pyramid, into the formal global market economy
(Hammond et al., 2007). The inclusive capitalism premise proposed by C.K. Prahalad in his
seminal work advocates for a profit driven market based approach to poverty reduction
(Hammond et al., 2007).
In The Fortune at the Bottom of the Pyramid, Prahalad had initially only considered the role of
multinational corporations to compete at the bottom of the world’s economic pyramid (Prahalad
and Hart). It is important to note however that the proposition that the private sector can play an
important role in addressing the needs of the poor while earning profits also apply beyond
multinational corporations to all firms participating in the private sector, for example large
national companies, mid-size companies, small start-up enterprises and entrepreneurs
(Karamchandani, Kubzansky, & Lalwani, 2011).
The World Economic Pyramid. The distribution of wealth and purchasing power of the
different segments of the world’s populations can be captured visually in a pyramid as shown in

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Figure 1. This figure is taken from Prahalad’s’s book The Fortune at the Bottom of the Pyramid
(Prahalad, 2010).
Figure 1: World Economic Pyramid
Tier I represents the affluent segment of the world’s population, this segment is composed of
middle and upper income individuals in developed countries plus wealthy elites from the
developing countries (Prahalad & Hart, 2002). Tier 2 and 3 represents poor individuals in
developed countries and the rising middle-income individuals from developing countries
(Prahalad & Hart, 2002). Tier 4 represents the bottom of the pyramid, which is the focus of
Prahald’s work and the subsequent generation and discussion of business strategies targeted
for the BoP market by industry and academia.
The Call for Tier 4 Focus. Prahald asserts that firms in the private sector have been missing
out on profitable venture opportunities by neglecting the Tier 4 segment and only focusing their
attention developing products and meeting consumer needs for the Tier I, 2 and 3 segment of
the economic pyramid (Prahalad & Hart, 2002).

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Prahalad lists six general misconceptions that the private sector must change to appreciate the
commercial value and market potential of the Tier 4 segment in his seminal article, The Fortune
at the Bottom of the Pyramid.
Ø Misconception One: The cost structure of our enterprise does not allow us to profitably
compete at the bottom of the pyramid and target the poor as consumers
Ø Misconception Two: There is no demand by the poor as consumers for products, we
market to Tier 1, 2 and 3 segments of the economic pyramid.
Ø Misconception Three: Innovations in Science and Technology is only appreciated and
demanded by consumers in Tier 1,2 and 3 segments. Tier 4 consumers are content with
previous generations of scientific and technological advancements.
Ø Misconception Four: It is the government and nonprofits responsibility to meet Tier 4
needs. BoP is not important for contributing to the long term sustainability and viability
for our business
Ø Misconception Five: Managers are not motivated to address business challenges with
humanitarian dimensions to it
Ø Misconception Six: It will be difficult to find and hire talented managers who want to
work in BoP market and target the Tier 4 segment. Human capital is only motivated in
developing and delivering innovations for the Tier 1,2 and 3 segment of the economic
pyramid.
(Prahalad & Hart, 2002)
Other academics like Martinez and Carbonell (2007) also reflect Prahald’s stance on the need
for the private sector to refute its misconceptions about low-income individuals at the Tier 4
markets. Martinez and Carbonell (2007) lists three additional misconceptions that need to be
overcome to draw attention to the market potential at the BoP.

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Ø Misconception Seven: The poor do not have enough money; the return on the
investment for targeting the poor as consumers and developing products for the BoP is
too low
Ø Misconception Eight: The poor’s consumption is only restricted to products that serve
their basic needs/necessities. The poor would never purchase “luxury” items.
Ø Misconception Nine: The poor would only purchase cheap products as consumers
(Martinez & Carbonell, 2007)
Martinez and Carbonell (2007) argue that even though for an individual, the income earning is
low, the joint purchasing power of the poor is large if the private sector takes into account the
accumulated purchasing power of poor families and communities at large. Secondly, Martinez
and Carbonell (2007) state that the poor do buy luxury items like a television or gas stove if they
can afford it and if it will improve their quality of life or enjoyment.
In their critically acclaimed book titled Poor Economics, Banarjee and Duflo (2011) provide
examples through evidence based randomized control trials and observations on how the poor
think and make decisions on issues that affect them such as healthcare, education, food,
finance, etc. In Poor Economics, the authors provide evidence that would support Martinez and
Carbonel’s statement and debunk the assumption that the poor do not buy luxury items. As the
authors state “Generally, it is clear that things that make life less boring are a priority for the
poor. This may be a television, or a little bit of something special to eat or just a cup of sugary
tea ”
(Banerjee & Duflo, 2011, pp. 37). The authors cite an example of an interview they
conducted with a poor family man named Oucha Mbarbk in a remote village in Morocco. When
visiting his home, the authors noticed he had saved up his earnings over many months to
purchase a television, a parabolic antenna and a DVD player (Banerjee & Duflo, 2011). When
asked why he didn’t use that saving to buy more food even though him and his family is short on

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food, he replied laughingly “Oh, but television is more important than food!” (Banerjee & Duflo,
2011, pp. 36). For Oucho and many others, luxury purchases like televisions offer the poor to
indulge in the consumer pleasures of the market (Banerjee & Duflo, 2011). The implication of
this finding is that there is demand by the poor for products traditionally targeted for Tier 1,2 & 3
by the private sector. The authors’ conclusion from their field studies with the poor like Oucho is
that there is a strong counterintuitive trend for the poor to increase the purchase of luxuries (e.g.
better tasting food with low nutritional content or television) and reduce money spent on
necessities with their additional income/earnings (Banerjee & Duflo, 2011).
Lastly, Martinez an Carbonel (2007) debunk that the poor only purchase cheap things by stating
that in contrary the poor usually pay much higher prices than middle and upper class consumers
do for the same goods/services because of factors like the inability to obtain bulk discounts and
greater expenditure of resources like time. An example is for poor living in remote rural areas,
they will have to expend a greater effort through time and transportation costs to travel to a
distant hospital or clinic for a treatment compared to a middle to high income individual(s) living
in close proximity to healthcare services (Hammond et al., 2007). Martinez states that for
enterprises with economies of scale and efficient supply chains, there is market potential in the
Tier 4 segment for providing “quality goods at affordable prices and with attractive margins”
(Martinez & Carbonell, 2007, pp. 51).
“The company that is searching for new markets and business opportunities may find
means of commercial revitalization and ethical commitment by concentrating on the most
disadvantaged” (Martinez & Carbonell, 2007, pp. 51)

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Market Potential at the Bottom of the Pyramid. Four billion people representing a majority of
the population from developing countries in Africa, Asia, Eastern Europe, Latin America and the
Caribbean characterize the BoP market. Review of literature on BoP will yield different criteria
used to characterize this bottom of the economic pyramid (Pervez, Maritz, & De Waal, 2013).
The commonly used criterion for the bottom of the economic pyramid is the population segment
which represents individuals with per capita income that is less than $2 per day based on
purchasing power parity (Prahalad, 2010; Hammond et al., 2007; Subrahmanyan & Gomez-
Arias, 2008), or the equivalent of $3,000 or less per annum in purchasing power parity (Pervez,
Maritz, & De Waal, 2013).
Due to the sheer volume of individuals at the bottom of the pyramid, Prahalad appraises that if
this population segment were to be incorporated into the global market economy, the BoP
market would represent a multitrillion industry (i.e. accumulated purchasing power of Tier 4) for
the global private sector. Conservative measures from researchers like Subrahmanyan and
Gomez-Arias (2008) state the potential of the BoP market to be $ 5 trillion.
The industry report, Working with the Bottom of the Pyramid: Success in Low-Income Markets
published by Dansk Industri, a trade and employers association for the Danish companies
provides a detailed look into how Danish Industries can enter the untapped and uncontested
market opportunities in the BoP market. This report provides strong evidence via statistics that
support the conservative measures by researchers like Subrahmanyan and Gomez-Arias (2008)
at $ 5 trillion.
Detailed look into the data to characterize the $5 trillion market potential at the BoP are provided
in this industry report by categorizing data into regional markets, sector markets and income
distribution within the BoP population segment. The report also presents a convincing case

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through its BoP business model to support the argument that the private sector should consider
and pursue market opportunities at the BoP.
A notable table presented in this industry report is included in this scholarly paper (refer to
Figure 2) to provide the reader with a simple overview of the distribution of BoP population,
income and market size globally (Working with the Bottom of the Pyramid: Success in Low-
Income Markets, 2007).
Figure 2: BOP Population, Income and Market Size - Source: Dansk Industry Report
As seen in figure 2, BOP population constitutes an overwhelming portion of the population in
different regions of the world. The volume of poor is enormous and in regions, notable in Africa
and Asia, the BOP share of total market is worth the attention from the private sector.
Appendix A of this scholarly paper lists other detailed graphs/tables from the Dansk Industri’s
Industry report that will be of interest to the reader to get a further look into the characteristics of
the BoP market.

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Win-Win Scenario. Prahalad and those in agreement with the argument for incorporating the
Tier 4 segment into the Global market economy assert that by doing so, it is a win-win scenario
both for the poor and for the private sector (Prahalad, 2010).
Traditionally, the development community has primarily served the needs of the bottom of the
pyramid. The problem framing inherent in the traditional approach is the poor is regarded as a
population segment that requires the assistance of aid, governmental programs and charity in
order for them to meet their needs, because they are unable to meet their needs on their own
resource-wise (Hammond et al., 2007). Common solutions under this problem framing include
subsidies, handouts and increase in governmental funding, national and international for public
investments in programs and policies to reduce poverty (Hammond et al., 2007).
In contrast to the traditional development approach, the profit driven market-based approach
frames the problem that the poor is a population segment that is unable to meet their needs
because they have been neglected by the private sector due to misconceptions. Consequently,
their lack of integration into the global market economy limits the poor to access goods and
services they require to meet their needs and access to economic opportunities to lift
themselves out of poverty (Hammond et al., 2007).
Advocates for the profit driven market-based approach state that unlike the traditional
development approach, the poor is not perceived as a population segment that is helpless, in
need for assistance and unable to participate in the market because of their lack of personal
resources (Gifford, 2010). Advocates argue that “being poor” should not be misconstrued with
the idea that this population segment is precluded from commerce and market process (Gifford,
2010). Instead, the profit driven market-based approach perceives the poor as consumers and
producers that can take advantage of economic opportunities to meet their needs and escape

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poverty by participating in a competitive, efficient and inclusive market (Gifford, 2010; Hammond
et al., 2007).
By integrating the poor into the global market economy, advocates assert that the utilization of
the vast private sector resources for this market at the BoP will generate a host of innovative
products created specifically to fulfill the unmet needs of the consumers (i.e. the poor) and
improve the economic conditions of the local community of the Tier 4 segment through market
forces (e.g. foreign direct investments, creation of new market niches, employment creation for
the poor, etc) (Gifford, 2010). Additionally, advocates of a market-based approach to poverty
reduction bolster their argument by citing cases provided by the school of thought from
researchers like William Easterly and Dambisa Moyo on the inefficiencies and unsustainability
of the traditional approach to alleviate poverty and address international development/global
health challenges (Esau, 2012).
For the private sector, the Tier 4 segment would represent a Blue Ocean. Blue Ocean is a term
coined by Kim and Mauborgne in their 2005 business strategic management book Blue Ocean
Strategy. Kim and Mauborgne (2005) classify markets broadly into two categories: Red Ocean
and Blue Oceans. Red Ocean is all existing industries operating in a well-known and
competitor-saturated market space (Kim & Mauborgne, 2005). The objective of a firm in Red
Ocean is to compete with rivals to gain a greater market share and fight for existing demand
(Kim & Mauborgne, 2005). On the contrary, the Blue Ocean represents the unknown and open
markets with no existing industries, thus no competition (Kim & Mauborgne, 2005). Thus the
firm in a Blue Ocean focus is not on fighting over demand and market share, instead the firm’s
objective is to explore this uncontested market space and create demand by developing
innovations in technologies and products (i.e. goods and services) ((Working with the Bottom of
the Pyramid: Success in Low-Income Markets, 2007 ; Kim & Mauborgne, 2005).

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Tier 1, Tier 2 and Tier 3 have been the primary focus of the global private sector and as more
firms enter and compete for demand from these population segments in existing industries, the
market space gets crowded which in turns means the potential for growth and profits are
reduced for a firm (Working with the Bottom of the Pyramid: Success in Low-Income Markets,
2007). Advocates for the private sector to focus on BoP market say that because the BoP
market represents the characteristics of a Blue Ocean, private sector firms that can innovate
both in terms of products and business strategies for this market will reap the benefits over their
competitors’ decision on not pursuing this market (Working with the Bottom of the Pyramid:
Success in Low-Income Markets, 2007).
published by Dansk Industri (2007) provides a detailed explanation into why BoP are Blue
Oceans for the global private sector and the commercial benefits of pursuing this market. The
content from this industry report is summarized into a table format in this scholarly paper.
Benefits Detailed Explanation
Vast Market Size The BoP market is composed of 4 billion underserved consumers, 72 % of
the world’s population, and a purchasing power of $5 trillion. This market is
neglected by the global private sector and thus there is a shortage of
innovative products to meet this market segment’s needs and demands.
Granted the profit margins would be low for an individual consumer,
however because of the sheer volume of this market, firms that are able to
tap into this market space will see profits driven by volume over high profit
margins.
High Growth The BoP market is a source for new future growth. In regions like Africa,

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Potential countries are experiencing 5% economic growth and it is expected that the
economic growth in regions with a large BoP population like Africa, Asia,
Latin America and Eastern Europe will continue to increase in the future.
Forecasts state that consumers are expected to move up Tiers (e.g. 4 to 3)
as these regions experience growth. By creating new markets in BoP now,
private sectors can establish, expand and build on these markets as the
economic growth in these regions increase.
Uncontested
Market
Because the global private sector primary focus has been on the Tier 1, 2
and 3 population segments, this market is characterized as a Red Ocean
because of the intense saturation of competitors fighting over demand and
market share in this market space. The BoP market are considered Blue
Ocean because this market space is characterized by little to no
competitors serving the needs and supplying the products to meet the
demands of the consumers.
Cost-Saving
Opportunities
If the private sector firm is willing to adjust their business strategies to
incorporate local suppliers and distributors for their product development
and distribution process for the BoP, these firms can then take advantage of
the lower cost structures and production costs in developing markets.
Innovations
Incubator
Targeting the poor as consumers in the BoP presents an opportunity for
private sector firms develop and innovate novel products, technologies and
business strategies to gain a competitive advantage in the global market
economy.
Innovating for BoP also carries important opportunities for reverse
innovation for a private sector firm. Reverse innovation refers to the process
of developing products/innovations in developing regions and then

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repackaging and distributing these innovations as low cost products to
developed markets, thus creating new demand through pricing and creating
new market opportunities for population segments in Tier 1, 2 & 3 (Trimble,
2012).
Figure 3: Benefits for the Private Sector to target Bottom of the Pyramid Market
The President of Inter-American Development Bank, Luis Alberto Moreno summarizes the
argument for the Win-Win Scenario for the poor and private sector through profit driven market
based approach succinctly in few sentences below (Hammond et al., 2007).
Challenges and Obstacles. TK Hammond et al., 2007
Challenges. The BoP markets offer a unique set of challenges that differs from the ones
encountered in the developed markets. In order for private sector firms to be successful at the
BoP, they must reconsider their traditional strategic approaches and not only innovate with their
products but also with their business strategies in order to overcome the unique set of
challenges in these low income markets.
1
“Like consumers everywhere, the poor are constantly looking for products and services that
improve their quality of life at an affordable price. The poor are also vital producers and
distributors of an immense range of goods. Companies that are smart enough to tailor their
offerings to the needs of low-income consumers and entrepreneurs will thrive in the 21st
century”
Luis Alberto Moreno,
President of Inter-American Development Bank
(Hammond et al., 2007, pp 154)

2

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published by Dansk Industri (2007) and Harvard Business Review’s article Is the Bottom of the
Pyramid Really for You? (2011) provide a detailed explanation into the challenges for a private
sector in pursuing the Bop Market. The content from these two sources is summarized into a
table format in this scholarly paper.
Challenges Detailed Explanation
Uncertain Cash
Flow & Cash
Strapped Consumer
Consumers at the BoP have very limited purchasing power individually
and live in a day-to-day uncertainty in terms of income generation. This
poses a challenge because upfront payment of products is often not
feasible for the consumer
Geographic,
economic and
cultural proximity
Private sector firms not located in proximity to the local community of the
BoP consumers will face challenges in terms of deciding marketing
strategies because communication barrier created by distance.
Creating Demand Due to limited accessibility to various communication mediums,
consumers have a lower product awareness and understanding to
maximize product functionality. Private sector firms must think of
innovative ways to raise awareness and educate consumers regarding
the firm’s products
Undeveloped
business
ecosystems
BoP markets are characterized by weak physical, regulatory and
institutional infrastructures. This presents numerous challenges for firms
during production, packaging, storage and distribution of their products
Figure 4: Challenges for the Private Sector to target Bottom of the Pyramid Market

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ADDRESSING ASSUMPTIONS
TO PROFIT-DRIVEN MARKET BASED APPROACH
Prahalad’s pioneering work advocating market based approach as a solution to solve problems
and meet the needs of the BoP led many in the academic and industry circles to side with this
perspective, however there were also opposition. Aneel Karnani, an associate professor of
strategy from Ross School of Business, University of Michigan is a vocal critic of Prahalad’s
proposed approach. Select papers like the “Bottom of the Pyramid Strategy for Reducing
Poverty: A Failed Promise” and “Fortune␣at␣the␣Bottom␣of␣the␣Pyramid:␣A Mirage” from Karnani
argue the irresponsibility of the libertarian free-market movement for poverty alleviation (Karnani
2006; 2009).
Karnani (2009) states that Prahalad’s romanticized view of the poor as “resilient and creative
entrepreneurs and value-conscious consumers” is empirically false and this type of thinking is in
fact harmful for the poor. He emphasizes that there needs to be legal, social and regulatory
mechanism to protect the poor because they are vulnerable as consumers (Karnani 2009).
Karnani stresses that the BoP proposition by Prahalad neglects the critical role of the State in
poverty reduction. Karnani does not dismiss the benefits of the role of the private sector on
poverty alleviation, he acknowledges the vital role private sector plays. Instead he argues that
the focus should be less on the free market economy and instead on how the State can build
local and global capacity to solve problems and meet the needs of the poor (Karnani, 2009).
With that being addressed, the scope of this scholarly paper is not to analyze and conclude on
the debate on which approach is appropriate for poverty alleviation and the degree a private
sector or a State should play in addressing the problems of the poor. The objective of this
scholarly paper is to provide a Science and Technological Studies Framework that can be
applied during the profit-driven market based approach.

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SCIENCE AND TECHNOLOGICAL STUDIES FRAMEWORK
FOR BUSINESS MODEL/STRATEGY ANALYSIS
The Beginnings of the Framework. During an exchange term at Maastricht University, the
author of this scholarly paper enrolled himself in the innovations elective track for his Master of
Science in Global Health program. There, he was introduced to the academic field of Science
and Technological Studies (STS). This academic field exposed the author to concepts on the
co-relationship between technological innovations and society, and on how to use this co-
relationship in the context of making innovations work for the poor.
While completing his coursework, the author found an opportunity for the private sector firm that
is interested in the BoP market to utilize the concepts from STS for business strategy
development and assessment. After a review of related literature for business strategies for the
BoP market, examination of case studies on private sector firms that are succeeding and failing
in this market space, the author found from his literature review that there was no explicit
framework linking concepts on enabling innovations for the poor from STS studies with business
strategy for the BoP Market.
The purpose of the Framework is for private sector firms or entrepreneurs to look at each stage
of the innovation process for their product targeted at the BoP market, apply STS concepts to
either
1. Develop a business strategy for their product appropriate for different stages of the
innovation process in the context of BoP Market
2. Assess the strength of the business strategy for the individual stages and overall
innovation process in the context of BoP Market

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Conceptualizing the Innovation Process. The conceptualization of the innovation process
differs from one private sector firm to another and from one literature source to another.
Based on the review of literature sources, cross-analyzing the commonalities of the various
conceptualization of the stages in the innovation process, the innovation process is
conceptualized in the following manner.
Figure 5: Conceptualization: Stages in the Innovation Process
STAGES
IN THE
INNOVATION
PROCESS
PRODUCT

CONFIGURATION

KNOWLEDGE

TRANSFER

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1. Need(s) Identification: Involves the business strategies utilized to explore potential
unmet needs and demands at the BoP
2. Pre-market Analysis: Involves the business strategies utilized by the private sector firm
to understand the market environment their potential target consumer is located in
before product launch.
3. Product Development: The business strategies involved in developing potential
product ideas and the chosen product to meet consumer needs and demands.
4. Product Testing: The business strategies involved in testing the product on a sample
population before product launch. Purpose of testing is to validate if product meets the
criteria formulated from consumers needs identification and pre-market analysis.
– Product Configuration: Product Testing is closely coupled with Product
Development since it provides vital information required to make decision if the
product needs to be configured during product development.
5. Product Distribution and Marketing: Involves all the business strategies associated
with the distribution and marketing activities required to raise awareness and
accessibility of products for target consumers. Product Distribution and Marketing also
refer to the Product Launch.
6. Post Market Analysis: Involves the business strategies utilized by the private sector
firm to understand the success of creating demand for the product (e.g. sales, rate of
adoption, etc) among target consumers and the market environment post product
launch.
– Knowledge transfer: Conducting Post Market analysis provides useful data the
private sector can utilize to ..
i. Further understand consumer needs
ii. Refine their business models/strategies
iii. Configure products further

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…. to better supply consumer demand and increase profits or create new market
opportunities.
It is important to note that this innovation process conceptualization is the author’s personal
perception of the process and it may not capture the true sequential stages of the innovation
process a given private sector firm undergoes when developing products for the BoP products.
Bearing that in mind, the purpose of the innovation process conceptualization provided in this
scholarly report is to explicitly demonstrate through a framework on how to apply STS concepts
to develop or assess business strategies for each stage of the innovation process. Even if the
innovation process is conceptualized differently, the concepts in the STS framework remain
consistent and can be applied accordingly to different interpretations of the stages in the
innovation process.
Principle from STS. The principle message academics from STS field proclaim is that when
developing products, whether it be goods, services or interventions for the poor, it is not
sufficient to focus only on the technology of the innovation itself (Leach & Scoones, 2006). It is
also vital for organizations and individuals to focus on the community the innovations will be
used in because the local social, political and cultural values of the community the poor live in
play an influential and significant role in the extent of the acceptance of the innovation by the
poor (Leach & Scoones, 2006). In short, local context needs to be carefully and critically
analyzed to enable innovations to work for the poor.
Addressing an Inconsistency. In terms of applying literature from STS to business strategy
development and analysis, there is an important inconsistency that needs to be addressed. The
literature from STS that was reviewed for this scholarly paper was primarily written in terms of

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how scientific and technological products can be transferred to the poor better through the
innovation process via
i. State measures like policy and public programs
ii. Healthcare/Clinical Institutions
iii. Non Governmental Organizations
iv. Scientific institutions and the culture of how research is conducted
For those literature sources mentioning the private sector, the emphasis was on how the private
sector as an actor fits into the overall innovation process for a State to transfer innovations to
the poor. For example, Public-Private Partnerships and how this relationship between the State
and private can allow for the successful development and uptake of innovations for the poor
(Leach & Scoones, 2006; Jasanoff, 2004; Jasanoff 2007; Bijker 2009;).
Thus there is an inconsistency in terms of the reviewed STS literature’s lack of focus on the
private sector’s internal innovation process and this scholarly paper’s intense focus on the
internal innovation process of the private sector. On a positive note, it is important to note that
the concepts for transferring innovations to the poor remain consistent in both circumstances.
For this scholarly paper, STS concepts in the reviewed literature were critically evaluated to
judge its applicability for the internal innovation process for a private sector firm. The concepts
that were appropriate in the context of a private sector’s internal innovation process were
reformulated into a Science and Technological Framework for Business Strategy Analysis.

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Presenting the Science and Technological Framework
For Business Model/Strategy Analysis.
Stages in the
Innovation Process
STRENGTH OF BUSINESS STRATEGIES
Need(s) Identification The needs of the BoP are homogenous
among all populations in this market
segment.
The needs of the BoP are
heterogeneous and vary from one local
society to another.
Pre-market Analysis: Statistical data is primarily dependent
upon when assessing the market and
for pre-product development. Analysis
done only on the technology itself.
Ethnographic information is given equal
importance with statistical data. Analysis
done on both the co-relationship
between technology and society.
Product Development Development of product occurs in a lab
isolated from local society context.
Development of product occurs in a lab
embedded in the local society context
Product Testing The BoP population regarded as
consumers and outside of the
innovation process
The BoP population regarded as
consumers + business partners and
embedded within the innovation process
Product Distribution and
Marketing:
Marketing and distribution methods that
work for one local context will work for
another local context
Socially responsible and locally reflexive
marketing and distribution methods.
Post Market Analysis Statistical data regarding business
strategic success is primarily gathered
to analyze (e.g. volume of sales and
profits).
In addition to the statistical data,
ethnography studies are conducted to
analyze how the local society and
innovation is impacting each other.
Figure 6: STS Framework for Business Model/Strategy Analysis
STS
CONCEPTS
FOR

BoP
MARKETS

WEAK
STRONG

Diffusion
Model

Translation
Model

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The STS Framework presented provides an analysis tool private sector firms and entrepreneurs
can utilize when developing or assessing their business strategies for transferring innovations to
the BoP market. The business strategies for each stage in the innovation process will fall along
this STS Spectrum depending on the interpretation of the degree the business strategy aligns
with a translation or diffusion model.
Strength of Business Strategy based on STS Models. According to the STS literature
reviewed, the approach for the development and implementation process of innovations for the
poor can be categorized into these two models. These two models also describe the overall
process on how innovations reach the end users (i.e. the poor in the context of this scholarly
paper) (Blume and Rose, 2003; Rogers, 2003).
Prominent academics like Bijker, Leach, Scones and Jasanoff from STS and Global Health
propose that the diffusion model is the traditional approach utilized by organizations during the
innovation process and these academics argue that this approach is ineffective (2006; 2004;
2007; 2009;). It is ineffective because the diffusion innovation process yields products that do
take into account the local social, political and cultural context (Leach & Scoones, 2006;
Jasanoff, 2004; Jasanoff 2007; Bijker 2009;). By not taking the local context into consideration,
the products for the BoP will face high resistance and low acceptance by the end users, the
poor at the BoP (Leach & Scoones, 2006; Jasanoff, 2004; Jasanoff 2007; Bijker 2009;).
Alternatively, these academics propose that the translation model needs to be the new
approach public and private organizations should adopt strategically during their innovation
development and implementation process (Leach & Scoones, 2006; Jasanoff, 2004; Jasanoff
2007; Bijker 2009;). The reason is as these academics argue, the translation model takes into
account the local social, political and cultural context (Blume and Rose, 2003; Leach &

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Scoones, 2006; Jasanoff, 2004; Jasanoff 2007; Bijker 2009;). By taking the local context in
consideration, the products for the BoP will face low resistance and high acceptance by the end
users, the poor at the BoP (Blume and Rose, 2003; Leach & Scoones, 2006; Jasanoff, 2004;
Jasanoff 2007; Bijker 2009).
In terms of the STS framework for business strategy analysis, if the business strategy has
elements that aligns with the STS concepts from diffusion model of transferring innovations to
the poor, the weaker the strategy is. If the business strategy has elements that align with the
STS concepts from the translation model of transferring innovations to the poor, the stronger the
strategy is.
Detailed Look: Diffusion versus Translation. Before describing how the strength of the
business strategy for a specific stage in the innovation process varies depending on the STS
concepts for BoP markets, a detailed look into the overall model of diffusion and translation is
needed. This understanding will provide the reader with an understanding of how the innovation
stage specific STS concepts fit under the overall arch of the two models, diffusion and
translation.
Figure 7: Diffusion Model of innovations
Transferability to the Bottom of the Pyramid
Local

Society

(End
Users)

Private
Sector

(R&D
LAB)

Innovation

Diffusion

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The diffusion model seen in Figure 7 is the classic top-down linear approach to the development
and implementation process for an innovation targeted for the poor (Blume and Rose, 2003). In
this model, the innovation is developed within the confines of the Research and Development
Laboratory of the private sector firm, which is isolated from the local society in which the
innovation is to be implemented in (Blume and Rose, 2003). The premise of a top-down process
of the diffusion model is that only the Natural and Technical Sciences is taken into account
when developing the scientific and technological innovation (Blume and Rose, 2003). The
Social Sciences is neglected during the development and implementation process for an
innovation in the diffusion model. As Bijker, Leach, Scones and Jasanoff argue, the neglect of
the Social Sciences inherent in the diffusion model is detrimental to the innovation process
because the local political, social, cultural issues surrounding the technology and its end users
is not taken into consideration during the innovation process (2006; 2004; 2007; 2009;).
By ignoring the local context, these academics argue that organizations fail to strategize and
incorporate vital information needed to enable the innovations to work for the end users (i.e. the
consumers at the BoP) in their local community plus gain acceptance for that innovation by the
end users (Blume and Rose, 2003; Leach & Scoones, 2006; Jasanoff, 2004; Jasanoff 2007;
Bijker 2009;). In the diffusion model, once the innovation is developed in the confines in the
private sector firm’s research and development laboratory, the innovation is communicated
through certain channels over time until the end users in a society adopt it (Rogers, 2003). This
implementation process described is referred to as diffusion. In the diffusion model, it is
assumed that once the innovation is developed, the end users will passively accept the
innovation (Rogers, 2003).

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Figure 8: Translation Model of innovations Transferability to the Bottom of the Pyramid
The translation model seen in Figure 8 is the alternative bottoms-up, participatory approach to
the development and implementation process for an innovation targeted for the poor. In this
model, the innovation is developed with the Research and Development laboratory of the
private sector firm embedded within the local society in which the innovation is to be
implemented in (Blume and Rose, 2003). This does not necessarily mean the physical location
of the facilities for the development and implementation of the product has to be in local society,
for example the village.
Having the laboratory of the private sector firm embedded within the local society means the
local political, social, cultural issues surrounding the technology and its end users is critically
analyzed during the innovation process (Blume and Rose, 2003). This is the STS principle that
academics like Bijker, Leach, Scones and Jasanoff propagate for when transferring global
innovations in Science and Technology to the poor (2006; 2004; 2007; 2009;). Jasanoff coins
this STS principle as co-production; “Science[technology] and Society, in a word, are co-
produced, each underwriting the other’s existence” (Jasanoff, 2004).

Local
Society

(End
Users)

Innovation

Private
Sector

(R&D
LAB)

Translation

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In the translation model, the end users are active agents in the innovation process (Blume and
Rose, 2003). The end users appear at the start of the process and continue to play a vital role
during the entire development and implementation process in innovations (i.e. start to finish)
(Blume and Rose, 2003). Agent refers to the ability to bring about change through actions (May
2013). Unlike the diffusion model, end users do not passively accept the innovation but play a
key role in the development and implementation of the scientific and technological product. By
allowing end users to be an active agent, private sector firms can minimize and raise
acceptance for the innovation among the end users since the end users have invested
resources (e.g. time and knowledge) to the final product (Blume and Rose, 2003).
STS framework àStages in the Innovation Process
For each of the stages, an in-depth look is provided below.
STS Concepts à Need(s) Identification. A strategy that falls under the diffusion model
considers the needs of the BoP to be homogenous among all populations. This means that
there is a perception that a problem framing in one local society will be the same in another
local society (Leach & Scoones, 2006). For example, if a firm is looking to develop an innovation
regarding malnutrition, the perception is the needs (i.e. problems) of the end user in a village in
Kolkata, India is the same as the needs (i.e. problems) of the end user in a shanty town in
Pacifico de Villa, Peru. This type of problem framing would lead to a business strategy in
developing innovations regarded as “big hit” technologies, which are solutions assumed to be
applicable anywhere at anytime (Leach & Scoones, 2006).
Academics against the diffusion model like Leach and Scones argue that the “tendency towards
universalized views of poverty problems means that technical fixes can miss their mark badly if
we ignore poor people’s own perspectives and concerns” (Leach & Scones, 2006, pp.15).

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Leach and Scones (2006) point out three points that point out the weakness of the diffusion
model.
1. Problems vary from one local society to another because the ecologies and practices
developed in that region for the poor to sustain their livelihoods are highly diverse. Also
within the local society itself, the different interactions between social and ecological
conditions will vary producing multiple needs and variation of problems (e.g. regions,
localities and community specific problems).
2. The strategy for big hit technologies may cause firms to miss out on the opportunity to
investigate localized tried and tested “old technological solutions” in different societies,
allowing them to adapt these technologies further to develop an innovation for a specific
local society
3. The assumption of this model on focusing solely on the technical aspect of the
innovation and not on the social aspects will mislead the firms on the true underlying
nature of the problem. This will cause firms to develop innovations that are ineffective
solutions because of incorrect understanding of the problem. For example, malnutrition
may not be solely due to the nutritional content of the food item itself, it may be due to a
local society’s eating habits, food preferences, infrastructure problems or political issues.
Strategies that acknowledge that the needs of the BoP are heterogeneous and vary from one
local society to another are stronger. The translation model allows the innovation process to be
rooted in local circumstances and local realities (Leach & Scoones, 2006). According to Leach
and Scones (2006) effective strategies are those that “enable local perspectives and
experiences – those of people whose lives consist of ‘getting by’ in absolute poverty – to help
shape spending priorities” (Leach and Scones, 2006, pp 26) and needs the firms choose to
address.

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STS Concepts à Pre-Market Analysis. In the diffusion model, because the social science is
not given significance, market analysis approach would primarily look at statistical data (i.e. hard
figures) on a problem (Yates Doerr, 2014). For example, for the malnutrition problem, a strategy
approach would be to rely on numbers like the number of people malnourished and the amount
of nutritional quantity an individual at the BoP consumes typically in a day. Also analysis for
potential solutions would only look at the technical aspects of the innovation itself. For example,
for the malnutrition problem, the costs regarding the technology itself like increasing nutritional
content of the food item is only taken into consideration.
In the translation model, ethnographic information is given equal importance with statistical data
in business strategies. For example, for the malnutrition problem, in addition to statistical
research, a strategy approach would be to utilizing ethnographic research methods like
interviews and video diaries to collect local stories to find out the end users perspective on the
malnutrition problem (Yates Doerr, 2014). This ethnographic information would then allow a firm
to better assess the true underlying causes of the problem, evaluate and adapt their proposed
technological solutions accordingly to the local context (Yates Doerr, 2014).
STS Concepts à Product Development & Product Testing. In the diffusion model, since the
end users are assumed to passively accept the innovation, strategies for product development
and product testing places the poor outside of the innovation process. This means there are
limited avenues for the end users to actively configure the development of the product by
sharing their local knowledge, perceptions and expertise with the Research and Development
team (Blume and Rose, 2003). Product testing strategies also has a heavy focus on the viability
of the technology itself and not on the viability of technology within the local society of a targeted
BoP segment (Leach & Scoones, 2006). Product configuration only takes into account the
technical aspect of the technology. In the diffusion model, the poor are placed at the end of the

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innovation process as consumers who passively accept the innovation developed and tested in
a laboratory isolated from their local societal context (Blume and Rose, 2003).
In the translation model, the end users are active agents in the entire innovation process, thus
strategies for product development and product testing will ensure the poor are embedded
within the process (Blume and Rose, 2003). This means there are multiple avenues created by
the firm for the end users to actively configure the development of the product by sharing their
local knowledge, perceptions and expertise with the Research and Development team (Blume
and Rose, 2003). Business strategies under the translation model emphasize methods to
increase BoP engagement and for a co-participatory approach. In addition to the viability of the
technology itself, product-testing strategies also gives equal significance to investigating the
viability of the technology within the local society of a targeted BoP segment (Leach & Scoones,
2006). Product configuration takes into account both the technical and social aspect of the
technology. In the translation model, the poor are actively engaged in the innovation process
and also play a dual role as business partners as their contribution are valued and they co-
create the product with the private sector firm in a laboratory embedded within the local societal
context (Blume and Rose, 2003; Michelini, 2012; Leach & Scoones, 2006).
STS Concepts à Product Distribution and Marketing. In the diffusion model, the inherent
quality of not analyzing the social, political and cultural context of the local society of the end
users would lead to framing business strategies with the assumption that one strategy
applicable in one context will work for another (Leach & Scoones, 2006). For example, a private
sector firm operating under the diffusion model would uncritically assume the business
strategies implemented for distribution and marketing targeted at a village in Kolkata, India
would be applicable the same way for a shantytown in Pacifico de Villa, Peru. In terms of
distribution, because the private sector is not heavily focused on the social circumstances of the

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community the end users live in, distribution strategy is focused primarily on using existing
infrastructure to distribute products and lowering costs as much as it is feasibly possible. For
marketing, strategies are solely focused on increasing sales volume and profits through
maximizing customer reach.
In the translation model, because the social, political and cultural context of the local society is
investigated thoroughly and given importance, business strategies for marketing and distribution
are designed to be socially responsible and locally reflexive. Locally reflexive means that the
private sector is attentive to the notion that business strategies for one local context may not
necessarily work for another local context; it is important to critically evaluate the proposed
business strategy under a specific local context (Leach & Scoones, 2006). Because the private
sector firm is attentive of the social conditions of the end user, private sector firms also have a
sense of social responsibility in addition to achieving the bottom line. Examples of business
strategies under the translation model are to build local capacity, invest to improve
infrastructure, raise awareness through education and build partnerships with local government,
partners, distributors & nongovernmental organizations (Marthi, 2014). These strategies listed
seek to improve the local social conditions of the end users in addition to achieving business
strategic objectives (e.g. extending distribution, minimizing costs and maximizing profits)
(Marthi, 2014). In the translation model, private sector firms must be willing to invest in providing
opportunities for the poor to alleviate themselves from poverty and related global health issues
while striving to achieve profits.
STS Concepts à Post Market Analysis. In the diffusion model, once the innovation is
launched in the market, business strategies typically focus on collecting and analyzing statistical
data regarding how successful the firm was in in terms of meeting strategic financial goals for
the BoP market (Yates Doerr, 2014). These statistical data will then be used to develop

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financial projections for future business strategies through knowledge transfer. Examples of
statistical data include: customer reach, volume of sales, profit margins and demographics of
buyers of the product.
In contrast, the translation model, in addition to collecting statistical data to assess how well the
firm did in meeting strategic financial goals for the BoP, the private sector firms also conducts a
post market ethnographic studies to investigate how the local social, political and cultural
context have changed once the innovation has been accepted by the end users (Yates Doerr,
2014). As well, the stories behind the numbers are investigated further (Yates Doerr, 2014).
Studies on the stories behind the numbers seek to answer questions like are the number of
consumers buying the products using the product for its intended function, if not, why and what
factors led them to misuse the innovation (e.g. insecticide-treated mosquito nets used as a
wedding veil or fishing net in some BoP regions) (Yates Doerr, 2014). Thus business strategies
for post-market assessment ensures there is a combination of stories and statistics to get a full
understanding on the results of the business strategy and information required for knowledge
transfer for future business strategies.

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APPLICATION OF THE
SCIENCE AND TECHNOLOGICAL STUDIES FRAMEWORK
CASE STUDIES ON BOTTOM OF THE PYRAMID MARKET SUCCESS & FAILURE
Literature for BoP market is abundant in case studies analyzing private sector firms that have
succeeded and failed on their strategies utilized during the innovation process. After reviewing
the literature, an exemplar paper was chosen to apply the STS framework to provide a further
insight into the business strategies of the case studies discussed in the paper.
The paper chosen is Reinventing strategies for emerging markets: beyond the translational
model by researchers Ted London and Stuart Hart. This paper was published in the Journal of
International Business Studies in 2004. The paper is an explanatory analysis of successful and
unsuccessful business strategies to enter low-income markets in emerging economies by
multinational corporations.
London and Hart provide two case studies. First case detailing the failure of Monsanto at the
bottom of the pyramid; second case detailing the success of Unilever at the bottom of the
pyramid. The case study description from the London and Hart’s paper is included in Figure 9
(London & Hart, 2004).
Utilizing the STS framework, further explanatory analysis can be conducted on the case studies
by applying STS concepts to answer why Monsanto was unsuccessful while Unilever was
successful at the BoP (London & Hart, 2004).

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Figure 9: Monsanto and Unilever Case Studies – Source: Journal of International Business Studies
Case Study Analysis using STS Framework. Starting with Monsanto. Applying the STS
framework, it is evident that Monsanto’s business strategies aligned with the diffusion model.
While patenting seeds were the norm for genetic engineering in the context of developed
markets, Monsanto assumed incorrectly that this strategy is applicable for the local context of
emerging markets. Not accounting for the local social context and placing the end users, local
farmers at the end of the innovation process, Monsanto failed to incorporate the local cultural
tradition of the local farmers. The local cultural tradition is the farmer’s reliance on saved seeds
for next planting seasons (London & Hart, 2004). Also the stigma against Genetically modified
foods and Monsanto not developing socially responsible marketing strategies to raise
awareness and promote open dialogue led to high resistance and low acceptance for their

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innovations among the nongovernmental organizations and end users. The case study of
Monsanto illustrates the weakness of the inherent quality in the diffusion model of only focusing
on the technology itself and neglecting the social aspects surrounding the technology. Thus the
STS concepts of the diffusion model provide further explanation into why the business
strategies of Monsanto led to the firm’s failure in the BoP market.
In contrast, by applying the STS framework, it is evident that Unilever’s business strategies
aligned with the translation model. Unilever developed and implemented socially responsible
and locally reflexive distribution strategies. They did this by building local capacity (e.g.
supporting local entrepreneurs) and building partnerships with local partners to distribute their
products through local performers and village street theatres (London & Hart, 2004). Unilver
business strategies also placed significance in investigating the social context surrounding the
innovation itself. This is why they ensured their employees spend time living in these markets
and creating avenues for the end user to become an active agent embedded within their
innovation process. This allowed Unilever to incorporate and leverage local consumer insights
and preferences to develop and implement an innovation with high acceptance and low
resistance in the BoP market. Thus the STS concepts of the translation model provide further
explanation into why the business strategies of Unilever led to the firm’s failure in the BoP
market.

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CONCLUSION
The scholarly paper ‘s objectives were twofold …
1. To link insights from Science and Technology Studies (STS) with Business Strategy
Assessment for each innovation stage of a product/service targeted for the Bottom of the
Pyramid market
2. Provide private sector firms and social entreprenneurs with a practical framework to
assess past, current and future business strategies during the innovation process for low
income markets.
The methodology to develop this Science and Technology Studies Framework for Business
Strategy Assessment of Innovations for the Bottom of the Pyramid was to first conceptualize the
internal innovation process of a private sector firm. The author’s conceptualization of the stages
in an innovation process can be seen in Figure 5, page 19. Next, STS concepts on how to make
innovations work for the poor were critically examined. After investigating the STS concepts,
those deemed appropriate for a private sector firm’s internal innovation process was
reformulated into an overall framework for business strategy assessment at each innovation
stage (refer to Figure 6, page 23).
The framework utilizes a spectrum to assess the strength of the business strategy for each
stage of the innovation process based on two STS models: Diffusion and Translation. Those
business strategies for an innovation stage that aligns with a diffusion model is assessed to be
weak and those business strategies that align with a translation model is assessed to be strong.
The diffusion model is weaker compared to translation model based on the arguments
presented by STS scholars. The broad strokes from the argument from STS scholars is that the

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diffusion model results in high resistance and low acceptance from end users for the innovation.
In contrast, translation model is stronger because it leads to low resistance and high acceptance
from end users for the innovation. The finer explanation into this argument presented by the
STS scholars in provided on pages 24-28.
Finally, the practicality of the STS Framework for Business Strategy Assessment of Innovations
for the BoP was tested by applying it on a case study on two multinational corporations
operating at the Bottom of the Pyramid. Utilizing the STS framework, it was evident why one
company was unsuccessful while the other was successful at the BoP. The corporation that
failed in realizing return at the BoP implemented business strategies aligned under the diffusion
model. In contrast, the business strategies that align with the translation model was a driving
factor for the success of the other corporation.
Thus the value of the Science and Technology Studies Framework for Business Strategy
Assessment of Innovations for the Bottom of the Pyramid is that it provides a systematic
assessment tool to gain explanatory insights for predicting and reflecting on the effectiveness of
business strategies when developing and delivering innovations for the Bottom of the Pyramid
market segment.

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APPENDIX A
Graphs and tables from the Dansk Industri’s Industry report characterizing the bottom of the
pyramid market. (Working with the Bottom of the Pyramid: Success in Low-Income Markets,
2007).

Vijit
Sunder
–
Scholarly
Paper

42

Science & Technology Studies Framework for Bottom of the Pyramid Business Strategy Assessment_Vijit Sunder_MSc Global Health Scholarly Paper 2014

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