Mnc and the Bottom of the Pyramid Essay

598 WordsMay 5, 20133 Pages
Multinationals and the Bottom of the Pyramid It is important for MNC to make investments at “the bottom of the pyramid”, which means lifting billions of people out of poverty and desperation, averting the social decay, political chaos, terrorism, and environmental meltdown that is certain to continue if the gap between rich and poor countries continues to widen. The articles argued that serving the poor is not only a noble endeavor, but also a lucrative one, because the Tier 4 of consumer contains the majority of population. It is also MNC’s responsibility to innovates their business models and helps improve the lives of the poor. From the chart of four consumer tiers, we can see the prodigious need in Tier 4. Even though they have the most majority of people, and they only get cheap and poor quality products. In order to change this situation, we have to reexamine the orthodoxies in regarding to poor people in developing countries. Each of these key assumptions obscures the value at the bottom of the pyramid. As Tier 4 represents a huge untapped market for profitable growth, MNC has made successful examples in stepping to this business field. In the article, Nirma created a new business system that included a new product formulation, low-cost manufacturing process, wide distribution network, special packaging for daily purchasing, and value pricing. All these strategies have definitely altered the traditional business model and enlightened the new strategies for the bottom of the pyramid. C.K. Prahalad and Stuart L. Hart mentioned several aspects, including price control through product development, manufacturing, distribution, focuses on quality through new delivery formats, and sustainability. I think it is very crucial for multinational to invest in R&D and save production cost. After understanding the practical need of their bottom pyramid, such as the

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