Book Reviews On The Fortune At The Bottom Of The Pyramid

Otsuka Hikaru ITETHIC Book: The Fortune at the Bottom of the Pyramid Book Review: Chapter 1- The Market at the Bottom of the Pyramid Library Reference: N/A Internet Reference: N/A Learning Expectation: •

I expect to learn the meaning and the definition of the Bottom of the Pyramid.

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What are the classifications of a Market to be considered as a part of the bottom of the pyramid?

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In our country today, are there a lot of Markets at the bottom of the pyramid?

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How the company does approach the Markets at the bottom of the pyramid?

Quote: “All of us are prisoners of our own socialization. The lenses through which we perceive the world are colored by our own ideology, experiences, and established management practices. Each one of the groups that is focusing on poverty alleviation- the World Bank, rich countries providing aid, charitable organizations, national governments and the private sector- is conditioned by its own dominant logic. Let us, for example, examine the dominant logic of each group as it approaches the task of eradicating poverty. ”

Book Review: Bottom of the Pyramid, as I understand it, are those people who are in the lower middle class and lower class of life. To simply explain or elaborate the definition the meaning of the fortune at the bottom of the pyramid, an example popularly common to us is that of cellular phone’s sim card. We know that Sim cards, nine years ago, its regular selling price is about Php 1000.00 and above. No one in the lower middle class can afford to spend a thousand bucks for just a piece of a sim card. The monetary value of sim card deprecates as time goes by. It became as low as Php 30.00. Now all of us, in any sectors or classes of all life, have our own sim cards. When know that the pyramid is shape as a triangle. The upper part of the triangle has the smallest size. The upper part of the pyramid is the people in the upper class of life and the lowest or the bottom part of the pyramid are the people who are in the lower class. If we compare the population, sure we know that most of the people are classified as middle class and lower middle class and lower class. So if any business can accommodate those people, people who are at the bottom, the bigger the population they can have, and the larger the money they can get. For example, sim cards are about Php 1000.00 and the ones who can afford it are those who are at the top of the pyramid. Now it became Php 30.00, people at the bottom of the pyramid can also now afford it.

Integrative Questions: 1. Is there a fortune at the bottom of the pyramid? 2. What kinds of people belong to the bottom of the pyramid? 3. What are the benefits that company can get if they start to work at the bottom of the pyramid? 4. Is starting at the bottom of the pyramid is worth it? 5. How can a company start to work at the bottom if the pyramid? What I Have learned? • • •

I learned about the definition of the bottom of the pyramid I learned about the market development I have learned about the three A’s o Affordability o Access o Availability

Otsuka Hikaru ITETHIC Book: The Fortune at the Bottom of the Pyramid Book Review: Chapter 1- Products and Services for the BOP Library Reference: N/A Internet Reference: N/A Learning Expectation: •

I expect to learn the products being offered to those people at the bottom of the pyramid

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What are the services being offered to them?

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Are there any difference between the product and services offered to the markets at the bottom of the pyramid and those who are at the top of the pyramid?

Quote: “The BOP, as a market, will challenge the dominant logic of MNC managers. For example, the basic economics of the BOP market are based on small unit packages, low margin per unit, high volume, and high return in capital employed. This is different from large unit packs, high margin per unit, high volume, and reasonable return on capital employed. This shift in business economics is the first surprise to most managers.” “Involvement in BOP markets will challenge assumptions that managers in MNCs have developed over a long period of time. A new philosophy of product development and innovation that reflects the realities of BOP markets will be needed. This philosophy must represent a different perspective from those that we have grown accustomed to in serving Western markets.”

Book Review: There are twelve principle taken together to best describe what the markets at the bottom of the pyramid needed. These will explain and define us the code or standards of the products and services that company should offer to the bottom of the pyramid markets. The first principle of the Innovation for the BOP markets talk about products and services being offered to the BOP markets. It is said that the products and services being offered to them is not just about lower prices. Hybrid Solutions are also been mentioned in the principle of the Innovation for the BOP markets. But first, what is Hybrid? Hybrid is a combination of two existing product. Like any other consumers, BOP markets want also something new. Old products can’t solve their problems. There are standards that company should follow when rendering products and services to BOP markets. We should remember that prices, though a factor, style and features are also important.

Integrative Questions: 1. What is BOP?

2. 3. 4. 5.

What is Hybrid Solution? Does old technology helps solve the BOP markets problem? Is Hybrid Solution is what really the BOP markets needed? Is low price is the most important factor for the BOP market?

What I have learned? • •

I have learned about the standards of a product and services that should be offered to the BOP markets. I have learned the Philosophy for developing products and services for the BOP.

Otsuka Hikaru ITETHIC Book: The Fortune at the Bottom of the Pyramid Book Review: Chapter 1- BOP: A Global Opportunity Library Reference: N/A Internet Reference: N/A Learning Expectation: •

I expect to learn the Global Opportunity from BOP.

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What is the international opportunity?

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What is the local opportunity?

Quote: 1. Some BOP markets are large and attractive as stand- alone entities 2. Many local innovations can be leveraged across other BOP markets, creating global opportunity for local innovations. 3. Some innovations from the BOP markets will find applications in developed markets. 4. Lessons from the BOP markets can influence the management practices of global firms. Book Review: BOP stands for Bottom of the Pyramid. In the book, it is said that there are a lot of local growth opportunities. It is also said that the local BOP markets are very large. I do believe that most of the consumer classified themselves as BOP market. In innovation of product, it must be “value-oriented” from the consumer’s perspective. BOP is said to be focusing on objective and subjective perspective of the product and services. For me, in my own opinion, BOP markets are the one who can sustain and develop a company’s life. Since most of the markets group themselves as BOP or majority of the people or consumer belongs to bottom of the pyramid, making products and services that suits them can help your company. Integrative Questions: 1. 2. 3. 4. 5.

What are the two ways in engaging the BOP? What are the local growth opportunities? What does Capital Intensity means? BOP stands for? What are the standards of innovation for BOP?

What I have learned? •

I have learned about value-oriented innovation

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I have learned about the pros of being the BOP market I have also learned the opportunities of in BOP

Otsuka Hikaru ITETHIC Book: The Fortune at the Bottom of the Pyramid Book Review: Chapter 1- The Ecosystem for Wealth Creation Library Reference: N/A Internet Reference: N/A Learning Expectation: •

I expect to learn what ecosystem got to do with wealth creation?

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What is market oriented Ecosystem?

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How to build governance capabilities among the poor.

Quote: “A market-based ecosystem is a framework that allows private sector and social actors, often with different traditions and motivations, and of different sizes and areas of influence, to act together and create wealth in a symbiotic relationship. Such ecosystem consists of a wide variety of institutions coexisting and complementing each other.” “Historically the evolution of the large firm was a symptom of a maturing economy focused on system efficiencies through scale and scope.”

Book Review: Ecosystem, according to wikipedia, is a natural unit consisting of all plants, animals and micro-organisms in an area functioning together with all of the non-living physical factors of the environment. In the book, ecosystem is defined as a system which consists of a wide variety of institutions coexisting and completing each other. As we all know, ecosystem is like a chain, in every aspect or part of life has a duty to do to make the system works. The idea of ecosystem has been used to describe the market-oriented ecosystem. As the quote above says, a market-based ecosystem is a framework that allows private sector and social actors. In market-based ecosystem, these two acts together to create wealth and relationship, just like in ecosystem, which in all paths of life, everything has a part to play. Integrative Questions: 1. 2. 3. 4. 5.

What is ecosystem? What is a market-based ecosystem? What are the two sectors that a market-based ecosystem allows? What kind of relationship does the market-based ecosystem creates? Ecosystem in market-based consists of?

What I have learned?

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I have learned about market-oriented or market-based ecosystem I have learned and understand how they used the concept of ecosystem to define and explain the market.

Otsuka Hikaru ITETHIC Book: The Fortune at the Bottom of the Pyramid Book Review: Chapter 1- Reducing Corruption: Transaction Governance Capacity Library Reference: N/A Internet Reference: N/A Learning Expectation: •

I expect to learn and understand what the ways are so that we can reduce the Corruption in our society today.

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Are the poor really poor?

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What are the needs of the poor?

Quote: “Are the Poor Poor? Some basic assumptions have been at the core of the thinking on poverty reduction and developmental assistance during the past 30 years. • • • •

First, poor countries are poor because they lack resources. Aid was, therefore seen as a substitute for locally generated resources. Second, aid from rich countries to the governments of the poor countries for specific projects (typically infrastructure) would reduce poverty. Third, investments in education and health care might have the large multipliers per dollar of investment in economic development. Therefore, aid must be skewed to three sectors. The record of aid and loans from the various donor countries and the World Bank, International Monetary Fund, and other institutions is at best mixed. More recently, the development community is paying attention to the role of the private sector in building markets”

Book Review: Are the poor really poor? That is the question that I am eager to find out. We believe that we, the Filipinos, are poor. There is no job or work here, most of the people lives in squatter areas, out of school children are everywhere, and the like. We see this as signs that Philippines is one of the poorest countries around the globe. I do believe that we are poor in financial aspect since most of the leaders in our country are corrupt. They steal what was ought for us. But in terms of natural resources, we all must admit that the Philippines is one of the most gifted country. We have first class beaches, breath taking landmarks, etc. We have it all. We just don’t know how to make use of what we have. Most of the things or technology that we have are donated or have been done because of other powerful country’s help. For example, the US has been helping the Philippines ever since. We have this Fil-Am friendship day. The US, being one of the richest and powerful countries, has

given us the guide and support that we needed. But I do believe that Philippines can stand alone. It’s just that we are scared to and we are always under the wrong leader and manager. The poor isn’t totally poor. Poor maybe in a sense of one particular aspect, lack of knowledge is the most appropriate word to describe the country like ours. Integrative Questions: 1. 2. 3. 4. 5.

Are the poor poor? Is lack of resource can explain why the country is poor? How can poverty be reduced? Where country can the poor country asks for help? In what sectors does aid must be skewed?

What I have learned: • •

I have learned that poor country does not necessarily means that the country is not doing well in the financial aspect but lack of resource is the main reason. Financially, our country does not do well, but in terms of natural resources, we are rich.

Otsuka Hikaru ITETHIC Book: The Fortune at the Bottom of the Pyramid Book Review: Chapter 1- Development as Social Transformation Library Reference: N/A Internet Reference: N/A Learning Expectation: •

I expect to learn and understand what the ways are so that we can reduce the Corruption in our society today.

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Are the poor really poor?

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What are the needs of the poor?

Quote: “First, we demonstrated that the BOP—the poor—can be a market. Second, once we accept the BOP as a market, the only way to serve the market is to innovate. The BOP demands a range of innovations in products and services, business models and management processes. Third, these innovations must be accompanied by increased TGC, making the government accountable to the citizens and making it accessible and transparent. Market-based ecosystems can also facilitate the process of making transparency, access, and respect for commercial contracts a way of life.”

Book Review: The poor can be a market. Absolutely, poor people do also have needs and wants. They also have demands. Like any other people, BOP markets also wants to have something that is useful and something that can make them feel and look good. For example, the flip flops havaianas market are poor well of people. Price ranges from 700 to 1000 Pesos. Poor people can’t spend a thousand bucks for just a pair of slipper. So a new brand of flip flops was introduced. Havana, cheaper but the design is almost the same as havaianas. But Havana can’t be seen in Rustan’s department stores, it can be seen in markets, regular department store. The price is way to cheaper than Havaianas. From about 50-100 Pesos, you can have a nice looking pair of flip flops. In the book said, BOP demands for innovation of products and services. Have you noticed that if you compare the price of foot spa in classy salon to a street salon, prices are way too different? But the services are almost the same. Poor people or BOP needs also something that well off people experiences. That’s why almost all products and services that has been offered to the upper market has a substitute product and service for the lower market.

Integrative Question: 1. Can the BOP be a market? 2. Does innovation needed in the BOP market?

3. What does market-based ecosystem facilitates? 4. What does the BOP market demands for their product and services? 5. Who are the BOP markets? What I have learned? • •

I have learned that BOP can be a market. I have also learned that the products and services that we should offer in BOP market should be innovative.