my pre - 8-2 Serving the World's Poor Profitably C.K...

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Unformatted text preview: 8-2 Serving the World's Poor, Profitably C.K. Prahalad and Allen HammondDoaa ThabitMGMT 654304/13/09Article SummaryThe author gave two scenarios of the world after 15 years, one bleakand the other is much brighter,saying that both are possible. The one that the author determined to come to pass is the MNE willingness to enter and invest in the world’s poorest markets.Article SummaryArticle SummaryUntapped PotentialInvesting in the developing world may lead to Successful business especially in the countries that have political reform, growing openness to investment, and development in the low-cost wireless communication network in view of the fact that :It is cheapto market and deliver products and services in these countries. Companies that operate in these areas will have access to millions of potential new customers, who together have billions of dollars to spend due to the increase in populationArticle SummaryUntapped PotentialWhen MNCs provide basic goods and servicesthat reduce costs to the poor and help to improvetheir standard of living - while generating anacceptable return on investment -the results willbenefit everyone. So what stops MNCs from investing in the world’spoor?Article SummaryUntapped PotentialFive misperceptionsbarrier MNE from investing in the world’s poor:The poor have no money.The poor are too concerned with fulfilling their basic needs to “waste” money on nonessential goods. The good sold in developing markets are incredibly cheap, thus ,there’s no room for a new competitor to come in and turn a profit. People in BOP (bottom-of the pyramid) cannot use advance technologies. The highly charged issue of exploitationof the poor by MNCs. Article SummaryUntapped PotentialPeople in BOP (bottom-of the pyramid) cannotuseadvance technologies. The highly charged issue of exploitationof thepoor by MNCs. Article SummaryBusiness CaseBusiness can gain 3 important advantages by serving the poor:1.A new source of revenue growth:BOP markets represent an opportunity for MNCs’ growth since:a)These markets are in the earliest stages of economicdevelopment, consequently growth can be extremely rapid....
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my pre - 8-2 Serving the World's Poor Profitably C.K...

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