Bottom of the pyramid

Bottom of the pyramid - Social Entrepreneurship and BOP...

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Social Entrepreneurship and BOP Harlin Patel September 21, 2010
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Social Entrepreneurship Social entrepreneurship is an entrepreneurial activity with an embedded social purpose (Austin, Stevenson, & Wei-Skillern, 2006). In simpler terms, it is a collusion of social activities with a business activity. Normally, such type of entrepreneurship is seen in developing or under-developed countries where the government does not have sufficient finances to address the basic needs of society. However, this phenomenon can be seen in developed nations as well, for example, a survey in 2005 concluded that around 1.2 million people in UK are social entrepreneurs (Global Entrepreneurship Monitor 2005), and this constitutes 3.2% of working age population. Although, such businesses are started at a very small scale, but entrepreneurs often target universal social issues which are common with local societies. As a result, they have a global prospective of their business and an opportunity to extend it beyond their local country’s boundaries. Few common examples of such businesses include access to clean water, promoting establishment of small businesses and waste management projects. Companies are mostly faced by the dilemma of choosing vaue creation or value appropriation. A company focusing on value appropriation would not invest on activities to improve the current standards of social services being offered, whereas a company focusing on value creation would be independent of value appropriation thinking and thereby, look to provide better quality of social services to the people.
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Bottom of Pyramid The bottom of the pyramid approach seeks to reduce urban poverty by empowering economically and socially, and providing goods and services to all.
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According to a World Bank Report, more than 3 billion people live on less than $2.50 a day.
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From the chart above, it can be deduced that the global BOP market consists of a population of 4.5 billion people who have incomes up to $3,000 per capita per annum. To add to it, the population trend is moving towards urbanization, thus, there is a need to formulate strategies in order to ensure that the growing poverty in urban areas have access to essential goods and services for to get a decent living. One of the most successful social entrepreneurship and a perfect example of Bottom of the pyramid approach is offering of “microcredit” loan facility to Bangladeshi women. This provided them an opportunity to start off lower-scale businesses, thereby earning profit and help their husbands in earning a good household living. This was an initiative to eradicate poverty by engaging in commercial activity with the BOP. According to a report, Procter & Gamble, in collaboration with small-sized stores, has
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This note was uploaded on 12/25/2010 for the course DEPTT. 2339485 taught by Professor J.khowel during the Spring '10 term at twsu.edu.

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Bottom of the pyramid - Social Entrepreneurship and BOP...

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