Jove
Visualize
Contact Us
JoVE
x logofacebook logolinkedin logoyoutube logo
ABOUT JoVE
OverviewLeadershipBlogJoVE Help Center
AUTHORS
Publishing ProcessEditorial BoardScope & PoliciesPeer ReviewFAQSubmit
LIBRARIANS
TestimonialsSubscriptionsAccessResourcesLibrary Advisory BoardFAQ
RESEARCH
JoVE JournalMethods CollectionsJoVE Encyclopedia of ExperimentsArchive
EDUCATION
JoVE CoreJoVE BusinessJoVE Science EducationJoVE Lab ManualFaculty Resource CenterFaculty Site
Terms & Conditions of Use
Privacy Policy
Policies

Related Experiment Videos

Serving the world's poor, profitably.

C K Prahalad1, Allen Hammond

  • 1University of Michigan Business School, Ann Arbor, USA.

Harvard Business Review
|September 14, 2002
PubMed
Summary
This summary is machine-generated.

Related Concept Videos

You might also read

Related Articles

Articles linked to this work by shared authors, journal, and citation graph.

Sort by
Same author

The responsible manager.

Harvard business review·2010
Same author

Cocreating business's new social compact.

Harvard business review·2007
Same author

The end of corporate imperialism.

Harvard business review·2003
Same author

The new meaning of quality in the information age.

Harvard business review·2000
Same author

Strategy as stretch and leverage.

Harvard business review·1993
Same author

Corporate imagination and expeditionary marketing.

Harvard business review·1991
Same journal

The Case for Capitation.

Harvard business review·2016
Same journal

How to Pay for Health Care.

Harvard business review·2016
Same journal

How to Preempt Team Conflict.

Harvard business review·2016
Same journal

The Secrets of Great Teamwork.

Harvard business review·2016
Same journal

Leading the Team You Inherit.

Harvard business review·2016
Same journal

Wicked Problem Solvers.

Harvard business review·2016
See all related articles

Multi-nationals can profit by serving the 4 billion people earning under $2,000 annually. Tapping into these emerging markets offers substantial revenue growth and cost reduction opportunities for global businesses.

Area of Science:

  • Business Strategy
  • International Development
  • Economics

Background:

  • Billions live on less than $2,000 annually, representing a largely untapped global market.
  • Traditional business assumptions about developing economies are often outdated.
  • Despite low individual incomes, aggregate purchasing power in poor communities is significant.

Purpose of the Study:

  • To present the business case for multinational corporations (MNCs) to invest in the world's poorest markets.
  • To demonstrate how MNCs can achieve profitability by serving the economic base of the pyramid.
  • To highlight the mutual benefits of stimulating commerce and development in low-income regions.

Main Methods:

  • Analysis of market potential in low-income populations.

Related Experiment Videos

  • Examination of pricing strategies and profit margins in developing markets.
  • Assessment of how new technologies mitigate barriers to entry.

    • Main Results:

    • Poor markets offer substantial aggregate buying power, even for non-essential goods.
    • Higher prices and margins are often found in low-income areas compared to middle-class ones.
    • Rapid revenue growth is achievable due to early-stage economic development.

    Conclusions:

    • MNCs can act in their self-interest to improve lives by serving the poorest populations.
    • Success requires creative thinking and challenging preconceptions about high-volume, low-margin business.
    • Investing in emerging markets offers significant rewards and contributes to global stability.