The International Finance Corporation (IFC) and the Financial Times (FT) recently published the results of their second annual essay contest about the role of the private sector in international development. Under the theme of “Private Sector Development: Creating Markets, Transforming Lives”, there were some 750 submissions from 90 countries.
This year’s top prize of US$ 20’000 goes to Christian Seelos, Director of the platform for strategy and sustainability at IESE business school for the essay titled Corporate Strategy and Market Creation in the Context of Deep Poverty.
The abstract reads as follows:
“Recent research on business models that target the ‘Bottom of the Pyramid’ (BOP), the vast untapped potential market made up of the world’s poorest people, has emphasized the need for multinationals to radically change their approach and to fundamentally rethink every step in their supply chains. Companies are advised to build new resources and capabilities, to implement multiple strategies concomitantly, and to partner with multiple constituencies that often have different strategic objectives. The complexities and potential costs involved in these recommendations, we believe, constitute severe hurdles to executive decision making and to realizing the financial returns that would justify such investments.
This paper develops a strategic perspective based on observation and analysis of two successful, alternative BOP models. Our strategic framework is complementary to current recommendations and scales down many of the implementation hurdles. The cases demonstrate how companies can leverage their existing corporate capabilities to provide scale to proven and already existing organizations at the BOP, and we illustrate how this approach can provide a platform for building the commercial enterprise that creates necessary financial returns. Our analysis is grounded in and reflects important insights from business strategy research, in particular the resource based view (RBV) and recent work on strategic alliances. The unique context of these business models characterized by deep and widespread poverty expands our understanding of how strategic factors can be configured to create value.”
More information:
- IFC-FT Essay Competition website (includes links to the silver and bronze prize essays)
- Watch a video interview (4:30 minutes) with Christian Seelos
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