Contemporary issues in business Essay Example | Topics and Well Written Essays - 2000 words

Contemporary issues in business - Essay Example Countries with citizens who still have problems in meeting basic needs like food, clothing, and housing are an ideal testing ground for the comprehension of Bottom of Pyramid. The most challenging issue to this strategy is defining those people who are said to be at the base of the pyramid, as there are those who earn less than two dollars a day, and there are those who earn slightly higher than two dollars a day, but are still languishing in poverty. Many companies especially the multinational corporations invest on Bottom of Pyramid, so as to lift the lives of billions of people out of poverty and desperations that seem to continue, if the gap between the rich and the poor continues to widen. For example, the Unilever Company is one of the companies that have adopted the Bottom of Pyramid as a corporate strategy. Many CEOs have come to look at this strategy with a new lens (Prahalad, 2010). There is some evidence that can be used to prove that the innovations in the Bottom of the P yramid can and have resulted to profitable business. Business leaders, who have adopted the Bottom of Pyramid strategy, have started to re-examine and see the role of business in the society. This strategy has provided a platform for global innovations, which have a lot of implications in the world of business today. Therefore, though the Bottom of Pyramid has its own shortcomings, it is a very important strategy that most organizations can adopt (Prahalad, 2010). What is â€Å"Bottom of Pyramid?† There have been many discussions on the concept of ‘Bottom of Pyramid’ in business today and no precise definition has been put forward to define the concept. However, this concept was originally introduced â€Å"to draw attention to the 1-5 billion poor, who are unserved or underserved by the large organized private sector including multinational firms† (Prahalad, 2010, p. 6). The main aim of the Bottom of Pyramid is to ensure that the rich, who are the ones occ upying the top of the pyramid would be sensitized to help those who are less fortunate, and who are the majority occupying the base of the pyramid. Kazmi defines it as a strategy that "refers to exploiting the opportunities that are believed to be available in serving the poorer sections of the society and also serving social objectives† (2008, p. 207). Cited in Donohue, 2009. The above diagram is a representation of the rich occupying the top of the pyramid being the very few, and the poor occupying the base being the majority. In other words, it is a representation of how income in the world is distributed (Donohue, 2009). Thus, the Bottom of Pyramid refers to that population that leaves below the poverty line. How does the B.O.P Strategy Work? The term Bottom of Pyramid is said to be a relative term; it focuses on the strategies that companies can start to serve the populations, rather than un-serving and underserving them. When people say it is a relative term, it means th at, a person living at the Bottom Pyramid in China is different from someone living at the Bottom Pyramid in Somalia, though both are seen as living at the BOP, but in different contexts (Prahalad, 2010). This strategy also focuses on serving with approaches that are more profitable and relevant for application towards the bottom of the pyramid population. The debate on this issue will definitely continue before a very precise definitio