Business at the Base of the Pyramid
Course Number 1908
Professor V. Kasturi "Kash" Rangan
Fall; Q1Q2; 3 credits
Senior Lecturer Michael Chu
Spring; Q3Q4; 3 credits
See video overview with Professor Kash Rangan
See video overview with Senior Lecturer Michael Chu
Through an analysis of 28 cases, selected readings, and discussions, the course will attempt to identify the principal challenges and opportunities in serving low income markets and the key factors that lead to business success or failure. It is estimated that roughly 4 billion on the world's 6.5 billion people work and live in such markets. The course will examine the conditions under which economic returns are compatible with the creation of social value, and vice versa. In the process, the course will seek to understand the viable models used by commercial and social enterprises to address the needs of those at the base of the socioeconomic pyramid and the key factors of success in these markets.
This is a General Management course aimed at potential managers, entrepreneurs and investment professionals who are interested in addressing the needs of low-income populations, especially in developing countries. The course seeks to provide an understanding of how business approaches can address low income markets that represent the largest components of developing economies, both in numbers of people as well as total income. The course materials explore the commercial viability of such markets, and looks at the impact of such commercial approaches on the social development of the populations involved, as well as the profits of the enterprise.
In the markets at the top of the socioeconomic pyramid, traditionally served by leading corporations, a global and "flatter" world has relentlessly increased the intensity of competition, and decreased profits. On the other hand, examples of enterprises focusing at the base of the pyramid capable of achieving both scale and commercial rates of return are beginning to be noticed by the business community. Meanwhile, the compatibility of financial viability and positive social change is a question being raised in economic and social development circles that is increasingly part of the political debate in developing nations.
Business at the Base-of- the-Pyramid (B-BOP) addresses these issues by examining enterprises that focus on serving low-income sectors from principally three perspectives: First we will look at business approaches to providing basic services, such as health, water and education. Here we will examine the role of commercial and social enterprise models in light of the end market need being pre-dominantly "social." The next perspective will be that of financial intermediation as a means to economic and social development. Here we will look at microfinance and impact investing. The third perspective will be from the vantage of large businesses which intentionally or otherwise engage in the needs of lower income segments. Here we will examine different models of corporate social responsibility. Roughly two-thirds of the cases in the course have commercial actors as the main protagonist, and the other third has social entrepreneurs as the key protagonists (including NGOs and government agencies as collaborators). The majority of the cases in the course are from Africa, Asia and Latin America, though we will spend at least a couple of sessions on the business models that attempt to serve the needs of low income citizens in developed economies.
Course Evaluation and Grading
50% of the grade will be based on class participation; 20 % on two short (500 word) written homework assignments; and 30% on a take home final exam.
This course is part of a portfolio of courses relevant to Social Enterprise. For a full listing, see the Social Enterprise Initiative website.