BA612 BUSINESS STRATEGIES FOR THE BASE OF THE PYRAMID. Course Syllabus Fall B 2006

Transcription

1 BA612 BUSINESS STRATEGIES FOR THE BASE OF THE PYRAMID Course Syllabus Fall B 2006 Tuesday-Thursday, 12:40-2:10pm Three Friday Sessions (Nov. 17, Dec. 1 & Dec. 8), 9am-noon Room W2740 Prof. Ted London 3782 Wyly Hall tlondon@umich.edu

2 Summary Outline Part I: Setting the Stage Tuesday, October 31: Introduction and Course Logistics Readings: Helping the world s poor (Sachs) Serving the poor profitably (Prahalad & Hammond) Emerging market strategy (London & Hart) Discussion: Class background, introduction of topic and key issues, and overview of course design and requirements. Thursday, November 2: Challenges and Opportunities at the Base of the Pyramid Readings: Which World (pp & 22-25) (Hammond) Global sustainability (Hart & Milstein) Tomorrow s markets (WRI) (will be handed out in class) Discussion: Read and consider BoP implications of the two readings. Practice your competitive imagination skills by brainstorming commercial opportunities for each of the trends in Tomorrow s Markets. Part II: Business Strategies for the Base of the Pyramid: The Corporate Opportunity Tuesday, November 7: MNC Strategy I Development as freedom (Chapter 1, The Perspective of Freedom ) (Sen) W.R. Grace Co. and the Neemix Patent (A) Should Grace s patent on Neemix stand? What is biopiracy? Is Grace guilty of practicing it? Could Grace have avoided these problems with a different strategy? Thursday, November 9: MNC Strategy II The fortune at the bottom of the pyramid (Prahalad & Hart) Hindustan Lever at the Base of the Pyramid: Growth for the 21 st Century 2

3 What were Nirma s secrets to success at the BoP? Why is HLL pursuing Shakti? Is Shakti successful? Tuesday, November 14: MNC Strategy III Rethinking marketing programs for emerging markets (Dawar & Chattopadhyay) Expanding the Playing Field: Nike s World Shoe Project (A) What should Tom Hartge recommend to senior management regarding the World Shoe? What are the appropriate sales and profit goals for the World Shoe? What business model would be most appropriate and effective? Part III: Building a BoP Business Model Thursday, November 16: Putting the Last First Readings: Mystery of Capital (pp. 1-37, ) (DeSoto) Rural development (pp ) (Chambers) Connecting the Rural Poor to the World: Grameen s Village Phone in Bangladesh BoP Case Selection Due In which ways is Village Phone successful? What are the keys to its success? How could/should this enterprise be expanded in Bangladesh? Can Grameen s model be replicated in other countries? Friday, November 17 (9am-noon; 3 hour session): Bottom-Up Business Model Creation Reinventing strategies for emerging markets (London & Hart) CEMEX s Patrimonio Hoy: At the Tipping Point? Guest Speaker: Hector Ureta, Patrimonio Hoy initiative, CEMEX What is your assessment of CEMEX s Patrimonio Hoy initiative? 3

4 To what extent has Patrimonio Hoy built a capability in social embeddedness? Are there other issues that Patrimonio Hoy s managers should consider? Tuesday, November 21: Non-Profits at the BoP Partnerships for learning (London & Rondinelli) The great leap: Driving innovation from the BoP (Hart & Christensen) The Mountain Institute s Building Blocks Why is TMI interested in pursuing an income generating venture at the BoP? Is there a business opportunity to provide low cost, environmentally sustainable housing in the developing world? What strategy should TMI pursue? Tuesday, November 28: The BoP as Producers Creating local sustainable enterprise networks (Wheeler et al.) Developing native capability (Hart & London) Review the websites for CARE-Canada s CARE Enterprise Partners ( and Honey Care Africa ( Also take a look at and for sections on Honey Care and any other enterprises that interest you. Guest Speaker: Farouk Jiwa, CARE-Canada What role, if any, do international NGOs have in facilitating market linkages at the BoP between the producers/consumers and large companies? How can we ensure that BoP linkages are win-win propositions for the companies as well as the communities at the BoP? What conditions are necessary for a BoP linkage to become commercially viable and sustainable? Thursday, November 30: Mutual Value Creation A framework for assessing the impact of BoP enterprises on poverty alleviation (London & Christiansen) Scojo: Vision Entrepreneurs at the BoP 4

5 What are the key issues that Scojo should consider in exploring how best to scale in India? What are your recommendations to Scojo regarding these issues? What are the impacts of Scojo s current enterprise approaches on poverty alleviation? How should Scojo balance its goals of financial sustainability and societal impact? What could Scojo do to enhance its local poverty alleviation impacts? Friday, December 1 (9am-noon; 3 hour session): Capturing the Opportunity at the BoP Voices from the BoP (will be handed out in class) Guest Speaker: Vijay Sharma, Shakti Initiative, Unilever Shakti would like to work with a select set of partners to leverage its existing distribution network. What selection criteria should Shakti use to assess potential partners? o How can partnerships be selected that meet the goals of Shakti and HLL, the partner, and the local communities & entrepreneurs What structures or management processes can Shakti implement to ensure that its staff does not abuse its power and potential dominance over local enterpreneurs? From the perspective of those at the BoP, what are the impacts of Shakti s activities on poverty alleviation? o What metrics can Shakti use to measure its impacts? o What could Shakti do to enhance its poverty alleviation impacts? Part IV: Going Forward: Making the Case Tuesday, December 5: Managing Growth CARE USA: Making Markets Work for the Poor (will be handed out in class) Guest Speaker: Marcos Neto, CARE-Central America Why would CARE want to pursue a strategy for developing revenue generating enterprises (RGEs)? What skills and assets can CARE leverage? What are the biggest challenges the organization faces in institutionalizing this strategy? Should CARE pursue this? If so, what recommendations would you give CARE for implementing an RGE strategy? 5

6 Thursday, December 7: BoP Case presentations Friday, December 8 (9am-noon; 3 hour session): BoP Case presentations (con t) Tuesday, December 12: Summary and Conclusions Aid is not the answer (Prahalad) Discussion: Wrap-up; Moving forward/staying involved; New research; Evaluations Group Project Due 6

7 Reading List BA612 Business Strategies for the Base of the Pyramid Cases W.R. Grace Co. and the Neemix Patent (A) (UVA-E-0157) (Severance, Spiro & Ruffin, 1997, Darden Case Collection) Hindustan Lever at the Base of the Pyramid: Growth for the 21 st Century (Vakil & London, 2005, University of Michigan/William Davidson Institute Case) Expanding the Playing Field: Nike s World Shoe Project (A) (McDonald, London & Hart, 2002, World Resources Institute) Connecting the Rural Poor to the World: Grameen s Village Phone in Bangladesh (London & Garg, 2005, University of Michigan/William Davidson Institute Case) CEMEX s Patrimonio Hoy: At the Tipping Point? (London & Kotek, 2005, University of Michigan/William Davidson Institute Case) The Mountain Institute s Building Blocks (Buffington & London, 2004, University of Michigan/William Davidson Institute Case) Scojo: Vision Entrepreneurs at the Base of the Pyramid (Christiansen & London, 2006, University of Michigan/WDI Case) Voices from the BoP Case and Video (London, 2006, University of Michigan/William Davidson Institute Case)** CARE: Making Markets Work for the Poor (Reyes & London, 2006, University of Michigan/William Davidson Institute Case) Readings Sachs, J Helping the world s poor. The Economist, 14 August: Prahalad, C.K. and Hammond, A Serving the world s poor, profitably. Harvard Business Review, September: (reprint #R0209C). London, T. and Hart. S Emerging market strategy, World Business, October: 88. Doering, D Tomorrow s Markets: Global Trends and their Implications for Business. Washington, D.C.: World Resources Institute.** 7

8 Hammond, A Which world? Scenarios for the 21 st century. Washington, D.C.: Island Press. Hart, S. and Milstein, M Global sustainability and the creative destruction of industries Sloan Management Review, 41 (1): pp (reprint #4112) Sen, A The perspective of freedom. In: Amartya Sen, Development as Freedom, New York: First Anchor Books. Prahalad, C.K. and Hart, S The fortune at the bottom of the pyramid. Strategy+Business, 26: (reprint #02106) Dawar, N. and Chattopadhyay, A Rethinking marketing programs for emerging markets. Long Range Planning, 35 (5): de Soto, Hernando The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. New York: Basic Book. Chambers, R Practical action. In: Robert Chambers: Rural Development: Putting the First Last, Essex: Addison-Wesley Longman. London, T. and Hart, S Reinventing strategies for emerging markets: Beyond the transnational model. Journal of International Business Studies, 35 (5): London, T. and Rondinelli, D Partnerships for learning: Managing tensions in nonprofit organizations alliances with corporations. Stanford Social Innovation Review, 1 (3): Hart, S. and Christensen, C The great leap: Driving innovation from the base of the pyramid. Sloan Management Review, Fall: (reprint #4415). Wheeler, D. et al Creating sustainable local enterprise networks.. MIT Sloan Management, 47 (1): Hart, S. and London, T Developing native capability: What multinational corporations can learn from the base of the pyramid. Stanford Social Innovation Review, 3 (2): London. T. and Christiansen, M A framework for assessing the impact of Baseof-the-Pyramid enterprises on poverty alleviation. Working Paper.** Prahalad, C. K Aid is Not the Answer. The Wall Street Journal, 31 August. **Will be handed out in class 8