What is Bottom of the Pyramid?

Alleviating global poverty was identified as a top priority in the United Nations Millennium Development Goals.

BOP refers to a market-based model of economic development that promises to simultaneously alleviate widespread poverty while providing growth and profits for multinational corporations (MNCs).

Bottom of the pyramid (BOP), also called the base of the pyramid, is a phrase in economics that refers to the poorest two- thirds of the economic human pyramid.

Management scholar CK Prahalad in his book published in 2004 ‘The Fortune at the Bottom of the Pyramid’, has some useful insights about consumer needs in poor societies and opportunities for the private sector to serve important public purposes while enhancing its own bottom line.

More broadly, BOP refers to a market-based model of economic development that promises to simultaneously alleviate widespread poverty while providing growth and profits for multinational corporations (MNCs). This concept has been increasingly adopted by firms in different industries (e.g., household goods, energy).

Alleviating global poverty was identified as a top priority in the United Nations Millennium Development Goals.

Unlike traditional aid-based models of economic development, BOP approaches recast poverty as an economic opportunity for MNCs. The basic argument has three premises: (1) the world’s poor constitute massive growth opportunities and profit potential for MNCs, (2) MNCs should play a leading role in unlocking the economic potential of such difficult-to-access markets, and (3) bringing the poor into the global economy will simultaneously generate fortunes for MNCs while solving the problem of global poverty.

From the Book – ‘ Know Everything about Corporate Social Responsibility ‘

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