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Decision and Policy Analysis Research Area – DAPA

Eradicating Poverty through Profits: Remembering CK Prahalad

Few would disagree that the “go to” book for pro-poor social enterprise is, without a doubt, “The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits,” by CK Prahalad.  Coimbatore Krishnarao Prahalad, better known as C.K. Prahalad, was the pioneer of the Base of the Pyramid, a management strategy that merged business growth with development goals, and created a global movement for positively and profitably solving some of the most pressing social issues.  Earlier this month, this larger-than-life thinker passed away in San Diego, California, at 68, on April 16, not before creating a ripple effect that will continue to affect the lives of the poor worldwide.

C.K. Prahalad the father of the BOP strategy

Prahalad first introduced the BOP strategy in a publication with Stuart Hart in “Strategies for the Bottom of the Pyramid: Creating Sustainable Development”.  In the essay, Prahalad and Hart argued that the 4 billion people living on less than 3 dollars a day constituted a significant market demographic, the Base Of the (economic) Pyramid (BOP) whose needs were unserved by the global marketplace.  The pooled aggregate demand of this demographic, Prahalad suggested, could be profitably harnessed by private companies who could overcome their prejudices about BOP and consider them as potential consumers. Prahalad outlined that the global poor were

  • Virtually untapped markets opportunities. Private companies can make profit by selling to the poor.
  • had is no concurrence
  • had significant growth potential (both in population size and in income generation) The private sector can play a leading role in this process of selling to the poor

The BOP strategy is about integrating BOP into the formal market connecting profit to social value.

Most influential Business thinker

“I don’t like to think inside the box, I like to create my own box.”  –C.K Prahalad

Prahalad’s ideas of development through inclusive markets were an innovation and he was lionized in developing countries especially in his native India where his ideas have been successfully put into practice. He was also a reference to corporate philanthropists like Bill Gates and had a seat on the United Nations commission on private sector and development.

Apart from this, Prahalad was considered one of the world’s top 10 management thinkers for his work in corporate strategy and more recently in innovation. In 1987 he worked with Yves. Doz on the way multinational companies operate in the modern era (in The Multinational Mission). In the early 1990s he developed the now unexceptional concept of “core competencies” with Gary Hamel (in Competing for the Future, 1994). With Venkat Ramaswamy, in 2004, he explained how the new world of interconnected business was transforming the way companies had to deal with their customers, a process they called “co-creation” (in The future of Competition).

C.K. Literature

Publications often rated or ranked Prahalad among the top business gurus of our times, even as he traveled the world dispensing his unique brand of poverty and wealth wisdom.

“Strategic Intent” (1989) Harvard Business Review CK Prahalad and G. Hamel.

“The Core Competence of the Corporation” (1990) Harvard Business Review CK Prahalad and G. Hamel.

“Competing for the Future” (1996) CK Prahalad and G. Hamel.

“The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profit” (2004) CK Prahalad

“The Future of Competition” (2004) CK Prahalad and V. Ramaswamy

“The New Age of Innovation” (2008) C.K. Prahalad and M.S.Krishnan.

Additional thoughts and memorial posts about CK Prahalad can be found at:

Nextbillion.net

Financial times

New York times

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