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Designing the Supply Chain for Success at the Bottom of the Pyramid
Author(s) -
Fawcett Stanley E.,
Waller Matthew A.
Publication year - 2015
Publication title -
journal of business logistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.611
H-Index - 79
eISSN - 2158-1592
pISSN - 0735-3766
DOI - 10.1111/jbl.12096
Subject(s) - bottom of the pyramid , business , leverage (statistics) , profitability index , supply chain , multinational corporation , industrial organization , marketing , standardization , profit (economics) , pyramid (geometry) , revenue , economics , finance , computer science , microeconomics , machine learning , operating system , physics , optics
The bottom of the pyramid—that is, the world's four billion consumers who live on $5 or less per day—is one of the last untapped markets for multinational companies (MNCs) to drive revenue and profit growth. However, most MNC s have found it difficult to make money “solving the pressing needs of low‐income communities.” We explore why the bottom of the pyramid has become a strategic focal point. We also identify and discuss fundamental differences and trade‐offs MNC s encounter in meeting the demands of the world's lowest‐income consumers. Drawing on the experience of exemplar case studies, we describe how MNC s can leverage resources to build the infrastructures needed to think differently about how to measure financial performance, design products differently to leverage both customization and standardization, and deliver differently to compensate for infrastructural deficiencies. Finally, given much of the product acceptance‐and‐profitability challenge falls under the purview of supply chain decision makers, we call for research in specific operational and relational domains to help companies design supply chain networks and processes for success at the bottom of the pyramid.