Bottom of the pyramid markets as sources for radical innovation

///Bottom of the pyramid markets as sources for radical innovation

Bottom of the pyramid markets as sources for radical innovation

Bottom of the pyramid (BOP) markets offer individuals and firms opportunities to develop and deploy radical innovations, argues C.K. Prahalad in this article on innovation. Prahalad argues that managers that focus on creating awareness (tell what’s available and how to use it), access (make something available for rural individuals), affordability (make world-class quality–not luxury–available at 1/50 of a typical cost basis), and availability (ensure uninterrupted supply)–the four As–create the seedbed for radical innovation.

Prahalad uses the development of a better biomass stove as an example of radical innovation. Prahalad led a team of product developers. It took two years of research and prototyping to develop the biomass stove they made available in rural India.

As part of its research, the team found that women in rural India used a biomass stove that produced acrid smoke so that the pollution inside their house was higher than outside. To understand their consumer, the biomass used video-ethnography to document what people said they wanted and how they actually cooked. Additionally, created a success network–which Prahalad calls an ecosystem–comprised of the Indian Institute of Science, collaborated with several NGOs, and relied on a BP manufacturing team to manufacture the stoves. Finally, the team challenged itself to:

1) Build a modern smokeless easy-to-use biomass stove;

2) Build a product that meets global safety standards;

3) Build a business that’s scaleable; and

4) Make the product affordable.

The team was successful. And from this development process here’s what the team learned about developing BOP-market-products:

1) BOP markets are diverse and, thus, there is not one universal BOP solution. These solutions are specific to industry and region and locality.

2) Of the four “As”, “affordability” challenges the innovator the most. Developing affordable products is not easy.

3) Innovation must start with a deep immersion in people’s lives to gain unique insights and break-throughs. This immersion allows innovators to develop a set of constraints that ultimately helps ensure success.

4) Innovation is not about product, it’s about developing a network that enables a new product/new business to function and thrive.

Suggested reading: The Fortune at the Bottom of the Pyramid

Photo credit: grillingearstudio

By | 2012-08-30T15:08:08-05:00 August 30th, 2012|Bottom of the Pyramid, Innovation|0 Comments

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