This growth can be achieved by adopting innovative strategies that benefit local communities, reports say. The reports presented examples of successful BOP business ventures based on a year-long survey – drawn from consultation with over 150 business leaders and stakeholders, and a review of over 200 case studies. The reports were developed by the WEF in partnership with The Boston Consulting Group and with support from the Bill & Melinda Gates Foundation.
A report, entitled The Next Billions: Unleashing Business Potential in Untapped Markets, outlines business strategies for effectively engaging the BOP across all industry sectors, noting the potential of a market that has seen 8% growth rates in recent years. The other, entitled The Next Billions: Business Strategies to Enhance Food Value Chains and Empower the Poor, focuses on business models along the food value chain – from agricultural production through food processing, retailing and consumption.
The food value chains provide the main source of economic activity for 70% of the BOP, and capture the majority of spending (over US$ 1.3 trillion per year on food). Innovative companies are finding new strategies to engage the BOP in their value chains – providing much-needed income and food security to poor communities. BT, Cisco and OneWorld developed a telecom- and Internet-based information service for farmers, Lifelines India, which has increased participating farmers' productivity by 20-30%.
The reports further said, "Innovative companies are adopting new mindset to effectively serve and engage the BOP as consumers, producers and entrepreneurs, which finally raise the standard of living in developing countries. Companies can tap these opportunities by adopting new strategies to discover hidden value and new business partners at the BOP. For example, the telecom sector has developed technologies that lower unit costs and enable service provision in remote areas, applications that provide cash transfer or information services to BOP customers, and sales strategies that expand usage in partnership with local entrepreneurs."
The WEF reports quoted Vittorio Colao, Chief Executive Officer of Vodafone, saying, "By developing new products and applications suitable for lower-income customers, we have secured our position in increasingly competitive emerging markets. And more importantly, we're providing an essential service that improves the livelihoods and lifestyles of the poorer members of society."
According to reports, BOP markets present unique challenges; and to overcome those challenges, companies can enter into new alliances with other industries or stakeholders.
