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Innovation focused on the base of pyramid : the case of an African telecommunications company

Thesis (MBA (Business Management))--University of Stellenbosch, 2007. / AFRIKAANSE OPSOMMING: In vandag se besigheidswêreld bestaan twee teenoorgestelde pole. Aan die een kant is die wêreld se gevorderde markte wat reeds so oorbevolk geraak het, dat dubbelsyfergroei ‘n skaars verskynsel is. Ten spyte hiervan word aanhoudende druk
geplaas op senior bestuur om hulle besighede te groei teen koerse wat ‘n toename in
aandeelhouersbelang sal verseker.
Aan die ander kant is twee derdes van die wêreld se bevolking (4 Miljard mense), die
sogenaamde basis van die ekonomiese piramiede (BVP), wat in armoede lewe en
afgeskeep word in terme van noodsaaklike goedere en dienste, om nie eens te praat
van weelde artikels nie. In dié markte is dubbelsyfergroei nog behaalbaar en in meeste
gevalle is die enigste kompetisie die gevaar dat produkte nie verbruik word nie.
Dié navorsing kyk na hoe dié twee pole geïntegreer kan word sodat beide daaruit kan
voordeel trek.
Besighede kan volhoubare vlakke van groei bewerkstellig deur ewe veel aandag te
skenk aan volhoubare innovasies as ontwrigtende innovasies. Die klem wat gemaak
word in dié navorsingsverlsag is dat besighede dit nie kan bekostig om net op
volhoubare innovasies te fokus nie. Hulle moet ook in ontwrigtende innovasie strategieë
belê.
Die innovasie teorieë bepaal dat opkomende markte die beste plek is om ontwrigtende
innovasies te ontwikkel. Verskeie multi-nasionale maatskappye het al egter misluk om
die belowende massa-markte binne opkomende markte te penetreer. Die rede is dat
baie van hul globale strategieë mik na die ontwikkelde marksegmente binne-in daardie
ontwikkelende markte en nie op die massa-markte aan die BVP nie.
Om tegnologieë te ontwikkel vir die BVP verg plaaslike strategieë en, onder andere, ‘n
kwantum sprong in die prys-werkverrigting verhouding. In baie gevalle kan dit ‘n daling
in prys wees met soveel as ‘n faktor van tien. Indien suksesvol, bestaan die moontlik
dan om dié tegnologieë terug te vat om gevorderde markte te ontwrig. Daar is egter ook ‘n humanitêre sy van die saak. Elke jaar is armoede indirek verantwoordelik vir miljoene sterftes in Afrika en baie oorlewendes leef in haglike
omstandighede sonder noodsaaklike goedere en dienste, terwyl hulle uitgebuit word
deur ‘n paar informele besighede.
Die BVP bied aan die gevorderde ekonomieë van die wêreld nie net die geleentheid om
baie geld te maak nie, maar ook die geleentheid om op só ‘n manier besigheid te doen
dat dit arm mense kan help om ‘n inkomste te verdien of selfs inkomste te genereer. Dit
kan op baie verskillende maniere help om dié mense te lig vanuit armoede.
Dit wil voorkom asof besigheid en die moontlikheid om welvaart te skep die mees
effektiewe manier is om die BVP te lig vanuit armoede. Die BVP het egter die kennis,
verantwoordelike besigheids-sin en die onderhandelingskrag van multi-nasionale
besighede nodig om te verseker dat besigheid in dié markte op ‘n verantwoordlike,
volhoubare manier geskied. / ENGLISH ABSTRACT: In today’s world of business two opposite poles exist. On the one end is the world’s developed economy that has become saturated to such an extent that double digit
growth has become a scarcity. However despite this fact continuous pressure is being
placed on managers to grow their companies at a rate that will ensure an increase in
shareholder value.
On the other end are two thirds of the world’s population (4 billion people), the base of
the economic pyramid (BOP) that is desperately poor and underserved in terms of basic
needs, let alone luxury items. Double digit growth is achievable in these markets with
the only competition being non-consumption in many cases.
This research looks at how these two poles can be integrated into a mutually beneficial
relationship.
Companies could ensure sustaining levels of growth if there is an equal focus on
sustainable as well as disruptive innovations. The case made in this research report is
that companies cannot afford to focus on sustainable innovations alone, but need to
invest in disruptive innovations as well.
The innovation theories hold that the best place to test and develop disruptive
innovations is in emerging markets. However too many multinational corporations
(MNCs) have failed to access the illusive mass markets within emerging economies. It
seems that their strategies were focussed on the developed segments within those
emerging markets and not on the masses that constitute the BOP.
Developing technologies for the BOP requires a local strategy and, amongst other
things, a quantum leap in the price-performance ratio - in many cases a typical
reduction in price by a factor of ten. The possibility then exists to take these solutions
back to disrupt developed markets.
There is a human aspect to this scenario as well. Poverty has indirectly been a cause of
millions of people dying in Africa every year and many survivors live in poor conditions
without basic services and being exploited by few informal businesses.
The BOP offers an opportunity for the developed economies, not only to make a lot of
money, but also to innovate their products and business models to empower poor
people to start earning and generating income. This will in many ways help them to rise
from poverty.
It seems that growing business and generating wealth might be the most efficient
vehicle to help lift the BOP from poverty. However, the BOP needs MNCs to bring their
power and knowledge to these markets to ensure that it is done responsibly and in a sustainable manner.

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/792
Date12 1900
CreatorsVan Rooyen, Gert Willem
ContributorsVolschenk, Jako, University of Stellenbosch. Faculty of Economic and Management Sciences. Graduate School of Business.
PublisherStellenbosch : University of Stellenbosch
Source SetsSouth African National ETD Portal
Languageen_ZA
Detected LanguageUnknown
TypeThesis
RightsUniversity of Stellenbosch

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