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The world's most exciting, fastest-growing new market is where you least expect it: at the bottom of the pyramid. Collectively, the world's billions of poor people have immense untapped buying power. They represent an enormous opportunity for companies who learn how to serve them.

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Prahalad, and his colleague Stuart L. Hart debuted a simple but radical idea. They argued that the 4 billion poor people around the world represented a vibrant consumer market, that this market could best be tapped with for-profit models, and that the poor themselves had to be partners in the process.

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Illustration by Marco Ventura With the end of the Cold War, the former Soviet Union and its allies, as well as China, India, and Latin America, opened their closed markets to foreign investment in a cascading fashion. Although this significant economic and social transformation has offered vast new growth opportunities for multinational corporations MNCsits promise has yet to be realized. To make matters worse, the Asian and Latin American financial crises have greatly diminished the attractiveness of emerging markets.

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Prahalad challenges business's common beliefs about the world's poor. This is the market companies should be paying attention to, he says, even more so than the few rarified consumers at the high-profit pinnacle, or even the growing middle markets. Prahalad demonstrates that the benefits of making products more affordable to the world's poor can provide investments to create real partnerships and innovations for established companies. One example of this applies to the village of Dharavi, India.

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The new model relies on profit-making businesses, especially multinational corporations MNCs. The MNCs have an economic incentive to tap the great market that exists, all but hidden, at the bottom of the economic pyramid. The professor of business administrations demonstrates clearly that it is possible to develop business models that allow the poorest of the poor to participate actively in their own economic development by becoming entrepreneurs.

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The seminal work by CK Prahalad, arguing the crucial role of multi-national corporations in alleviating poverty by treating the poor as consumers, has been one of the most influential tracts in recent years. Now, a vigorous attack has been mounted on its underlying assumptions and conclusions. Ross School of Business, University of Michigan, has produced a critical analysis that not only challenges some of the tenets of Prahalad's thinking - it savages them.

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Read, highlight, and take notes, across web, tablet, and phone. New Thinking; New Markets Prahalad challenges readers to stop thinking of the poor as victims and a burden to society. The University of Michigan business professor argues that if business leaders Read full review.

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Marketers around the world are discovering that there is a fortune to be made by targeting their efforts at the Bottom Billion or those who are near the lower end of the income pyramid. This means that they can market specific products and brands to these customers who traditionally were served by local brands and other products from the unorganized industry. The term Fortune at the Bottom of the Pyramid has been coined by the noted management expert and author, C K Prahalad, and describes the business opportunity that marketers have if they are smart enough to target this segment.

Bottom of the pyramid, also called the base of the pyramid, is a phrase in economics that refers to the poorest two-thirds of the economic human pyramid. Prahalad has some useful insights about consumer needs in poor societies and opportunities for the private sector to serve important public purposes while enhancing its own bottom line. Four consumer tiers: At the top of the pyramid are million affluent consumers. These are cosmopolitan groups composed of middle- and upper-income people in developed countries, and rich elites from the developing world they are tier one.


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