Bottom of the Pyramid (BOP) strategy in Organizations

Based on your own research and the theory from the first three topics from the module identify what is meant by a ‘Bottom of the Pyramid’ (BOP) strategy and discuss your understanding of both advantages and disadvantages for organisations adopting this strategy. Making Connections: Bringing theory and research together: Environment and culture, Globalisation, Diversity Question:

– You are expected to give a brief introduction explaining BOP – You are expected to use theory that links the first three topics of the module to your discussion. – You are expected to use research and current sources of reference to introduce examples that will support your conclusions. Word count 2000 words (+/- 10%)

Implementing New Strategies for Bottom of the Pyramid BOP Projects

One important concept to address in the strategy implementation process is the idea of innovations in creating new products to serve customers considered at the Bottom of the Pyramid (BOP). Olsen and Boxenbaum, as well as Epstein, discuss the unique challenges for these types of projects, and the barriers in organizational acceptance of required changes. These barriers to changes in strategy exist in BOP as well as other types of sustainability implementation strategies.

For this discussion:

Choose two of the barriers to implementation discussed in the unit readings, and apply them to the strategy implementation project you are studying.
Provide an example of how this barrier might be a challenge in the organization, and provide some practical solutions for removing this barrier in order to successfully implement a sustainable strategy.

There are two major barriers that firms encounter when implementing strategies for
innovative development of products that serve the Bottom of the Pyramid (BOP) customers. The
first challenge is conflicting mindsets. There are two types of mindsets that come into play when
considering the implementation of BOP as a strategy in an organization. These include the win-
win mindset and the tradeoff mindset. While the win-win mindset supports BOP as a strategy
from the point of view that it can increase shareholder value in the long run, the tradeoff mindset
among stakeholders oppose BOP strategies because it view such strategy as additional cost that
minimizes profit (Olsen & Boxenbaum, 2009). The second most significant barrier is the
resistance to change in routine. The implementation of BOP strategies requires radical changes to
the organization’s routines. This change is often resisted and hence forms a significant barrier to
BOP.
There are several ways through which the organization can overcome the barriers listed
above. The mindset barrier is associated with the mentality of the people. The major solution to
this barrier would be having the people analyze this strategy and be able to visualize how it
relates with the organization’s pursuit for profit (Gebauer, Haldimann & Saul, 2017). This in-
depth analysis of the strategy will enable all the stakeholders to understand and hence change
their mindset from a tradeoff mindset to a win-win mindset. Secondly, resistance to change in
routines will be overcome by fostering new knowledge. This new knowledge can be achieved
through observing other organizations that have effectively implemented BOP. This will ensure
that the stakeholders and employees in particular are able to appreciate the new processes that
are associated with implementing a BOP strategy (Gebauer, Haldimann & Saul, 2017). Overall,
solutions will be effective in overcoming the barrier of implementing BOP in the organization.

Strategies that enable companies to provide affordable goods and services to low income
earners also known as the bottom of the pyramid (BOP) is consistently gaining traction in the
recent times. However, these BOP strategies have greatly encountered barriers. The two major
barriers that the project faces include the barrier presented by the project evaluation criteria as
well as barriers presented by the required radical change in routine. To begin with, the Net
Present Value is a critical evaluation criterion for a new project and strategy such as the BOP
strategy. This criterion seeks to determine the potential benefit that a firm is likely to obtain from
the project. In the BOP project, the findings of the net present value evaluation criteria failed to
demonstrate any financial viability of BOP strategies (Olsen & Boxenbaum, 2009). This then
presented a barrier in its implementation. The barrier of radical routine change will arise from the
uncertainties of implementing radical changes in the process of operation for this organization
(Olsen & Boxenbaum, 2009). In the project, this barrier will derail the commitment and support
of all stakeholders.
The project can overcome these barriers through several initiatives. First, the barrier
presented by Net Present Value Criteria of evaluation can be overcome by considering the
evaluation criteria from different perspectives. Rather than concentrate on NPV as a criterion of
evaluation the organization should have a wholesome consideration taking into account other
criteria of evaluation such as business risk evaluation. Considering the evaluation from different
perspectives while demonstrate an overall financial benefit for the organization in the
implementation of BOP (Gebauer, Haldimann, & Saul, 2017). In overcoming the barrier of
radical routine change, the organization can consider fostering new information and knowledge
within the organization such information should include information about the proposed new process (Gebauer, Haldimann, & Saul, 2017). This knowledge will enable people to be
comfortable with the change being proposed.

References

Gebauer, H., Haldimann, M., & Saul, C. J. (2017). Business model innovations for overcoming
barriers in the base-of-the-pyramid market. Industry and Innovation, 24(5), 543-568. 
Olsen, M., & Boxenbaum, E. (2009). Bottom-of-the-Pyramid: Organizational Barriers to
Implementation. California Management Review, 51(4), 100-125.

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