[Solution]Base of the pyramid business models are the best solution to ensure the poor have their basic needs met discuss

Year by year our world is getting wealthy, however still around 4 billion people struggling in extreme poverty under 2dollar per day. Instead of just providing money…

Year by year our world
is getting wealthy, however still around 4 billion people struggling in extreme poverty under 2dollar per day. Instead of just
providing money or food for helping them, Dr.Prahalad found the new concept, it
is “base of the pyramid” business model which is “the 4-5 billion poor who are
unserved or underserved by the large organized private sector, including
firms.” (p.6 Prahalad, 2014)

Even though, it is
questionable whether the daily definition of income per capita it is not
important. (Ciravegna et al, 2014) The relevant aspect is that they are living in
impoverished circumstances and invisible to major markets and citizens in their
countries. (ibid) One of the reasons is their living quarters is an isolated
area from town. (ibid) Furthermore, regardless of BoP citizen’s purchasing
power is very low, they spend a higher price than average because of the
monopoly sellers. (ibid) Alas, the BoP often has no collateral and credit, thus
they had no bank account and credit card, only the way to borrow money is local
money lenders with unbelievable interest rate. (ibid)

From the above, BoP
has vast opportunity for innovative companies for solving many distortions.
This essay will compare with the traditional way to help impoverished citizen
and BoP business model, and how this business model works appropriately for
their needs. 

 BoP business models

Tradtional Approaches:

Tradtional Approaches
for helping the poor include many ideas from many different political
directions. One will often find the opinion that education and infrastructure
should be provided by the state and only the state. Many would inherently
distrust the idea that private companies are to involve themselves in a developmental
process, the connotation of corporate help for the poor carrying an inherent
suspicion of exploitation, at least to some. The central European and northern European
way of dealing with inequality through state intervention has a nuanced
history. There are many indicators that redistribution through taxation and
grants to the poor, as well as massive housing projects have worked for these
areas in cases. The suggestion that special BoP schemes can take the place
actual social welfare would be a laughable idea most Social Democrats from
central Europe.

There are of course
ideas as many as there are corns of sand on a beach when it comes to how
exactly Social equality and social welfare are to be generated. Communism might
only the most extreme answer to the age-old question of how to redistribute.
Less extreme measures include such ideas as income taxes, inheritance taxes and
other possession-based taxes. The other side to this type of action are things
that are meant to increase to wealth of poor people, such as food benefits of
some variety, housing projects, tax breaks and sometimes outright grants.
The post Base of the pyramid business models are the best solution to ensure the poor have their basic needs met discuss

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