Wednesday, November 16, 2005

business at the bottom of the pyramid

rajesh jain posts on stuart hart's new book, 'capitalism at the crossroads'. here's an excerpt:

Unilever's Indian subsidiary, Hindustan Lever Limited (HLL), provides an interesting glimpse of the development of native capabilities in its efforts to pioneer new markets among the rural poor. HLL requires all employees in India to spend six weeks living in rural villages, actively seeks local consumer insights and preferences as it develops new products, and sources raw materials almost exclusively from local producers. The company also created an R&D center in rural India focused specifically on technology and product development to serve the needs of the poor. HLL uses a wide variety of local partners to distribute its products and also supports the efforts of these partners to build local capabilities. In addition, HLL provides opportunities and training to local entrepreneurs and actively experiments with new types of distribution, such as selling via local product demonstrations and village street theaters.

...Today more than half of HLL's revenues come from customers at the base of the economic pyramid....Even more important, through its new strategy, HLL has created tens of thousands of jobs, improved hygiene and quality of life, and become an accepted partner in development among the poor themselves.

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