INCLUSIVE BUSINESS

Chapter one
Why?
Inclusive Business considers the global market as
segmented in different income tiers, piled up in a shape
of a pyramid. According to recent data published by the
IFC (2014) the BOP segment itself is internally diversified,
counting 3 billion people spending less than $3 a
day and 1.5 billion spending up to three times as such 3 .
Overall, the 4.5 billion people at the BOP spend $5
trillion in the aggregate but very small amounts individually.
As a consequence, Inclusive Business strategies
look at low single-unit prices counterbalanced by high
aggregate sales.
According to Guesalaga and Marshall (2008:417), the
BOP sector accounts on average for more of the 50% of
the purchasing power of low-income countries.
This massive amount of people has never been
reached by any attempt from private companies to
address their developmental needs because, due to
their poor finances, poor people could not guarantee
the minimum purchasing power to establish a valuable
commercial exchange of goods or services.
From an Inclusive Business perspective, this assumption
is reversed to transform a business constraint into a
business opportunity, looking at the poor as new potential
customers. What companies must do, therefore, is
to “look at globalization strategies through a new lens of
inclusive capitalism” 3a .
3. Combined total in 2005 purchasing power parity dollar terms for lowest and
low consumption segments in 92 counties. (IFC, 2014. Global consumption data
for Inclusive Business.)
3a. Prahalad C.K and Hart S. (2002), “The Fortune at the Bottom of the Pyramid”,
Strategy + Business Booz and Hamilton, 26, first quarter.
21