INCLUSIVE BUSINESS

DeLab
Managerial innovations
Together with great potentialities, low-income markets
are also characterized by structural constraints such as:
limited market information, inadequate physical infrastructures,
missing knowledge and skills and restricted
access to capital (UNEP, 2008) 16 . In view of that, Inclusive
Business is called on to be innovative, for example
by building local capacity, co-inventing customized
solutions and developing relationships with non-traditional
partners (London and Hart, 2004). As argued by
Prahalad and Hammond (2002:8) 17 innovation is mandatory
in order to ensure affordability within a sector whose
economy is based on single unit packages, low margin
per unit and high aggregate sales. This cannot be done
by selling the cheap version of goods used in advanced
economies, but by innovating management strategies in
order to tailor goods to the socio-infrastructural features
of low-income sectors.
From a theoretical standpoint, Viswanathan and
Sridharan (2012) 18 argue that traditional product development
needs to abandon its traditional roots in formal,
advanced market contexts so to get closer to the BOP
contexts. The latter, with their specific features such
as intensity, corruption, poor infrastructures require a
completely different approach to product development.
Weidner et al. (2010) add that it is important to focus on
different metrics, avoiding to concentrate on margins
and focusing on single unit sales. Moreover, tapping
into diverse disciplines, as suggested by Chakravarty
(2006) 19 with regard to consumer psychology, helps
learning how to see market barriers from a different
perspective.
16. UNEP (2008), Creating value for all strategies for doing business with the
poor, UNEP/United Nations Environmental Programme.
17. London T. and Hart S. (2004), “Reinventing strategies for emerging markets:
beyond the transnational model”, Jornal of International Business Studie, 1-21.
18. Prahalad C.K and Hammond A. (2002), “Serving the World’s Poor, Profitably”,
Harvard Business Review, R02209C, 4-11.
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