A Base-of-the-Pyramid Perspective on Poverty Alleviation
Since its initial articulation (Prahalad & Hammond, 2002; Prahalad & Hart, 2002),interest in a base (or bottom)-of-the-pyramid (BoP) perspective on business strategy and povertyalleviation has continued to grow. There have been several major conferences on the topic and agrowing number of authors and researchers are using the term BoP in their writings (Hart, 2005;Hart & Christensen, 2002; London & Hart, 2004; Prahalad, 2004; Rangan, Quelch, Herrero, &Barton, 2007). More importantly, interest in supporting the development of BoP ventures is alsooccurring in the field (see Table 1). These ideas are crossing sectors, as organizations in theprivate, non-profit, and development communities are interested in applying BoP ideas to theirnew initiatives (Gardetti, 2007).Interestingly, while much debate and most of the writings on this perspective havecentered around who is in the BoP (Hammond, Kramer, Katz, Tran, & Walker, 2007) and howBoP ventures need fundamentally new market entry strategies (Hart, 2005; Hart & London,2005), a deep exploration of the poverty alleviation implications has lagged (London, 2007b).What has not yet been fully articulated is how this perspective differs from other market-basedpoverty alleviation approaches, and thus, how its poverty alleviation outcomes may be different.Indeed, to give credence to the BoP perspective’s claim of having unique poverty alleviationimplications, we must explore the core components of this approach and understand how theydiffer from other market-based poverty reduction efforts (Walsh, Kress, & Beyerchen, 2005).As such, the purpose of this paper is to review the existing literature on the BoP andidentify a set of principles that distinguish the BoP perspective from other poverty alleviationapproaches. These principles also provide insight on when a BoP perspective is most effectiveand how it can complement other poverty reduction programs.