POST GRADUATE PROGRAMME IN MANAGEMENT

AY 2022-23 TERM: V

TITLE OF THE ELECTIVE/WORKSHOP: STRATEGIC INNOVATION FOR THE BOTTOM OF THE PYRAMID
CREDITS: 2 NO. OF SECTIONS: 2 (at max)

Name of the Faculty Faculty Block/ Email Telephone Number

Room No.
Dr. Shounak Roy Chowdhury shounakc@iima.ac.in +91-9953949723

CONSULTATION TIME FOR STUDENTS

Name of the Faculty Timing
Dr. Shounak Roy Chowdhury By email – 24x7.

COURSE DESCRIPTION
At the turn of the century, in 2002, the late Management Guru - C.K. Prahalad (or CK)- championed an idea
that established firms could profitably engage the poor. He termed this segment – ‘Bottom of the Pyramid,
(BOP). He conjectured that such an engagement would benefit both the firms and the consumers. The firms
would get access to a traditionally untapped premium1 customer segment and the consumers would get
better products. By 2010, the concept prompted most large firms in India to undertake efforts to tap the
BOP; these ventures were often projected as the key to the firm’s future. However, ten years on, very few
established firms talk about such ventures. Between 2014 and 2016, most firms either gave their BOP
ventures a quiet burial or silently moved them away from the limelight. Clearly, lack of progress dampened
their enthusiasm to engage the segment. Did CK predict wrong? No! The success of OYO, Bandhan Bank
and Paytm/ Phone-pe are testimony to the fact that fortune can be created by tapping the BOP.
In 2016, I had quit academia to create Banyan Edu-Services and to craft my own success story with the BOP.
Starting as a Skill-Knowledge Partner, with AISECT Skill Mission Society, my intervention lay in providing
(vocational) education to those who could not afford college education. I saw the venture as a testing
ground for the working hypotheses that I had developed during my thesis at IIM-Ahmedabad and from
interpreting the progress of BOP ventures. So, my venture avoided government grants/ donations. The
emphasis lay on creating a ‘win-win’ model, as proposed by CK. The intervention led to the creation of an
annual business portfolio of over Rs 75 Crore in vocational education, for my collaborating educational
partner – AISECT Skill Mission Society. Although this collaboration continues, now I seek to expand the
engagement level under Banyan Edu-Services.

This exploration-driven course seeks to equip the participants for creating a blue-print for successful BOP
engagement. In the absence of developed academic literature, three sources form the basis for the working

1
In terms of the price they are willing to pay for the functionality/ services they consume
hypothesis and thumb-rules for creating the blueprint. These sources comprise of – (1) my experience of
working with the BOP, through Banyan Edu-Services; (2) my experience of consulting businesses on BOP
engagement, and (3) retrospective sense-making on the BOP ventures of other firms, based on their annual
reports and secondary data.
COURSE OBJECTIVES
1. Enable participants to understand the various factors involved in BOP venturing.
2. Enable participants to understand the role of value-chain innovations in successful BOP venturing.
3. Based on #1 and #2, enable participants to formulate and understand BOP venturing strategy.
PEDAGOGY/TEACHING METHOD:
The case is exploratory in nature. The focus lies on providing participants with inputs on the various
(theoretical) views and counterviews on this theme; this is followed by case discussions. Further, rather
than provide one case for the case discussions, the participants are given leading articles/ documents/ cases
based on which they can search and form their views. Additionally, participants (as part of their assignment)
need to analyze a BOP venture over a period of at least 15 years. Towards the end of the course, all these
views and inputs are collated to create a blueprint on successful BOP interventions
PRE-REQUISITE FOR COURSE, IF ANY:
1. Basic understanding of emergent strategy making (Strategic Management)
2. Basic understanding of selling (Marketing Management)
3. Basic understanding of value-chain & innovation (Operations Management); and
4. Organizing (Organizational Design)

IF DOUBLE SECTION, ATTENDANCE IN SISTER SECTION: ALLOWED/NOT ALLOWED

EVALUATION
Individual Component Group Component Weightage
BOP FORAY ANALYSIS 30%
CLASS PARTICIPATION 20%
END TERM 50%
Total 100%

ACADEMIC DISHONESTY
IIM Indore believes in Academic honesty. Academic dishonesty or misconduct is cheating that relates to an
academic activity. It is a violation of trust between the Institute and its stakeholders. Plagiarism, fabrication,
deception, cheating and sabotage are examples of unacceptable academic conduct. Please consult the
Programme manual for the section on academic dishonesty.

SCHEDULE OF SESSIONS
MODULE I: BOP INTERVENTIONS, MASS MARKETS & POVERTY
Module Objective:
CK’s conceptualization has two major points of contention. First, he does not explicitly distinguish between
BOP and mass markets. Consequently, researchers have argued that there is no need for studying these
interventions separately. Second, he stretches the argument of win-win to propose that BOP interventions
could alleviate poverty. This module explores all the associated lines of arguments and creates the
framework for the course by – (1) underscoring that BOP markets and mass-markets differ, and therefore,
warrants separate enquiry; and (2) concluding that the linking BOP interventions to poverty alleviation
involves an over-stretch.
SESSION 1 FORTUNE VERSUS MIS-FORTUNE AT THE BOTTOM OF THE PYRAMID
Objective: Establish the theoretical underpinnings in both the arguments for and against the
premise that tapping the BOP could lead to ‘doing well by doing good’
Reading: Prahalad, C. K., & Hart, S. L. (2002). Strategy+ business. The Fortune at the Bottom
of the Pyramid, 26, 2-14.
Karnani, A. (2006). Misfortune at the Bottom of the Pyramid. Greener Management
International, (51).
SESSION 2 BOP AND INCLUSIVE CAPITALISM
Objective: Understand the concept of inclusive capitalism, and how BOP could potentially help
in poverty reduction.
Reading: Mashelkar, R. A., & Prahalad, C. K. (2010). Innovation’s Holy Grail. Harvard
Business Review, 132-141.
Hart, S. L. (2010). Capitalism at the crossroads: Next generation business strategies
for a post-crisis world. FT Press.
Case: Grameen Bank (McMillan & Hanley, 2003)
SESSION 3 REDEFINING THE SCOPE OF BOP
Objective: In 2019, Deepa (CK’s daughter) revisits the premise of BOP. This article forms the
basis for re-assessing two key CK’s assertions – (1) the ‘economic logic’ on how to
profit from the BOP, and (2) distinction of BOP market from ‘mass markets’
Reading: Prahalad, D. (2019). The new fortune at the bottom of the pyramid. Strategy+
Business, 94, 1-13.

MODULE II: CONSTRAINTS FIRMS FACE IN BOP VENTURING

Module Objective:
This module explores the various factors that restricts the effectiveness of BOP interventions. More
specifically, this module highlights the roles of value-chain flexibility and linking of the production-
consumption value-chains in BOP success. We anchor our discussion around Hindustan Unilever’s (HUL)
Project Shakti. Shakti was a ‘text book’ example of undertaking effective BOP forays and one of the
inspiration for CK’s premise. After nearly a decade of experimentation, HUL demoted Shakti from being the
firm’s growth driver of the future to a Corporate Social Responsibility (CSR) activity. The two subsequent
cases, on ICICI Bank’s Micro lending and evolution of Tata Kisan Sansar, test the robustness of the ‘working
hypotheses’ developed in the discussion on Shakti. The three ventures also highlight the three different
methods of BOP foray – direct channel (HUL), agent-assisted (ICICI Bank) and franchise (TKS). All the
methods have their share of pros and cons. This module also identifies these pros and cons.
SESSION 4 RETAIL INTERVENTIONS # 1: PROJECT SHAKTI – A FAILURE OR SUCCESS?
Objective: Between 2005 and 2009, Shakti was pitched as a potential growth engine. It was
supposed to be a perfect example on how to under BOP intervention; an
intervention that inspired CK. Yet, by 2015, Shakti quietly moved out of HUL’s
press releases. The team was reassigned, and Shakti continued as part of a social
outreach. These sessions seek to understand what went wrong strategically,
despite obtaining a fair degree of venturing success. The participants need to
comment on: Did Project Shakti manage to achieve any strategic outcome or was
it a waste of effort?

Reading: Govindarajan, V., Vijay Govindarajan, M. B. A., & Trimble, C. (2005). Ten rules
for strategic innovators: From idea to execution. Harvard Business Press.
Project Shakti (Hindustan Unilever Limited, 2005)
Empowering 5 million women (India CSR Network, 2019)
Thekkudan, J., & Tandon, R. (2009). Women's livelihoods, global markets and
citizenship. IDS Working Papers, 2009(336), 01-36.
Case: Rangan, V.K. & Rajan, R. (2005). Unilever in India: Hindustan Lever's Project Shakti-
-Marketing FMCG to the Rural Consumer. HBSP Classics
SESSION 5 RETAIL INTERVENTIONS # 2: TATA KISAN SANSAR - THE CHALLENGE WITHIN
Objective: Launched in 2003 as a venture of Tata Chemicals, Tata Kisan Sansar (TKS) sought
to mend the inherent distribution challenges of small farmers getting access to
quality farming products, on time. This venture is interesting because the venture,
despite a fair degree of success, could not find a ‘fit’ within the larger Tata Group.
Eventually, TKS was reduced to a network of retail channels. This case needs to be
juxta-posed with Shakti. While Shakti received top management support but little
external environmental support, TKS was just the opposite. The participants need
to comment on: Did TKS manage to achieve any strategic outcome or was it a
waste of effort?

Reading: Govindarajan, V., Vijay Govindarajan, M. B. A., & Trimble, C. (2005). Ten rules for
strategic innovators: From idea to execution. Harvard Business Press.
Talwar, V., Mastakar, N., & Bowonder, B. (2005). ICT platforms for enhancing
agricultural productivity: the case study of Tata Kisan Kendra. International Journal
of Services Technology and Management, 6(3-5), 437-448.
Tatas Consolidate Agri Services Line (Business Standard, 2013)
Tata Chemicals launches Tata Kisan Sansar (Tata Chemical Limited, 2002)

SESSION 6 FINANCIAL INCLUSION & MICROFINANCE FOR BOP

 Objective: ICICI Bank’s microfinance lending business was a smart way of ‘profiting’ from
regulatory compliances. Although the aggressiveness of the venture was lost with
the departure of Dr. Nachiket Mor, the product survives as a ‘pass-through
certificate’ partnership program. We focus on understanding – (1) what were the
factors that enabled the evolution of a successful program, and (2) how and why did
ICICI succeed with much lesser efforts than HUL?
This venture has another interesting feature of a partner (Bandhan) upstaging its
larger partner (ICICI). Notably, Bandhan had started its journey as a lending
intermediary (or banking correspondent) to scheduled banks (including ICICI Bank)
We explore the factors that make this upstaging possible.
Reading: RBI Report (2018) Priority Sector Lending.
Source: https://m.rbi.org.in/scripts/BS_ViewMasDirections.aspx?id=11959 ,
accessed on June 28, 2021.
Kale (2014). A Shaky Vision for Financial Inclusion.
Source: https://www.livemint.com/Opinion/VPzOA6NoPIXCynO9smJBiL/A-failed-
attempt-at-financial-inclusion.html, accessed on June 28, 2021.
RBI Report (2014). Financial Inclusion by Extension of Banking Services.
Source: https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8955&Mode=0,
accessed on June 28, 2021.

Case: IFMR Case Study (2005): ICICI Bank – Innovations in Microfinance.

SESSION 7 THE PIT-FALLS OF BOP ENGAGEMENT

Objective: Traditionally, two key pitfalls (for firms) have been the mistaken economic logic and
over extension of resources, leading to significant increase in opportunity costs. The
discussions critically reassess the original assertions of Prahalad, with respect to –
(1) the premises on the ‘nature of the market’, and (2) ‘tapping of the BOP market’
Reading: The $300 House.
Source: https://hbr.org/2011/10/the-300-house , accessed on June 28, 2021.
MODULE III: DECODING THE BOP SUCCESS FORMULA
Module Objective:
The discussion on the pit-falls set up for the final module, wherein we piece the theoretical discourse, map
the venturing experience (from Module II) to conjecture how successful interventions can be created.
 Session 8,9 HEALTHCARE INTERVENTIONS AT THE BOP
Objective: These sessions provide a glimpse on how BOP can be leveraged to crate success. The
discussion is paced out in two parts. In the first part, we track the evolution Narayan
Health (NH) over nearly three decades. NH start as hospitals serving the poor. The
strategy lay in sharing resources for reducing costs for both the ‘Top-of-Pyramid’ and
BOP segments. Arguably, this mechanism seems more strategically sustainable and
provides a roadmap for tapping the BOP.
The next part focusses on how NH leveraged the core model to create a global
presence. During this discussion we discuss how the various pitfalls discussed were
explicitly/ implicitly averted. We end with a discussion on how sustainable BOP
interventions can be undertaken by synergistically linking the top-of-pyramid with
the bottom-of-the-pyramid.
Reading: India, I. (2017). Expanding Access to Low-Cost, High-Quality Tertiary Care: Spreading
the Narayana Health Model Beyond India.
Source:
https://collections.nlm.nih.gov/master/borndig/101718851/taylor_expanding_low
cost_highquality_model_narayana_cs.pdf, accessed on June 28, 2021.
Case: Khanna, T; and Rangan, V.K. (2006). Narayana Hrudayalaya Heart Hospital: Cardiac
Care for the Poor (A). HBSP Classic cases.
Session 10 REFLECTIONS ON THE ROAD TO BOP SUCCESS
Objective: This session reflects on my experience of innovating for the BOP. More specifically,
we focus on how an intervention was created and how it is being scaled up. The
sessions cap the course with an assessment of three common managerial oversight
while tapping the BOP: (1) Improper economic logic: Tapping the BOP involves more
than driving ‘sachet-economics’, as suggested in the original article. Instead,
corporations need to rely on ‘platform-based economics’ for effectively tapping the
BOP; (2) Inability to acknowledge the flexibility limits of firm value-chain: There are
limits to economically extending a Firm’s value-chain; if a Firm starts overextending
the value-chain, focus gets lost (in addition to incurring a large opportunity cost);
and (3) Over reliance on partners: Capable partners allow effective tapping of the
BOP. The partnership model, however, suffers from a critical flaw; with time, the
partners learn. If they are able to breach the barriers involved, they either quit or
reduce engagement scope of the partnership and craft independent growth path.
Reading: Simanis, E., & Duke, D. (2014). Profits at the bottom of the pyramid. Harvard
Business Review, 92(10), 86-93.
Karamchandani, A., Kubzansky, M., & Lalwani, N. (2011). Is the bottom of the
pyramid really for you. Harvard Business Review, 89(3), 107-111.

Text Book for the course: Please give the details of the book if students need to buy the book
Author Title Publisher Edition Remarks, if any
Reference Text Book: The following books are recommended for supplementary reading:
1. Govindarajan, V., & Trimble, C. (2005). Ten Rules for Strategic Innovators: From Idea to
Execution. Harvard Business Review Press. 256 pages
2. Hart, S. (2010). Capitalism at the Crossroads: Next Generation Business Strategies for a Post-
Crisis World 3rd Ed. Pearson Education. 351 pages
3. Prahalad, C.K. (2006). Fortune at the Bottom of the Pyramid: Eradicating Poverty Through
Profits. Dorling Kindersly. 432 pages

Works Cited

Agarwal, S. (2006, August 18). Reaching out to rural India. Retrieved from IIM Bangalore:
https://www.it.iitb.ac.in/~vijaya/ticet/dokuwiki/media/tata-rural-projects.pdf
Business Standard. (2013, February 6). Tatas consolidates agri services line. Retrieved from Business
Standard: https://www.business-standard.com/article/companies/tatas-consolidates-agri-
services-line-104060901049_1.html
Govindarajan, V., & Trimble, C. (2005). Ten Rules for Strategic Innovators: From Idea to Execution.
Harvard Business Review Press.
Hart, S. (2010). Capitalism at the Crossroads: Next Generation Business Strategies for a Post-Crisis
World 3rd Ed. Pearson Education.
Hindustan Unilever Limited. (2005). Project Shakti: Creating Rural Enterepreneurs in India. Mumbai:
Unilever.
IFMR Case Study. (2005). ICICI Bank - Innovations in Microfinance. IFMR.
India CSR Network. (2019, July 30). Hindustan Unilever to empower 5 million women. Retrieved from
India CSR: https://indiacsr.in/hindustan-unilever-to-empower-5-million-women/
Kale, S. (2014, January 16). A Shaky Vision for Financial Inclusion. Retrieved from Mint:
https://www.livemint.com/Opinion/VPzOA6NoPIXCynO9smJBiL/A-failed-attempt-at-financial-
inclusion.html
Karnani, A. (2005). Misfortune at the Bottom of the Pyramid. Greener Management International; No
51, 99-110 .
Khanna, T., Rangan, V. K., & Manocaran, M. (2006). Narayana Hrudayalaya Hospital: Cardiac Care for
the Poor. Harvard Business School Case, 23.
McMillan, J., & Hanley, D. (2003). Grameen Bank. Retrieved from Graduate School of Stanford
Business: https://www.gsb.stanford.edu/faculty-research/case-studies/grameen-bank
Prahalad, C., & Hart, S. L. (2002, January 10). The Fortune at the Bottom of the Pyramid. Strategy +
Business, Issue 26.
Prahalad, C., & Mashelkar, R. (2010). Innovation’s Holy Grail. Harvard Business Review: Emerging
Markets.
Prahalad, D. (2019, January 2). The New Fortune at the Bottom of the Pyramid. Strategy + Business.
Rangan, K. V., & Rajan, R. (2007). Unilever in India: Hindustan Lever's Project Shakti--Marketing FMCG
to the Rural Consumer. Harvard Business School Case, 24.
Reserve Bank of India. (2014, June 24). Financial Inclusion by Extension of Banking Services – Use of
Business Correspondents. Retrieved from Reserve Bank of India:
https://www.rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=8955
Reserve Bank of India. (2018, December 28). Priority Sector Lending - Targets and Classification.
Retrieved from Reserve Bank of India: https://www.rbi.org.in/scripts/FAQView.aspx?Id=87
Talwar, V., Mastakar, N., & Bowonder, B. (2006). ICT Platform for Enhancing Agricultural Productivity:
The Case of Tata Kisan Kendra. Retrieved from Planning Commission:
https://niti.gov.in/planningcommission.gov.in/docs/reports/sereport/ser/stdy_ict/12_tatakisan.p
df
Tata Chemical Limited. (2002). Tata Chemicals launches Tata Kisan Sansar. Retrieved from Tata
Chemicals Limited: https://www.tatachemicals.com/news-room/press-release/Tata-Chemicals-
launches-Tata-Kisan-Sansar
Taylor, A., Escobar, E., & Udaykumar, K. (2017). Expanding access to low-cost, high-quality tertiary
care: spreading the Narayana Health model beyond India. Commonwealth Fund.
Thekkudan, J., & Tandon, R. (2009). Women’s Livelihoods, Global Markets and Citizenship. Brighton:
Institute of Development Studies.
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