MINISTRY OF EDUCATION AND TRAINING

UNIVERSITY OF ECONOMICS AND FINANCE

FALCUTY OF ECONOMICS

REPORT PRESENTATION
COURSE : INTERNATIONAL BUSINESS MANAGEMENT
LECTURER : NGUYEN ANH DUY

Class: MGT1111E.A02E

No. Name of members Student ID % of

contribution
1 Nguyễn Duy Bảo Ngọc 215081168 100%
2 Nguyễn Phương Tường Vy 215082301 100%
3 Mai Nguyễn Bảo Hân 215082759 100%
4 Nguyễn Thanh Quốc Huy 215015707 100%
5 Võ Tiến Hưng 215082057 100%

Ho Chi Minh City, 13 Octorber

I. Introduction to Bottom of the Pyramid (BoP).............................................4
A. Definition and concept............................................................................4
B. Significance and potential of BoP markets.............................................5
1. Significance of BoP markets................................................................5
2. Potential of BoP markets.....................................................................5
II. Identifying Business Opportunities in Developing Markets.......................5
A. Using PESTEL framework to analyze economic factors........................5
1. Market size and growth potential..........................................................5
2. Income distribution and purchasing power...........................................5
3. Infrastructure and logistics....................................................................6
B. Analyzing social and cultural factors........................................................6
1. Consumer behavior and preferences...................................................6
2. Cultural norms and values....................................................................6
3. Local market dynamics and competition...............................................6
III. Exploiting Market Opportunities by Multinational Corporations (MNCs)...7
A. Adapting products and services...............................................................7
1. Developing affordable and value-based offerings................................7
2. Localization and customization strategies............................................7
B. Building distribution networks..................................................................7
1. Overcoming logistical challenges.........................................................7
C. Establishing partnerships and collaborations..........................................8
1. Engaging with local stakeholders.........................................................8
2. Knowledge sharing and capacity building.............................................8
IV. Investment attraction factor......................................................................8
A. The potential for International growth of MNCs in Emerging...................8
1. Expanding markets:..............................................................................8
2.Untapped resources............................................................................10
3.Access to labor:...................................................................................12
4.Joint ventures and partnerships:..........................................................12
5.Technological advancements:.............................................................13
V. Growth Potential in African Nations for MNCs........................................15
A. Economic-social potential of African nations.........................................15
1. Economic growth rates and investment opportunities........................15
2
 3. Rising consumer demand and untapped markets..............................16
B. Key industries for MNCs to enter and capitalize on growth...................16
1. Fast-moving consumer goods (FMCG)..............................................16
2. Retail and e-commerce.......................................................................16
3. Automotive and transportation...........................................................16
VI. Examples of MNCs targeting the Bottom of the Pyramid........................17
A. Nestle: Affordable nutrition and healthcare products............................17
1. Nestle development strategy.............................................................17
2. Price strategy.....................................................................................17
3. Nestle community campaign.............................................................17
4. Affordable nutrition and healthcare products.....................................18
B. Procter & Gamble (P&G): Affordable hygiene and household products 19
1. P&G apply to BoP market :.................................................................19
2. Product :.............................................................................................19
4. Collaboration :...................................................................................20
C. Other sectors like automotive and retailing: Strategies for BoP markets
...................................................................................................................23
D.Identify the key industries that MNCs can enter and capitalize on this
growth.........................................................................................................24
VII. Conclusion..............................................................................................25
A. Recap of the BoP concept and its potential...........................................25
B. Importance of considering economic and social variables.....................26
C. Opportunities and challenges for MNCs in BoP markets.......................27
Opportunities:.........................................................................................27
Challenges:.............................................................................................27

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 I. Introduction to Bottom of the Pyramid (BoP)
A. Definition and concept
The concept of the “Bottom of the Pyramid” (BOP) is a term in economics that
refers to the poorest two-thirds of the economic human pyramid, a group of
more than four billion people living in abject poverty. More broadly, BOP
refers to a market-based model of economic development.
B. Significance and potential of BoP markets
1. Significance of BoP markets
The Bottom of the Pyramid (BoP) signifies 4 billion people at the base of the
global economy, representing a $5 trillion market. This market is typically
rural, underserved, and dominated by the informal economy.
2. Potential of BoP markets
By measuring and understanding this market, we aim to stimulate business
growth and investment, improving service to these populations, increasing
their productivity and income, and aiding their transition into the formal
economy.

II. Identifying Business Opportunities in Developing

Markets
Developing countries are those that have low or middle levels of income,
human development, and industrialization, according to various criteria and
classifications. They are often characterized by rapid economic and social
changes, as well as diverse and complex challenges and opportunities. For
multinational corporations (MNCs) that want to expand their business
operations or enter new markets in developing countries, it is essential to
understand and evaluate the external environment in these countries. By
using the PESTEL framework, MNCs can identify the opportunities and
threats, as well as the strengths and weaknesses, of their business in
developing countries to formulate effective strategies and plans to achieve
their goals and objectives.
A. Using PESTEL framework to analyze economic factors
Economic factors include the aspects of the economy that affect the demand
and supply of goods and services, such as income levels, growth rates,
inflation rates, interest rates, exchange rates, trade policies, and
globalization. There are 3 economic factors that businesses should consider
when entering developing markets:
1. Market size and growth potential
Developing markets have large populations, high growth rates, low
penetration rates, and unmet needs. These factors indicate a high potential
for market expansion and profitability. For example, according to the World
Bank, the population of low-income and lower-middle-income countries was

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about 3.4 billion in 2020, accounting for 43% of the world population. The
average annual growth rate of these countries was 5.4% from 2010 to 2020,
compared to 2.1% for high-income countries.
2. Income distribution and purchasing power
Income distribution: In many developing markets, wealth is often
concentrated among a small population, leading to high income inequality.
This is due to factors like limited access to quality education and healthcare,
corruption, and weak institutions. For instance, in 2016, the richest 1% in
Thailand controlled nearly 58% of their respective nation’s wealth. However,
many countries are implementing policies to reduce income inequality and
promote inclusive growth through investments in education, healthcare, and
social protection programs.
Purchasing power: Purchasing power in developing markets is often lower
due to lower incomes. However, the cost of living is also typically lower. As a
result, even though nominal incomes may be lower, when taking into account
the cost of goods and services locally, the actual purchasing power may not
be as low. For instance, Brunei has high purchasing power due to high
incomes and low living costs. Conversely, countries like Myanmar and Laos
have lower purchasing power due to lower incomes and higher living costs.
3. Infrastructure and logistics
Infrastructure and logistics in developing markets are crucial for economic
growth and poverty reduction. However, across much of the developing
world, infrastructure remains inadequate. For instance, there are one billion
people living more than two kilometers from an all-season road; 675 million
lack access to electricity at home; and nearly 4 billion people live without
access to the Internet. Moreover, disruptions in logistics networks caused by
events such as the Covid-19 pandemic have added to the woes of improving
logistics.
B. Analyzing social and cultural factors
Social-cultural factors include the aspects of the society and culture that
affect the consumer behavior, preferences, values, attitudes, beliefs, and
lifestyles of the people in a given country or region. There are some of the
social-cultural factors that businesses should consider when entering
developing markets:
1. Consumer behavior and preferences
Developing markets have a younger demographic, with a median age of 25
years, compared to 41 years for high-income countries according to the
United Nations. This results in a larger proportion of young consumers with
different needs and preferences. As a result of cultural differences, Chinese
customers care very much about their peers' opinions, but Russian and
French consumers typically don't. Furthermore, unlike Japanese customers,
Nigerians, Mexicans, and Indians have a strong interest in entrepreneurship.

5
 2. Cultural norms and values
Developing markets have diverse cultural groups within their population, such
as ethnicities, religions, languages, customs, and traditions. These groups
have different values, norms, and attitudes that influence their consumption
behavior and choices.
3. Local market dynamics and competition
Local market dynamics in developing countries are often characterized by
fragmentation and inefficiency, resulting in higher prices, greater losses, and
less access to food for the poorest. Millions of small businesses and farmers
are struggling by the inability to access markets and support themselves.
In terms of competition, although many markets in developing countries do
not yet benefit fully from healthy and effective competition, companies are
becoming more competitive as they vie for growth and adopt advanced
technologies.

III. Exploiting Market Opportunities by Multinational

Corporations (MNCs)
MNCs should analyze the economic conditions of the low-income market,
including GDP growth, income levels, inflation rates, and infrastructure
development. They can identify opportunities in emerging industries,
untapped markets, or potential for inclusive business models that address the
needs of low-income consumers
A. Adapting products and services
1. Developing affordable and value-based offerings
Multinational corporations (MNCs) can play a role in inclusive development by
creating jobs, transferring technology and knowledge, and investing in local
communities. However, the extent to which MNCs contribute to inclusive development is
still a matter of debate1. Some studies suggest that MNCs can have a positive impact on
inclusive development by promoting economic growth and reducing poverty1. Other studies
argue that MNCs can have negative effects on inclusive development by exploiting natural
resources, creating environmental problems, and exacerbating income inequality1
2. Localization and customization strategies
Multinational corporations (MNCs) use localization strategies to make full use
of local resources, speed up the pace of entering the local market, and
reduce transnational business risks. This strategy aims to improve the
international competitiveness of MNCs and their ability to sustain
development in the local country. The localization strategy can maximize the
interests of overseas investment and has become a very important strategy in
broadening overseas markets of MNCs 1.
Customization strategies are used by MNCs to adapt their products or
services to meet local market needs. This strategy involves modifying
products or services to suit local tastes, preferences, and regulations.

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Customization strategies can help MNCs increase their competitiveness and enable
themselves to be successful 2.
B. Building distribution networks
1. Overcoming logistical challenges
Multinational corporations (MNCs) face several logistical challenges, including labor
shortages, equipment availability, and the ripple effect of global bottlenecks 1. These
challenges have been exacerbated by the COVID-19 pandemic, which has led to
unprecedented demand and constricted effective logistics capacity
To overcome these challenges, MNCs can take several steps. One is to gain
end-to-end visibility across their supply chain. This can help MNCs identify
potential bottlenecks and take proactive measures to mitigate them 2.
Another step is to integrate their networks efficiently. This can help MNCs
optimize their freight costs and reduce transit times 2. MNCs can also
automate their logistics processes to reduce manual errors and improve
efficiency 2.
C. Establishing partnerships and collaborations
1. Engaging with local stakeholders
Multinational corporations (MNCs) engage with local stakeholders to ensure
that their business activities align with the interests of the local community.
Engaging with local stakeholders can help MNCs build trust, reduce risks,
and create a positive image in the community 1.
One way MNCs can engage with local stakeholders is by building strong
relationships with local organizations. This can help MNCs understand the
needs of the local community and develop programs that address those
needs 1. Another way is by maintaining continuous dialogue with members of
the community. This can help MNCs identify potential issues and take
proactive measures to address them
2. Knowledge sharing and capacity building
MNCs can also engage with local stakeholders to ensure that their business
activities align with the interests of the local community. Engaging with local
stakeholders can help MNCs build trust, reduce risks, and create a positive
image in the community 2.
Another way MNCs can develop their knowledge sharing and capacity
building is by building strong relationships with local organizations. This can
help MNCs understand the needs of the local community and develop
programs that address those needs 3. MNCs can also involve internal and
external stakeholders in volunteer programs. This can help MNCs build
relationships with the community and demonstrate their commitment to social
responsibility 3. Finally, MNCs can create social infrastructure institutions to
support the development of the local community 3.

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 IV. Investment attraction factor
A. The potential for International growth of MNCs in Emerging
1. Expanding markets:
Emerging and developing nations often experience rapid economic growth, a
rising middle class, and increasing consumer demand. MNCs can tap into
these expanding markets and benefit from the growing purchasing power of
consumers.
One example of expanding markets of multinational corporations (MNCs) in
emerging economies is the growth and investment in the consumer goods
sector in countries like India.

Companies like Nestle, Procter & Gamble, and Unilever have all expanded
their operations in India due to its large and growing middle class population.
These MNCs have recognized the potential for increased consumer spending
in emerging markets and have developed products specifically tailored to the
local market.

For example, Nestle has introduced products like Maggi noodles with local
flavors and spices, which have gained popularity among Indian consumers.
Similarly, Procter & Gamble has launched brands like Whisper, a feminine
hygiene product, catering to the needs and preferences of Indian women.

In addition to customizing products, MNCs have also invested in building local

production and distribution capabilities to cater to the rising demand. They
have set up manufacturing facilities in India to reduce import costs and
localize their supply chain.

Apart from India, MNCs have also expanded their presence in other emerging
markets such as China, Brazil, and Indonesia. These countries offer vast
market opportunities due to their large populations and growing middle class,
which translates into higher consumer spending power.

Overall, the expanding markets of MNCs in emerging economies

demonstrate their recognition of the potential for growth and profitability
outside their traditional markets. This trend has led to increased competition
among MNCs and local companies, ultimately benefiting consumers with a
wider range of products and choices.

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 2.Untapped resources
Many lower-middle-income nations possess abundant natural resources, including
minerals, oil, gas, and agricultural products. MNCs can leverage these resources for
their operations, leading to increased profitability and expansion opportunities.
markets include:

- Many emerging markets are home to a large pool of skilled and talented
individuals who can be tapped into for various roles and functions within
MNCs. By hiring and training local talent, MNCs can benefit from their
knowledge of local markets, languages, and culture, which can be particularly
valuable when it comes to connecting with and understanding customers in
these markets.

- Emerging markets often have abundant natural resources and raw materials
that can be utilized by MNCs for their production processes. By establishing
operations in these markets, MNCs can gain direct access to these resources,
reducing costs and supply chain complexities.

- MNCs can leverage their presence in emerging markets to gain in-depth

knowledge and insights about local consumer preferences, market trends, and
emerging technologies. This information can help MNCs to develop products
and services that are better tailored to the specific needs and preferences of
customers in these markets, giving them a competitive advantage.

9
 - Some emerging markets have been investing heavily in infrastructure
development, such as transportation networks, logistics hubs, and distribution
channels. MNCs can leverage these well-developed infrastructure resources to
efficiently distribute their products and reach a wider customer base, thereby
expanding their market share.

- Emerging markets often have a growing ecosystem of local businesses and

startups that can offer innovative solutions, technologies, and partnerships for
MNCs. By collaborating with these local entities, MNCs can benefit from their
agility, entrepreneurial mindset, and local network, helping them to gain a
competitive edge and accelerate their growth in these markets.

- Emerging markets are typically characterized by a large population and a

growing middle class with increasing purchasing power. MNCs can tap into
these untapped customer segments by offering products and services that cater
to their specific needs and preferences. By doing so, MNCs can capture a
significant share of the market and potentially fuel long-term growth.

According to a 2015 report, Nigeria loses about N50 trillion from untapped resources.
Although companies are already tapping into agriculture, there are natural resources
in the country that are capable of turning the federal government’s plan into reality, if
properly explored. In 2010, the Nigeria’s federal government identified commercial
deposits of a total of 37 minerals but there has not been a full scale exploration of
these minerals, with the exception of Dangote Industries which had plans to begin
mining gold, iron ore, coal and lead/zinc in January 2015.
The map below shows the economic activities in different mineral, agricultural and
industrial resources in Nigeria.

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 3.Access to labor:
Lower-middle-income nations often have a large pool of skilled workers
available at lower labor costs compared to developed countries. MNCs can
take advantage of this cost differential to enhance their competitiveness and
increase productivity.
One example of access to labor of multinational corporations (MNCs) in
emerging countries is the manufacturing industry in China. Many MNCs
establish factories and production facilities in China to take advantage of the
abundant and comparatively low-cost labor available in the country.

For instance, Foxconn, a major Taiwanese electronics manufacturer and

supplier to companies like Apple, Samsung, and Dell, has a significant
presence in China. The company has multiple factories across different cities
in China, employing a large number of local workers. These workers help
produce and assemble electronic devices, such as smartphones, tablets, and
computers.

The access to the Chinese labor market allows MNCs like Foxconn to benefit
from a large workforce at lower wages compared to developed countries. This
enables them to keep production costs down and maintain competitive prices
in global markets.

This example highlights how MNCs can tap into the labor resources of
emerging countries like China to gain a competitive advantage in terms of
production costs and access to a skilled and flexible workforce. However, it
11
also raises concerns about working conditions, labor rights, and fair wages,
which have been subjects of criticism and scrutiny in the case of some MNCs
operating in emerging markets.

4.Joint ventures and partnerships:

MNCs can form alliances with local companies or governments in emerging
markets, allowing them to navigate cultural, political, and legal complexities
effectively. Such collaborations enable knowledge sharing, adaptability to
local preferences, and access to distribution networks.
Multinational companies (MNCs) often seek cooperation and joint venture
opportunities with companies in emerging countries to take advantage of the
development potential of these markets. This is a way for MNCs to expand
their business and increase their presence globally.

Some of the benefits of joint ventures and partnerships with companies in

emerging countries include:

- MNC companies can leverage the presence and local knowledge of

local partners to access new markets. This helps them quickly build a
distribution network, learn about local culture and enhance
competitiveness in this country.
- Risk sharing: Joint ventures and partnerships help MNCs share risks with local
partners, minimizing potential risks and initial costs associated with expanding
into new markets. This also helps promote foreign and local investment,
creating jobs and economic development.

- Technology and financial cooperation: Joint ventures and cooperation help

MNCs access advanced technology and new finance. Local companies often
have deep knowledge of markets and work processes, while MNCs bring
effective research and development and management capabilities. This
partnership creates a combination of creative and innovative advantages,
helping both parties improve their businesses.

- Build reputation and brand: Collaboration and joint ventures with local
companies can help MNCs build reputation and brand. With support from local
partners, MNCs can build a positive image in the community, build customer
trust and increase brand awareness.

Some examples of MNC joint ventures and collaborations in emerging countries

include:

- Coca-Cola and Dannon Joint Stock Company (Vinamilk) in Vietnam: Coca-

Cola has cooperated with Vinamilk to develop and access the beverage market

12
 in Vietnam. This is a local joint venture to leverage Vinamilk's local
knowledge and distribution network.

- Toyota and Toyota Vietnam Joint Stock Company: Toyota has made a joint
venture with a Vietnamese company to produce and distribute cars in the
Vietnamese market. This helps create more job opportunities and grow the
industry

5.Technological advancements:
Developing nations are increasingly investing in technological infrastructure, which
presents opportunities for MNCs to introduce innovative products and services. This
can lead to a competitive advantage and market dominance in sectors where
technological advancements are in high demand.

6.Markets
- Coca-Cola and its bottling partners: Coca-Cola has developed successful joint
ventures and partnerships with local bottling companies in numerous emerging
markets. These collaborations have enabled Coca-Cola to adapt its products to
local preferences, expand its distribution network, and tap into the bottlers'
knowledge of the local consumer market.

- Unilever and local partners: Unilever, a multinational consumer goods

company, has formed partnerships with local companies in emerging markets
such as India and China. These partnerships have allowed Unilever to
capitalize on the local company's distribution networks, understanding of
consumer preferences, and manufacturing capabilities.

- Renault-Nissan Alliance: The Renault-Nissan Alliance is a strategic

partnership between the French automaker Renault and the Japanese
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 automaker Nissan. Through this alliance, both companies have expanded their
operations in emerging markets such as India, Brazil, and China. They have
leveraged their complementary strengths in technology and production to
achieve cost efficiencies and boost their market share in these markets.

- Nestle and various local partners: Nestle, a Swiss multinational food and
beverage company, has established joint ventures and partnerships with local
companies in various emerging markets. For example, Nestle has partnered
with Groupo LALA in Mexico to jointly produce and distribute dairy products.
These collaborations allow Nestle to tap into local expertise, access
distribution networks, and adapt its products to cater to local tastes.

- Walmart and Flipkart: Walmart, an American multinational retail corporation,

acquired a majority stake in Flipkart, an Indian e-commerce company, in 2018.
This partnership allows Walmart to leverage Flipkart's extensive logistics and
supply chain capabilities, as well as its deep understanding of the Indian
market. It also gives Flipkart access to Walmart's global supply chain expertise
and resources.

These examples highlight the various ways in which MNCs are engaging in joint
ventures and partnerships in emerging markets. By collaborating with local
companies, MNCs can navigate the complexities of unfamiliar markets, gain local
insights, and create mutually beneficial opportunities for growth and expansion.

V. Growth Potential in African Nations for MNCs

A. Economic-social potential of African nations
1. Economic growth rates and investment opportunities
Africa has experienced significant economic growth over the past few
decades, with an average GDP growth rate of around 3.6% per year. This
growth has been driven by various factors such as favorable demographics,
inceasing urbanization, and a growing middle class.
Africa is rich in natural resources, which has attracted significant investment
in sectors like mining, oil and gas, and agriculture.
Some of the key areas with potential for investment include:
 Infrastructure: transport, energy. Water and sanitation and
telecommunications.
 The manufacturing
 Agriculture
 Renewable energy
 Financial services.
 Rapid urbanization
 Technology and innovation

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 2. Increasing middle class and urbanization trends
According to the African Development bank, middle-class Africans have
tripled to 313 million (approximately 34% of the continent’s population) over
the last 30 years.
The rise of the African middle class is due to the continent’s strong economic
development, move towards a stable and salaried job culture, and a shift
away from traditional agricultural activities.
According to a report by The middle of the pyramid: Dynamics of the middle
class in africa, although the middle class is growing, there is still widespread
income inequality in Africa, and the middle class consists of many ‘floating
class’ members who can fall into poverty at any time due to economic shocks.
3. Rising consumer demand and untapped markets
Over the past few years, business leaders and investors have become
increasingly aware of the vast potential in Africa’s burgeoning consumer
market. The continent, now home to more than 1.1 billion people, will account
for one-fifth of the world’s population by 2025. More and more Africans are
entering the consumer class, with tens of millions emerging from poverty in
recent years.
Yet there are well-known deterrents to doing business in Africa—political
instability and poor infrastructure, to name just two—that can make
companies hesitant to enter the market at all. That said, a few multinational
consumer-packaged-goods (CPG) companies have managed to make
important inroads in Africa. Their experience holds valuable lessons for
others aspiring to capture the opportunities in one of the world’s fastest-
growing consumer markets.
Currently, Africa is also a potential market for many other products such as medical
supplies, motorbikes and components, spare parts, generators, water pumps.

B. Key industries for MNCs to enter and capitalize on growth

1. Fast-moving consumer goods (FMCG)
The hyper-competitive world of fast-moving consumer goods (FMCG) —
goods that are easily produced, packaged, sold, and consumed (i.e., food,
beverages, snacks, toiletries, etc.) — relies on narrow profit margins,
competitive branding, and global reach. Since most FMCG companies
produce and ship similar products, the majority of their profit margin is driven
by either branding or scope.
2. Retail and e-commerce
The rise of retail from africa. Growing populations and larger cities create
great opportunities for retail. For example, wholesale and retail are already
the 3rd largest contributor to Nigeria’s GDP. Kenya has saw a 54% growth in
store count over the past 5 years. South Africa almost has 2000 shopping
centers have an area of more than 24 million square meters. With the
increase of investment.

15
In term of technology and infrastructure,Johannesburg is ready to become a
“City of luxury”. Africa, “maboneng’s reborn neighborhood boasts trend
restaurants, lluxuru hotel and showroom.
Mobile phone technology development association GSMA notes that three-
quarters of the population of sub-Saharan Africa, repectively equivalent to
747 million people, had a sim connection in 2018. By 2022, Vietnam’s mobile
economy.Africa is expected to generate 150$ billion in economic value.
Furthermore, mobile phone are central of life in Africa. 96% of dark wed traffic
comes from mobile devices, so the brands looking to engage with African
consumers need to remember that they are first mobile devices
3. Automotive and transportation

Transport currently makes up 10 percent of Africa’s total greenhouse gas (GHG)

emissions, which is expected to increase in line with sub-Saharan Africa’s
expanding vehicle parc (Exhibit 1). In the six countries that make up around 70
percent of sub-Saharan Africa’s annual vehicle sales and 45 percent of the region’s
population (South Africa, Kenya, Rwanda, Uganda, Ethiopia, and Nigeria), the
vehicle parc is expected to grow from 25 million vehicles today to an estimated 58
million by 2040, driven by urbanization and rising incomes. As its vehicle park
grows, the challenge for sub-Saharan Africa will be to push for more sustainable
mobility and avoid the risk of becoming the dumping ground for the world’s
unwanted used ICE vehicles.

VI. Examples of MNCs targeting the Bottom of the Pyramid

A. Nestle: Affordable nutrition and healthcare products
1. Nestle development strategy
First of all, Nestle has established local production facilities and supply chains
to minimize transportation costs and other costs
 Reduce costs for consumers.
This helps in making their healthcare products more affordable for the BOP
segment. Nestle always wants its products to reach as many people as possible,
so they chose a low pricing strategy.
2. Price strategy
Furthermore, Nestle will also adjust the selling price if it finds that the price is
not appropriate. This can help people with low or high income levels access
their products. This is one of the plans in Nestle's market penetration strategy.

The prices of Nestle products are as follows:

NESCAFE CAFÉ 250g grade 1 50.000 VND

VIETNAM
Roasted and
ground coffee
NESCAFE 3in1 (20x17g) - Tet look 51.000 VND
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Rich and
harmonious
NESC 3in1 Iced 10x20g)Slv 36.500 VND
milk coffee

Nescafe 10 packs x 20g 60.000 VND

Cappuccino
Caramel flavor

3. Nestle community campaign

Besides that, Nestle also participates with the BOP community in creating
humanitarian campaigns to raise awareness and knowledge about health to
everyone. Create trust for customers and improve the nutritional value
of products.
Consistent with the goal of improving the quality of life and contributing to a
healthier future, since the outbreak of the COVID-19 pandemic, Nestlé in
Vietnam has always stood side by side with the Government to support the
frontline in fighting the epidemic. In addition, Nestlé has implemented many
programs to support partners, customers and communities affected by the
pandemic. Main activities include:
 Join hands with organizations, departments of the Government and
localities in supporting the front line of the epidemic with a total value of
in kind and cash of more than 12 billion VND.
 Encourage an active and healthy lifestyle in the community, together
overcoming the COVID-19 pandemic through the activities of the brands
MILO, MAGGI, NESCAFÉ.
 Supporting small business partners that are heavily affected, including
small restaurants, small eateries, and school canteens, "Overcoming
challenges, Seizing opportunities" with a total gift value of up to 22
billion VND.
Add lasting energy to children to go to school with the donation of 2 million
boxes of Nestlé MILO milk on the occasion of children returning to school after
a period of social isolation.
4. Affordable nutrition and healthcare products

Nestle's products are mainly products that meet daily needs, drinks, and food in the
family.
With the motto "Bring each product to each family" and can completely cover the
market. Therefore, Nestle created Maggi products to each family in Viet Nam
MAGGI's goal is to become consumers' design friend, helping them prepare
equipment and cook delicious, nutritious dishes for their families every day.
With many products that are essential cooking spices for the family, Maggi has
naturally fermented products that are guaranteed to be safe at very low prices.
During the recent Covid 19 epidemic season, Maggi had a health campaign with
17
the messages "Delicious and healthy home cooked meals" and "Love in the
kitchen" to help people feel secure in fighting the epidemic and improving their
health.

 Create connections with communities and customers in many localities,

see the closeness of the brand and care about customers

B. Procter & Gamble (P&G): Affordable hygiene and household

products
1. P&G apply to BoP market :
 Product innovation : P&G focuses on developing products specifically
for the BoP market. They have introduced smaller sizes and affordable
versions of existing products to make them more accessible to
consumers with limited purchasing power.
 Price strategy : P&G has implemented a pricing strategy to make their
products more affordable for BoP consumers. They have adjusted
prices to match the purchasing power of this consumer group, ensuring
that the product is within reach of the target market.
 Marketing and communications: They collaborate with local retailers,
small businesses, and micro-entrepreneurs to extend their distribution
networks into remote and underserved areas.
 Partnerships and collaborations: P&G has partnered with non-
governmental organizations (NGOs), government agencies, and local
community organizations to better understand the needs and
preferences of BoP consumers.
2. Product :
 Purpose: So that household products can be used by many types of
customers, from low to high income
 Activities: P&G runs ads for many products, many prices with great
incentives for people to take advantage of purchases without worrying
about price.
 P&G has developed low-cost or low-value brands to provide options
suitable for consumers with limited budgets. P&G focuses on optimizing

18
 manufacturing processes and supply chains to reduce costs. They often
organize price promotions and discounts for their products.

 P&G has produced many sizes in one product, many smaller sizes
at cheaper prices to reach more buyers and suit the bop market.

4. Collaboration :
They have collaborated to organize community health campaigns for people
to better understand and choose their products to protect themselves.
It can be seen that the main campaigns are about clean drinking water,
afforestation, red cross,... with the message "protecting health from things
around" and their products also help the own environment. you have green
air
In addition, to make household products more popular in places where there
are not many supermarkets or stores, P&G expanded and promoted online
sales channels with more favorable prices than buying directly in stores.
Actively cooperate with local and non-governmental organizations to
implement sustainable development projects

19
20
  Understand clearly the economic context in many localities and
consumer needs of the bop market to come up with appropriate
business plans. By engaging the BOP community in their value
chain, P&G not only creates economic opportunities but also
promotes entrepreneurship and local economic development.

In addition, P&G often offers promotions, discounts, purchases and gifts on

electronic sales sites so customers can buy and use products.

21
 C. Other sectors like automotive and retailing: Strategies for BoP
markets
Tata Motors is one of the leading automobile manufacturers in India and has
adopted the Bottom of the Pyramid (BOP) strategy in reaching the low-
income consumer market. In particular, Tata Motors introduced the low-cost
car model Tata Nano, with the goal of providing a safe, reliable and affordable
means of transportation for BOP consumers. In 2008, Tata Moto launched
what was said to be the "world's cheapest" car.

However, after a while, Tata was no longer successful because of

competition from many other car companies in the world. But Tata is still
committed to its reputation through efforts to research products suitable for
the BOP market, to bring convenience and value to consumers in the low-
income segment.

22
 D.Identify the key industries that MNCs can enter and capitalize on
this growth.

 Consumer Goods: Consumer goods industries, such as food and

beverages, personal care products, and household goods, have
significant potential in BoP markets. MNCs can develop affordable and
culturally relevant products to cater to the specific needs and
preferences of BoP consumers.

 Financial Services: BoP markets often have a large unbanked or

underbanked population. MNCs can offer innovative financial services,
including microfinance, mobile banking, and remittance services, to
increase financial inclusion and provide access to essential banking
services.

 Healthcare: Healthcare is a crucial sector in BoP markets. MNCs can

enter this industry by offering affordable healthcare products, such as
generic medicines, medical devices, and diagnostic tools. They can
also invest in healthcare infrastructure, clinics, and telemedicine
services to improve access to quality healthcare.

 Energy and Clean Technologies: BoP markets often face challenges

related to energy access and environmental sustainability. MNCs can
invest in renewable energy solutions, such as solar power systems,
energy-efficient appliances, and clean cooking technologies, to provide
affordable and sustainable energy solutions to BoP communities.

 Agriculture and Farming: Agriculture is a vital sector in many BoP

markets. MNCs can contribute by introducing improved farming
practices, providing access to high-quality seeds, fertilizers, and
agricultural machinery, and offering market linkages to help smallholder
farmers increase productivity and income.

 Education and Skills Development: There is a significant need for

affordable and quality education in BoP markets. MNCs can enter the
education sector by offering vocational training programs, technology-
enabled learning solutions, and scholarships to support access to
education and skills development.

 Telecommunications and Information Technology: BoP markets often

experience rapid growth in mobile phone usage and internet
penetration. MNCs can capitalize on this by offering cost-effective
smartphones, affordable data plans, and digital services tailored to the
needs of BoP consumers, such as e-commerce platforms and mobile-
based applications.
23
  Water and Sanitation: Access to clean water and sanitation facilities is a
critical challenge in many BoP markets. MNCs can enter this sector by
providing affordable water purification systems, sanitation solutions, and
water management technologies to improve access to clean water and
sanitation services.

VII. Conclusion
A. Recap of the BoP concept and its potential
The BoP is divided into two main components: the current account and the
capital and financial account.
Current Account: This account records the flow of goods and services, as well
as income and transfers, between a country and the rest of the world. It
includes:

a. Trade Balance: The difference between a country's exports and imports of

goods.
b. Services Balance: The net balance of services traded, such as tourism,
transportation, and financial services.
c. Income Balance: The balance of income earned from investments, such as
dividends and interest.
d. Transfers: The balance of unilateral transfers, including remittances and
foreign aid.

Capital and Financial Account: This account tracks capital flows, including
foreign direct investment (FDI), portfolio investment, and changes in reserve
assets. It reflects the net change in a country's ownership of foreign assets
and foreign ownership of domestic assets.

The BoP concept is essential for several reasons:

Economic Analysis: The BoP provides insights into a country's economic
performance, competitiveness, and financial stability. It helps
policymakers, economists, and investors assess the health of an economy
and identify areas for improvement.
Exchange Rates: BoP data influences exchange rates by reflecting the
supply and demand for a country's currency. A country with a surplus in its
BoP may experience an appreciation of its currency, while a deficit may
lead to depreciation.
Policy Formulation: Governments use BoP data to formulate economic
policies, including trade policies, exchange rate policies, and capital
control measures. It helps them monitor and manage their international
economic relations effectively.
24
External Sustainability: The BoP provides insights into a country's external
sustainability by monitoring its ability to meet its foreign payment obligations.
Persistent deficits may indicate vulnerability and the need for policy
adjustments.

B. Importance of considering economic and social variables

Economic variables, such as GDP, inflation, and employment rates, provide
insights into the health and performance of an economy. However, social
variables, including education, healthcare, poverty rates, inequality, and
social mobility, offer a more comprehensive understanding of the well-being
and quality of life within a society. By considering both economic and social
variables, policymakers, researchers, and analysts can gain a more holistic
view of the challenges and opportunities present.
 Effective policy formulation requires a consideration of both economic
and social variables. Policies that solely focus on economic growth
without considering social variables may lead to unequal distribution of
wealth, increased inequality, and social unrest. Conversely, policies that
prioritize social welfare without considering economic variables may be
unsustainable in the long run. By considering both sets of variables,
policymakers can design more balanced and inclusive policies that
promote sustainable economic growth and enhance social well-being.
 Economic and social variables are interconnected and influence each
other. For example, high levels of income inequality can hinder
economic growth and social cohesion. Investments in education and
healthcare can improve human capital and productivity, leading to
higher economic growth. By considering the interdependencies
between economic and social variables, policymakers can identify
potential trade-offs and synergies and develop more effective strategies
for sustainable development.
 When assessing the impact of policies, programs, or interventions,
considering both economic and social variables is essential. Economic
impact assessments often focus on indicators such as GDP growth or
job creation, but they may not capture the broader social implications.
Social impact assessments, on the other hand, provide insights into the
changes in social indicators like poverty reduction, access to education,
healthcare, and social mobility. By considering both economic and
social variables in impact evaluations, decision-makers can assess the
overall effectiveness and identify unintended consequences of their
initiatives.
 Sustainable development entails balancing economic growth, social
progress, and environmental protection. By considering economic
and social variables together, policymakers can work towards
achieving sustainable development goals. This holistic approach
25
 ensures that economic growth is inclusive, reduces poverty and
inequality, promotes social well-being, and protects the environment
for future generations.

C. Opportunities and challenges for MNCs in BoP markets

Opportunities:
 BoP markets represent a vast consumer base with significant untapped
purchasing power. MNCs can tap into these markets and target the
large population of consumers who were previously underserved or
ignored by traditional business models.
 BoP markets often experience rapid population growth, urbanization,
and rising incomes. This growth presents opportunities for MNCs to
establish early market presence and gain a competitive advantage as
the markets continue to develop.
 BoP markets often require innovative business models, products, and
services to address the unique needs and constraints of low-income
consumers. MNCs that can adapt their offerings to suit the affordability,
accessibility, and cultural preferences of BoP consumers have the
potential to gain a strong market position.
 MNCs operating in BoP markets have the opportunity to create positive
social impact by addressing pressing societal challenges, such as
poverty, healthcare, education, and access to basic services. These
initiatives not only contribute to the well-being of communities but also
enhance the long-term sustainability of the business.

Challenges:
 BoP consumers typically have limited purchasing power, and
affordability is a significant concern. MNCs must develop strategies to
offer products and services at prices that are accessible to BoP
consumers while ensuring profitability.
 BoP markets often have inadequate infrastructure, including
transportation, logistics, and distribution networks. MNCs need to
navigate these challenges to ensure efficient delivery of products and
services to remote or underserved areas.
 BoP markets are diverse, with variations in cultural norms, languages,
and consumer preferences. MNCs must understand and respect these
cultural differences to effectively market and sell their products or
services.
 MNCs operating in BoP markets may face complex regulatory
frameworks, bureaucratic hurdles, and political uncertainties.
Understanding and navigating these challenges is crucial for successful
market entry and ongoing operations.

26
  BoP markets often have a range of local competitors that have a deep
understanding of the market dynamics and consumer preferences.
MNCs entering these markets need to compete with local players who
may have established brands, distribution networks, and cost
advantages.
 Building sustainable and scalable business models in BoP markets can
be challenging. MNCs need to strike a balance between social impact
and profitability while ensuring that their initiatives can be replicated and
expanded to reach a larger consumer base.

27
28
 % contribution of the Evaluation of
No. Full name Student ID Tasks task to the overall task results
task
+ Part VI
+ Conclusion
+ Question :
1. Identify the key industries that
MNCs can enter and capitalize
on this growth.
1 Nguyễn Duy Bảo Ngọc 215081168 2. Find the examples that MNCs: 20% T
Nestle, P&G, Unilever, other
sectors like Car/ Retailing ..
target “the Bottom of Pyramid”?
+ Slide

+ Part II + Part I
+ Introduce
2 Võ Tiến Hưng 215082057 + Slide 20% T

+ Part V
+ Question :
What is the great growth potential in
African nations for MNCs? Give some
Nguyễn Thanh Quốc
3 215015707 data about the economic- social 20% T
Huy potential of the African nations.
+ Slide

4 Nguyễn Phương Tường 215082301 + Part III 20% T

Vy + Question : USING the PESTLE:
Economic, Social – Cultural factors
framework to identify the potential and
business opportunities of the
Developing markets ( Low income,
 lower middle income countries). How
do MNCs exploit these market
opportunities?
+ Slide
+ Part V
+ Question : What is the potential for
International growth of MNCs in
5 Mai Nguyễn Bảo Hân 215082757 Emerging/ developing nations like: 20% T
Lower-middle Income nations ???

TOTAL 100%

30