Abstract
Since the mists of time many people have reflected and worked on the issue of poverty, Mandela (2005), in an interview, argues that ‘like slavery and apartheid, poverty is not natural. It is man made and it can be overcome and eradicated by the actions of human beings.' Even earlier it has been argued that poverty was the worst form of violence (Ghandi, 1940). But the sentence ‘Bottom of the Pyramid' (BoP) was first introduced by Roosevelt, on the 7th of April 1932 in his radio address: The forgotten Man. Later, in the late 1990s Prahalad and Hart have suggested that multinational corporation companies (MNCs) can help to reduce the poverty.
They defend the idea that if MNCs create suitable and affordable product for the low-income people, they can both help reduce poverty and generate new benefits. Then, they have offered the concept of ‘Bottom of the Pyramid', which refers to the 4 billion of people who live on an income of 3 US $ or less per day in purchasing power parity (PPP) (Prahalad, 2004). However, although this concept has generated a strong interest in the corporate world and in lot of academia, the reality of this idea remains controversial (Karnani, 2007).
Nowadays, the context in which the MNCs operate experiences important changes and the idea of the BoP as virgin market, easy to conquer by the company, has disappeared. The issues related to environmental sustainability and corporate social responsibility (CSR) are more and more ubiquitous (Diamond, 2005). Whether through consumer pressure or through government regulation, companies can no longer ignore these trends. In this context of questioning of the conventional business models, ideas of Prahalad and Hart around the wealth at the base of the pyramid have interested many multinational companies, and we have seen a proliferation of initiatives of these ones to attempt to penetrate this forgotten market. These initiatives have as the main objective to obtain knowledge of the market and to generate long-term benefits. They are also part of the issue of corporate social responsibility (CSR) aforementioned, because they incorporate social aspects to developing countries. Thus, in most cases the BoP initiatives use a social partner. However, we can separate the social businesses and the projects managed as usual projects of the company.
