The document summarizes a presentation on how multinational ICT companies can benefit from entering the Base of the Pyramid (BOP) market in a commercially successful and sustainable way. It discusses 5 case studies of ICT companies partnering with local organizations to provide products and services to the BOP. The presentation analyzes the companies' business models, products/services, and partnerships. It finds that partnerships are often unconventional, and companies must understand local needs and cultures to succeed while benefiting the BOP.

1. BOP & ICT MNCS
Base of the Pyramid approach reflected on
the strategy of multinational ICT companies
GUEST PRESENTATION - Anand Sheombar
@ TNO, IT4D group 16 December 2009

2. CONTENTS
• What is BOP
• ICT & BOP
• Research question
• Research approach
• Multiple case study method
• Data collection – 5 cases
• Case report analysis
• Example M-PESA
• Findings / hands-on
summary
• Conclusion
• Implication

3. WHAT IS BOP?
Base of the economic Pyramid (BOP) or Bottom of the Pyramid

4. ICT & BOP?
Estimated BOP market and focus on annual ICT spending per
region (WRI, 2007)

5. RESEARCH QUESTION
Local partner
(NGO, local
Multinational ICT
entrepreneur, local
company
governmental
institution etc.)
Base of the Pyramid
(BOP)
• How can multinational ICT companies (ICT MNC) benefit from entering the
Base of the Pyramid (BOP) market in a commercial successful and
sustainable way?
• And what could be the opportunities in the BOP market for multinational
ICT companies?

6. SUB (RESEARCH) QUESTIONS
1. What is the so called BOP market and how does it look like in Africa?
2. Of what interest is the BOP for the researched multinational ICT
companies?
3. What kind of BOP business models & strategies are pursued by the
researched multinational ICT companies?
4. What kind of products & services are developed and delivered to the
BOP by the researched multinational ICT companies?
5. Assuming ICT MNCs cannot or will not enter this BOP market alone,
with what kind of organization is a partnership forged by the
researched multinational ICT companies?
6. Is there an interrelation between the main units of analysis of this
research, namely BOP business models & strategies, products &
services and partnership?

7. MAIN UNITS OF ANALYSIS

8. RESEARCH APPROACH
• Focus mainly on qualitative and not
quantitative aspects
• Case studies
• Semi-structured interviews
• Focus on Africa

9. MULTIPLE CASE STUDY METHOD
Multiple case study method (Yin, 2003)

10. DATA COLLECTION – 5 CASES
Case Project IT MNC Description
number
I M-Pesa Vodafone (Safaricom Mobile payments & banking.
in Kenya)
II Village Phone Grameen & Nokia Rural shared telephone facility.
III Village Nokia-Siemens Rural local phone network in
Connection Networks (NSN) the village.
IV World ahead Intel Sustainable technology for
(Classmate PC) users in developing countries.
V Unlimited Microsoft Various ICT activities aimed at
Potential emerging markets.
(Telecenter)

11. CASE REPORT ANALYSIS
CASE REPORT ANALYSIS STRUCTURE
Case analysis category Description
Main unit of
Business & Strategy
Analysis ►
Value proposition The sum total of benefits and costs, thus value, that result from engaging in
business with that company.
Business model
Local capacity building It refers to the extent to which the company contributes to the local capacity of
qualities
communities.
Embeddedness The extent to which the business is an integrated part of the lives of those at the
BOP.
Learning by the firm through native capability Inclusion of learning in the business model
Scalability The potential scale and scope of the business model.
Value chain scheme A graphic representation of the value chain from IT MNC to BOP consumer.
BOP 1.0 or BOP 2.0 BOP 1.0 (Selling to the Poor) versus BOP 2.0 (Co-venturing)
Relation business model & strategy, partnership and Graphic representation of the relationship between these three main units of
products & services analysis.
Sustainability; Triple P aspects Graphic representation of the sustainability of the company’s BOP venture (people,
planet, profit)
Main unit of
Products & Services
Analysis ►
Availability The extent to which customers are able to readily acquire and use a product or
service.
4A-Framework
Affordability The degree to which a company’s products or services are affordable to BOP
consumers.
Acceptability The extent to which consumers and others in the value chain are willing to
consume, distribute or sell a product or service.
Awareness The degree to which customers are knowledgeable about product or services.
Product & service development Development process.
Main unit of
Partnership
Analysis ►
Cooperation Analysis aspects of the cooperation of the IT MNC with local partners.
Typology Classification of partnership.

12. EXAMPLE M-PESA (CASE I)

13. M-PESA CASE ANALYSIS HIGHLIGHTS
• Banking for the unbanked. BOP business
• Distribution via M-PESA agents
model &
strategy
• Partly embeddedness in BOP.
• Usage different from initial design. Product &
• Opportunities for scaling up;
service Partnership
development
even outside BOP markets .
• Affordable: Pay As You Go charging model
• “Private social private” partnership.
M-PESA (Low-
Public private CBA banking Safaricom telecom M-PESA Educational
development income)
funding activities operations agents marketing
joint project Consumer
Faulu MFI

14. HANDS-ON SUMMARY

15. CONCLUSION –ANSWER ON
RESEARCH QUESTIONS
How can multinational ICT companies (ICT MNC) gain
benefit from entering the Base of the Pyramid (BOP)
market in a commercial successful and sustainable way?
• Shift in mindset
• Quality aspects of the business model
• Unconventional partnerships
• Factors that could impact the health of the
partnership
• Alignment is needed between “BOP Business
model & strategy” with the chosen
“Partnership” and the “BOP Product & Service
development

16. CONCLUSION –ANSWER ON
RESEARCH QUESTIONS -II
And what could be the opportunities in the BOP market for
multinational ICT companies?
• BOP has massive and a growing underserved
markets
• Local innovations can be leveraged across other
BOP markets.
• Multinational ICT companies learn from local
partners or from the local BOP community
• Transfer to their higher-income markets
(innovation blowback).

17. IMPLICATIONS
Research:
• ICT for development (ICT4D) ; partnership issues
• Quantitative research (survey) ICT MNCs in the BOP
• Comparative research (local companies)
Practice:
• Inspiration for ICT MNCs to engage with the BOP
(differently).
• Sustainablity aspects; BOP strategies in conjunction
with clean technology could lead to competitive
advantage, academics argue.
Education:
• Awarenes for BOP

18. Questions?
Contact address: anand.sheombar@gmail.com
LinkedIn: nl.linkedin.com/in/anandsheombar

19. Additional information (extra slides)
I. Findings for business model qualities
II. Discussion of findings BOP business
model qualities
III. Value chain schemes
IV. Discussion of value chain schemes
V. Relation business model & strategy,
partnership and products & services
VI. Discussion of Relation business model
& strategy, partnership and products &
services
VII.Findings products & services
VIII.Discussion findings products &
services
IX. Findings Partnerships
X. Discussion findings Partnerships

20. FINDINGS FOR BUSINESS MODEL
QUALITIES
Business Model Qualities
Vodafone Nokia MTN NSN Intel Microsoft Unlimited
M-PESA Village Phone Village Connection World Ahead Classmate Potential
PC
Value proposition Banking for the unbanked. Affordable village Affordable connectivity Sustainable technology. lCT that is accessible,
Locally responsive strategy. telecommunications. and access to mobile Classmate PC as affordable, and
Micro-finance funding and phones learning device and relevant to
repayment for the Village Franchise-based business connectivity. community’s needs.
Phone Operator. model. Telecenters of
community
interconnectivity.
Local capacity building M-PESA agents. Village Phone Operators. Village entrepreneurs . Local companies Telecenter
Local entrepreneurial Local entrepreneurial Training educators. operators.
activity. activity Local entrepreneurial
activity.
Community
Technology Skills
Program
Embeddedness Partly embeddedness. Partly embeddedness. Partly embeddedness. Embedded in local Partly embeddedness.
educational structure.
Partly embedded.
Learning by the firm MFI, local M-PESA MFI, Village Phone Village community. Incorporated in its Telecenter operators.
through native resellers. Operators, telcos. Educational marketing. product life cycle (PLC). Research on the
capability Usage different from initial Exploratory design Field research Ethnographic research. ground.
design; adjustments were research.
made.
Time on the ground
Scalability Opportunities, also outside Scaling out and adaptable Scaling out and Scalable, replicability Scaling out and
BOP. in an environment with a adaptable and expansion. adaptable and
microfinance structure.. . replicable.
Worldwide potential. Worldwide potential.

21. DISCUSSION OF FINDINGS BOP
BUSINESS MODEL QUALITIES
• Value creation localized by the use of local
BOP-entrepreneurs.
• All cases contribute to ICT for development.
• The local community is often included in the
capacity building.
• The cases resemble situations of partly
embeddedness.
• MNCs learning from local partners and in
particular the BOP-community.

22. VALUE CHAIN SCHEMES

23. DISCUSSION OF VALUE CHAIN
SCHEMES
• In none of the cases full embeddedness was
reached and this is shown in the value chain
schemes;
• Participation of the BOP community mainly
focuses downstream in the direct contact with
the BOP-consumer.

24. RELATION BUSINESS MODEL &
STRATEGY, PARTNERSHIP AND
PRODUCTS & SERVICES

25. RELATION BUSINESS MODEL &
STRATEGY, PARTNERSHIP AND
PRODUCTS & SERVICES - II

26. DISCUSSION OF RELATION BUSINESS
MODEL & STRATEGY, PARTNERSHIP AND
PRODUCTS & SERVICES
• In this small sample a certain preference is
observed.
• A larger sample could alter this picture.
• The hypothesis that actually any
configuration of influence between the three
factors is possible still holds.
• The only key prerequisite is that the three
main factors should be aligned for success in a
BOP venture.
• Sustainability focus lies on “people” and
“profit”.

27. FINDINGS PRODUCTS & SERVICES
Products & services
Vodafone Nokia MTN NSN Intel Microsoft Unlimited
Potential - telecenters
M-PESA Village Phone Village Connection World Ahead Classmate
PC
Availability Particularly unbanked Anyone in the rural Anyone in the rural area Often in rural areas Rural areas as well in
people, actually anyone. area urban regions
Acceptability M-PESA agents as low- Village Phone Local village Complete solution for Local telecenter
profile entrance point. Operators as low- entrepreneurs as low- education operators.
profile entrance point. profile entrance point.
Works within existing Services should match
Research on non- educational models community’s needs.
literacy lead to product
improvements. Incentives for teachers.
Evaluations lead to
improvements.
Affordability Pay as you go. Special rates for the Monthly subscription but Relative affordable prize Affordable while ensuring
Operators, consumers pricing kept low. income.
pay a small fee. Funding for initial
deployment.
Awareness Educational marketing via Documentation and Training of the village Teacher training. Training for telecenter
M-PESA agents training of Operators. entrepreneurs. operator.
Teachers instruct the
Educational marketing Educational marketing children. Computer training.
via Operators. via village entrepreneurs.
Teachers train other
teachers.
Product & service Initial PPP funding Research centers. Research centers. Product development Research centers
development centers.
Actual usage is different Multidisciplinary Field research. Research on the ground.
from the intended usage approach Multidisciplinary approach.
Innovation blowback. Mostly embedded
Spending time on the Exploratory design Significant time on the innovation.
ground proved to be research. ground.
invaluable.
Ethnographic research
Innovation blowback. methods.

28. DISCUSSION FINDINGS PRODUCTS &
SERVICES
• Availability: often offered in rural areas.
• Innovation blowback.
• Disruptive innovation.
• Incorporation of clean technology was not really
visible.
• Affordability: focus on price performance.
• Acceptability by price-offering and ease of use of
services .
• Awareness: educating customers in product usage by
local BOP-entrepreneurs.
• Multi-disciplinary research and spending time on the
ground has become invaluable.

29. FINDINGS PARTNERSHIPS
Partnerships
Vodafone Nokia MTN NSN Intel Microsoft Unlimited
Potential -
M-PESA Village Phone Village World Ahead telecenters
Connection Classmate PC
Cooperation Partnership approach Microfinance and A franchising Mostly government Variety of partners.;
with dedicated project repayment model model partnering. here NGO
team. telecentre.org
Strong partnership Sometime Need to have
Significant degree of transformation of patience, results Protection of
autonomy for Setting up of a partnership to come not fast intellectual property
Safaricom. separate unit: Village employer-
Phone Company. employee Pulled out the
Backing of higher relationship. partnership with
management. Variety in maturity in OLPC (different
management skills Unequal risk opinion of the
Expertise of local between local sharing. strategy)
partners. partners.
Integrating systems
was an obstacle.
Actual usage was
different from the
intended usage.
Typology Private-social- private private-private- private-private- Mostly public private Varies from public-
partnership. private-social private partnership, private partnerships
partnership partnership sometimes multi- to private-private
stakeholder. partnerships to multi-
(multi stakeholder) stakeholder
partnerships.

30. DISCUSSION PARTNERSHIPS
• Unconventional partnerships are used for
engaging with the BOP.
• A variety of partnerships occur.
• MNCs need to be aware of various interests
when entering such a partnership.
• Sometimes a dedicated unit or organization
has been established.
• Issues that are affecting the health of
partnerships have been identified, categorized
as driving force factors, skill factors, input-
output factors, socio-cultural factors, systems
factors, and trust factors.