Building Sustainable Business Models in the BoP: Evidence from Social Enterprises in East Africa

Abstract

Globally, an estimated 4.5 billion people live on less than US $8 per day, in the ‘base of the pyramid’ (BoP). The last twenty years have witnessed growing engagement with the BoP by business, with it argued that a fortune awaits those firms providing needed products and services to BoP markets. However, other actors are also working in and with the BoP, including social enterprises. The activities of such social enterprises in the BoP remain under-researched. Scholars have identified a particular need for further study of how social enterprises in the BoP interact with their ecosystems to achieve their objectives. Drawing upon case study research with 10 East African social enterprises, this paper responds to this need. It sheds light on how social enterprises work with ecosystem actors to overcome challenges of doing business in the BoP, and to design and build community-centred business models. We introduce a multi-stage process model of learning, engaging, and harnessing to describe these activities of social enterprises. In so doing, we contribute to multiple literatures. We add to still limited work on the activities of social enterprises in the BoP. We provide novel empirical insights, and elaborate a theory of how social enterprises interact with their ecosystems to build sustainable community-centred business models. We further contribute to hitherto limited scholarship on social entrepreneurship in Africa. Additionally, Africa remains underrepresented in BoP research, with our study contributing to addressing this lacuna. Finally, our research has practical implications for social entrepreneurs in Africa and elsewhere looking to design and build community-centred business models.