Challenges of Companies Operating in BoP Markets. Case of Albania

Abstract

Near a decade ago, business academics C.K. Prahalad and Stuart Hart presented in their working paper a revolutionary concept of doing business in the world’s poor markets known as the Bottom of Pyramid (BoP). These authors made the observation that about 4 billion people remain excluded from the system of the global economy. The world is experiencing a shift of power from the traditional industrialized countries to the so-called developing countries, already home to 80% of the world’s population and with a combined GDP that surpasses that of the rich countries. The BoP concept encourages corporations to take into consideration this segment of the population, and consider this market as an opportunity to explore the untapped potential it presents. In this context, the BoP market represents a multibillion-dollar marketplace, which still remains unexploited from multinational or local companies. Maturing markets, floundering business models and insecurities about the characteristics of future customers, could be some of the reasons why corporations should pay attention to the BoP market. The market opportunity here is not just the wealthy few in the developing world, but the vast number of aspiring poor who are joining the market economy for the first time. The purpose of this paper is to review the existing literature on BoP and show some of the principles and techniques that Albanian companies might use in this segment of the market and how they cope with these principles. DOI: 10.5901/ajis.2013.v2n9p635