Evaluating supply chain constructs in the base of the pyramid environment

Abstract

Fostering business activities has been advocated as a more appropriate strategy, replacing aid-based initiatives for achieving sustainable economic development of underprivileged societies. However, the little familiarity with the working of supply chains serving the respective markets is obstructing our efforts to devise suitable strategies to promote corporate activity in underdeveloped areas. The paper aims to critically evaluate applicability of established supply chain management related constructs in base of the pyramid market setting. An interviewer-administered questionnaire was used to collect data in 60 face-to-face interviews, with buyer–supplier dyads, focusing micro-entrepreneurs in Pakistan. We used partial least squares algorithm (SmartPLS 3) to fit a structural equation model to the data. Communication emerged as prime driver construct linked to tactical purchasing, technological integration with customers, technological integration with suppliers and supply chain partner development. The paper, while extending largely formal market–focused supply chain literature to informal settings, enriches our understanding of related phenomena in base of the pyramid markets. Findings of the paper will not only assist practitioners in grasping dynamics of business-to-business markets at the base of the pyramid but will also aid in understanding causality of certain supply chain management practices. The paper is among first contributions to evaluate business-to-business interactions among micro-entrepreneurs in the base of the pyramid markets employing a survey methodology.