Weaving a strategy for a base‐of‐the‐pyramid market: The case of Grundfos LIFELINK

Abstract

AbstractThis paper explores the development of strategies by multinational corporations (MNCs) for serving markets at the base of the economic pyramid (BoP). MNCs play an important role in meeting the Sustainable Development Goals (SDGs) formulated by the United Nations (UN), as they are responsible for one‐third of the total economic output and the majority of world trade. However, little is known about how MNCs contribute to meeting the UN SDGs. Through an in‐depth analysis of how Grundfos, a Danish MNC and a leading supplier of pumps, developed a solution for supplying fresh potable water to rural villages in Kenya, we investigate some challenges MNCs face and demonstrate the importance of intimate engagement with the context of strategic action. Tackling sustainable development issues in the context of BoP markets represents a distinctive challenge to MNCs, which often do not have a good understanding of BoP environments. Drawing on contrasting ideas of strategy as navigation or wayfaring, we highlight the dangers of trying to impose existing strategies and business practices in market contexts, which are fundamentally different from existing ones. We add to the existing research by exploring how such frameworks interact with strategizing processes in a novel environment for the operating firm. Specifically, we explore the interrelatedness between planned and emergent approaches to strategizing in BoP market environments.