23. Why have multinational corporations not dedicated their attention to the "bottom of the pyramid" markets?
to the "bottom of the pyramid" markets?
Many multinationals are still ruled by their "dominant logic" which dictates that there cost structure and business models cannot serve those who live on a few dollars per day (their products are too expensive); that the poor do not have use for products/ services sold in developed countries (their output is irrelevant); those only developed countries appreciate and are able to afford innovation; that developing countries markets are not critical for the long-term growth or vitality of the business, and that their need to "streamline" and focus on core businesses makes "fringe" markets or product lines irrelevant or dangerous to their own bottom line.
In sum, with notable exceptions, the global business community seems, at times, to lack the capacity to understand these markets, the frameworks and incentives to shift their attention away from traditional business models, and often the tools to capture opportunities. Too often, multinational corporations develop only a limited awareness of complex ecosystems, thus relegating 'Bottom of the Pyramid' markets to the realm of corporate social responsibility initiatives.