Business activities at the base of the pyramid (BOP) in South Africa

Abstract

This research was designed to provide insight into South African financial companies’ activities among the poor or the BOP (Base Of the Pyramid). South African businesses should build resources and capabilities with a strategic intent to create and exploit the traditionally under serviced markets while delivering goods and services that are of value. In doing so, managers, marketers and business leaders should view the South African adult population as households and not individual decision makers. The aim of this study was to determine the applicability of an equal partnership model for the BOP engagement in the South African economy. In the investigation of the equal partnership model, it was found that the participants (including the BOP as producers or consumers, business, local community members, nongovernmental organisations and local government) could derive mutual value. This mutual value can be described as the enhancement in growth for the business, raising the BOP out of poverty, involving the poor in the economy and boosting national economic growth (through job creation, tax revenue and investment). Findings of this research supported the aspects of resource commitment, experiential preparation, innovation and technology use in product or services together with mutual value creation for all partners (especially the poor). In addition, there was support for the different levels of risk taken by the partners, responsibilities expected from participants, the sustainability of the collaboration and the required depth of understanding of BOP circumstances. Bank managers responded positively to there being value at the level of the poor (such as profits, poverty alleviation and improved reputation). The collectivist nature of the poor in South Africa (in that the poor carry out financial decisions at the household level) was not established in this research and needs further investigation.