Business model innovation : the South African BoP canvas

Abstract

This Master Thesis is a contribution to the ongoing discussion in the academic world surrounding the Bottom of the Pyramid as an un-captured growth opportunity for business operations. Although the concept has increasingly gained attention over the last decades, to date few Bottom of the Pyramid initiatives by multinational companies (MNCs) have been successful. This work should be read by international business managers seeking to operate profitably while diminishing poverty in low-income markets. Literature review shows that the Bottom of Pyramid presents attractive business potentials for MNCs, yet highlights that traditional business approaches are inappropriate methods for capturing this market and thus need to be innovated by breaking free from established mind-sets that have constrained incumbent firms to date. Academic literature fails to provide appropriate tools and frameworks for capturing the potential at the Bottom of the Pyramid. The question of how multinationals should conduct business in the Bottom of the Pyramid lays the foundation of this Master Thesis. Utilizing Osterwalder and Pigneur’s (2010) Business Model Canvas as a starting point, relevant Bottom of Pyramid literature is reviewed. Secondly, empirical data, conducted in a qualitative manner in the form of eight in-depth case studies, is used to test these findings specifically in terms of the South African market. By comparing the original business model elements in a ToP context with BoP literature and empirical findings, the necessary alterations needed to tailor Osterwalder and Pigneur’s (2010) Business Model Canvas to suit the South African BoP market are discovered. The final result of this Master Thesis is the new, innovative business model framework, which illustrates and guides companies in the adoption of traditional Top of the Pyramid (ToP) business models to low-income segments based on B2B or B2G cooperation. The South African Bottom of the Pyramid Business Model Canvas should be used as a tool for entering and operating in the market successfully.