Doing Business with the Poor: A Field Guide

This paper argues that developed markets are already saturated and there is a need for companies to reach out to the developing markets which constitute two-thirds of the world population and present a large long-term market opportunity.

Emphasizing on business and profitability, the paper presents a case for sustainable livelihood (SL) business, which 'promotes business with the poor in ways that benefit the poor as well as the company'.

The paper enumerates the factors in favor of SL businesses in developing economies:

• Need to break out of mature market sectors;
• Continuously improving framework conditions in developing countries;
• Faster and cheaper communications;
• Changing public expectations from corporations;
• Availability of newer and better partners;
• Mutual reinforcement of aid and investment.

The paper recommends developing win-win business models for developing markets by concentrating on three aspects:

• Focus on core competencies;
• Partner across sectors;
• Localize value creation.

The paper presents a set of guidelines to answer common business questions and concludes that the following are the prerequisite for successful venture into developing markets:

• Investing in research and development for new markets;
• Adopting an uncompromising approach towards profitability, even when adopting the SL business model;
• Interacting with local stakeholders;
• Innovating on spreading investment risks;
• Combining with local businesses and manpower and adopting existing distribution channels.