Alberto Nel R.

Mateo V
O0B

Chapter 4: The Ecosystem for Wealth Creation

Amazon Reference:
http://www.amazon.com/Fortune-Bottom-Pyramid-Eradicating-Poverty/dp/0131467506

Quote:
“The private sector, in its desire to leverage resources and gain market coverage, will invent
new systems depending on the nature of the market. “

What I Expect to Learn:

I expect to learn the ways on how wealth is created at the BOP.

Review:
In this, chapter, it is said that there is a way in order to create wealth. I remember a topic that
also treats wealth as something that can be created or destroyed. In this chapter, the wealth that is to be
created will be coming from the BOP. We would wonder if it is possible. According to the topic that I
had read a paulgraham.com, wealth is created when people create something that has value for others.
Thus, it simply means that wealth is something that people wants. Now, the question is how we can
create something that people in the BOP wants. That is where this chapter concentrates. It emphasizes a
certain method as to which wealth can be created in the BOP.

It states that there must be a market-driven ecosystem wherein it will be compose of different
players that are interdependent to each other. It means that each one has a role to play. An example is
the HLL, a Unilever subsidiary, which was able to cater the needs of the BOP through their products
and was able to remain at the profitable level. Through their own structure of ecosystem, they were able
to create a win situation for all. Thus, they have created wealth on those people by educating and
building their trust among themselves. They also help those people to realize that there is a win-win
situation between them and those companies. They can gain employment and access to products and
services and at the same time, learning to gain local entrepreneurship skills. The benefits are not only
seen on the BOP but also on all other players in this ecosystem. It's for the reason that as more people
were joining the market ecosystem, the more demand is created that results to more production. Thus,
profitability increases. Therefore, those involved from the start up to the end of the product cycle earns.
It only shows that wealth is created by all of them to which it is also distributed to all of them at the end
of the day.

What I have learned:

• Benefit of Market-driven ecosystem
• Wealth created by the ecosystem and their beneficiaries

Integrative Questions:
•What is wealth?
•How can people create wealth?
•What kind of system is proposed to create wealth among BOP?
•What is built on the people in BOP that participates in the system?
•How companies do benefit from the increase of people joining the system?
Chapter 5: Reducing Corruption: Transaction Governance Capacity

Amazon Reference:
http://www.amazon.com/Fortune-Bottom-Pyramid-Eradicating-Poverty/dp/0131467506

Quote:
“The private sector, in its desire to leverage resources and gain market coverage, will invent
new systems depending on the nature of the market. “

What I Expect to Learn:

I expect to learn about how is corruption can be lessen to help create market-driven system.

Review:
In this, chapter, it is said that corruption is one of the most critical problems that are not always
being talked about. It may be for the reason that it is already a well known issue that people are already
tired of hearing all of those things over and over again. On the contrary, the author wants to tell us that
we should find a way to eradicate it or if not, at least lessen it. Prahalad defines corruption as
something that is opaque in the eyes of the observer. That is why there is a high level of difficulty as to
how it can be lessen or eradicated at its best. We might be thinking that there is something that is
similar to this scenario. It is the way that transactions are also sometimes opaque to us that we can't
understand it. It is like this especially when there are discrepancies on the data. The author might also
have thought of it that is why he had an idea as to how corruption may be possibly eradicated and at the
same time technology having a role on it.
He proposes that Transaction Governance Capacity (TGC) could be a way to execute the idea. It
only aims to make the processes in a certain system be transparent and fair to all parties. Prahalad had
mentioned that one of the reasons as to why poor countries are poor because they have trapped assets
that they can't convert into capital. If these assets are considered, those countries might also be labeled
as rich. Thus, there is a need to make those trapped assets be on used. An example is the eSeva in
Andhra Pradesh. This is an e-service that helps the transactions in their government be more accessible
and transparent to their people. Thus, as a conclusion, building TGC is not only for the government but
also for the firms. If this is combined with the ecosystems that the large firms can create which also
increases the TGC. Therefore, those two can change the TGC of a country with the help of the digital
technologies that we have. Thus, ensuring the reduction of corruption.

What I have learned:

• Transaction Governance Capacity
• Basic Corruption concepts

Integrative Questions:
•What is corruption?
•Why corruption is rarely being talked about?
•What is the proposed solution of the author to eradicate corruption?
•What is the eSeva in Andhra Pradesh?
•What are the needed components to ensure the reduction of corruption?
Chapter 6: Development as Social Transformation

Amazon Reference:
http://www.amazon.com/Fortune-Bottom-Pyramid-Eradicating-Poverty/dp/0131467506

Quote:
“Our best allies in fighting poverty are the poor themselves.“

What I Expect to Learn:

I expect to learn about how can development serves as a social transformation.

Review:
In this chapter, we already have the knowledge that the BOP is a viable market for the firms to
tap. We also know that by treating those at the BOP as markets, we can be able to reduce the level of
poverty. It can be done by means of cooperation between NGOs, community groups and MNCs and
local companies becoming business partners. Its benefits are clearly seen at the economic aspect of
perspective wherein those BOP people can gain access to the global products and services that are
normally offered at the top of the pyramid. They also help the companies to earn a huge amount of sum
through the large and stable demand coming from them. We might be wondering if all of the benefits
are only on the economic side. The answer is no, it is not only the economic aspect where the benefit is
present. There is also benefits on the social side of it. The very obvious is the self-esteem and self-
respect that those people in the BOP had gain through having purchasing power and having the feeling
of belonging by which is shown to them by the companies that affirm their capabilities as
entrepreneurs. Another is one of the most crucial thing that makes all of these ideas succeed. It is the
identity that those people now have that they don't at the past. It is for the reason that in the past times,
they are only treated as burdens for the country and not even a market to have business with. Therefore,
they are deprived of the goods and services that must be available to all at the first place. In accordance
to the idea of Prahalad, the alleviation of the poor will most likely involve education and knowledge.
That education is more of the practical one. An education that will produce immediate outputs by
gaining the needed information and knowledge on the tasks that needs to be accomplish. In this idea,
the result is also a multiplier but not like in corruption, it is a positive multiplier. A multiplier of more
knowledgeable and literate people that can do more productive work and be able to present a better
quality of products and services that they themselves can also acquire. Thus, creating transformation in
our social aspect particularly in our society itself.
These effects may also branch out beyond the given two aspects. We should only remember that
these effects are all pointing towards social transformation where there will be no more pyramid but a
diamond instead. It is a diamond wherein the huge number of population is now on the middle class
that will only mean a better quality of life for the most. The only challenge here is that are those people
and organizations which should be involve in doing so have the vision of accomplishing this kind of
idea.

What I have learned:

• Benefits of BOP being a market
• Effects of the development of BOP
Integrative Questions:
•How can we reduce the level of poverty?
•What aspect does the benefits of BOP as markets is clearly seen?
•What is the crucial thing that makes this idea possible?
•What are the things that will be involve in the alleviation of the poor?
•What does the diamond signifies as against the pyramid?