Last fall, Business Strategy Review published an interesting piece by Juan Luis Martinez and Maria Carbonell called "Value at the Bottom of the Pyramid."  The article, available on the journal’s web site, warrants some serious discussion, especially in light of the recent profit versus social motives debates for businesses targeting the BoP.  I’m specifically thinking about microfinance institutions, where this has received a lot of media attention and heated discussion (Forbes and BusinessWeek both recently published a series of articles, available in the NextBillion Newsroom).

Martinez and Carbonell’s piece, however, is not part of the polemical debate at all. They set out to refute common misconceptions about doing business with the BoP.  They also propose that, by shifting perspectives about the capabilities of poor consumers, and by integrating openness to caring about society, companies can enhance their value chains.

The authors use the Colombian energy company Codensa (a model that NextBillion has covered in detail) as an example to illustrate how a need to create greater shareholder value, a willingness to explore informal markets, and a commitment to tailoring products to BoP needs combined to fill a major gap in products and services available to millions of low income households.

The only trouble with this argument is that nowhere does the Codensa example really prove Martinez and Carbonell’s assertion that there are two “tracks” to keeping a business going in the BoP market segment: solid business performance and social action.  Nor does it necessarily support the theory that “the two tracks… create a forward-moving momentum for the company, one that enhances the concept of doing business (making a profit) with doing good (making a difference).”

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