Continuing the Conversation on Scale: Strategic Alliances to Leverage Existing Capabilities

Francisco Noguera — Tue, 18 Mar 2008 15:11:59 -0500

Moses' last week post raised the very interesting discussion about the concept of scale in BoP business models. I enjoyed the read and, while I agree with his thoughts about --and answer to-- the what is scale question, the article made me move on to one of my current research subjects, which is how to achieve and maintain scale.

Well, just this morning I came across a fine essay on this matter. Professor Christian Seelos from IESE was awarded the Golden Prize in the Essay Competition sponsored by IFC and Financial Times, with his essay Corporate Strategy and Market Creation in the Context of Deep Poverty. The paper is refreshing for the BoP dialogue, as it introduces an interesting framework for analyzing strategic alliances as an effective means for giving scale to BoP initiatives.

Through the presentation of two cases of alliances between companies and existing BoP initiatives, Professor Seelos shows companies may leverage their already existing capabilities and expertise to work with and provide scale to existing organizations at the BoP level, thus creating new markets or expanding those already in place. This approach is complementary to the traditional --and often challenging-- recommendation for companies to enter low-income markets by redesigning their value chains and business models to address the needs of a new base of customers.

The following two excerpts may provide a feeling of what the new research is all about.

(This post continues past the break; click "Read More" to continue)

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Continuing the Conversation on Scale: Strategic Alliances to Leverage Existing Capabilities