The Base of the Pyramid (BoP) is a socio-economic designation for the 4,5 billion individuals, primarily living in developing countries, whose annual per capita income is below $3,000.
The BoP is also used to describe a business strategy that focuses on meeting this segment’s basic needs by engaging them as consumers, producers and entrepreneurs – this is often termed “inclusive business”.
As growth in mature markets begins to stagnate, many businesses are now turning to the BoP market as an untapped source of growth. Even for basic-needs products and services such as food, water, energy, health, IT and transportation, the market potential has been estimated at a value of $5 trillion.
The telecommunications and micro-finance industries have been the first to see tremendous success from these ventures. Many large businesses are leveraging their BoP strategies to simultaneously grow their businesses while playing a role as good corporate citizens by helping to meet the basic needs of the BoP. Firms such as Unilever, Danone, Microsoft, Vodafone, Nokia, Schneider Electric and Philips have been quite successful in applying these strategies.