CK Prahlad is getting it wrong again (last time was when he sang euologies for Enron in Leading the Change). His new thesis, described in his book, The Fortune at the Bottom of the Pyramid (read the article), focuses on the 4-5bn people on earth who subsist on less than $2/day - or the $13trillion market!
With all noble intentions, CKP argues that this mass should be viewed not as victims or a burden, but as value-driven consumers, whose life can be made better, if large corporations design and focus their offerings to them, change their life-styles, and even help them with micro-credits to enable them to consume the goodies of life.
There are three biases which jar me, and which actually permeate the whole contemporary management literature:
1. that masses are primarily consumers, and not producers. Thus, their life becomes better, if they get to consume more, and not if they produce more. Compare Lijjat and, say, any biscuit manufacturer which targets the rural market - both focus on BOP, but with very different concepts of "making life better."
2. how much profit you make is more important than how you make that profit. CKP, like most management theorists, does not differentiate profits generated from, for example, selling more cigarretes/coke/candies, from those generated from selling milk/medicines/education.... I mean, a more profitable Playboy or mafia does not really make them more value-adding than maybe less profitable Amul, does it?
3. wealth-creation is same as making profits. Somehow, in management literature and theories, the concept of wealth has got reduced to just money. Rest - e.g., the community or the environment - have just become resources which need to be "exploited"...
but, well... some companies, even with their profit-motives, would end up, more by default than by design, creating wealth for people they serve. Two examples which come to mind are ITC e-Choupal, which not only is a channel for sales, but also for procurement of farmers' produce and for disseminating information; and Reliance Infocomm, which targetted the BOP profitably, but has also enabled people in that segment to be more productive...