How can the private sector serve the unmet needs of the world’s poor while, at the same time, attracting new business opportunities and advancing the standard of living of those living in poverty? One approach to this, known as the base-of the-pyramid, is for the private sector to develop towards including the poor as both producers and consumers. In this thesis we focus on some critical questions in base-of-the-pyramid research. In cooperation with NGOs, development organizations and micro finance institutions, we collected a unique dataset of 143 firms operating in base-of-the-pyramid markets in a total of 105 countries. Their focal group of customers, employees, suppliers, and/or distributors have an average daily purchasing power of $2 or less. Building upon this dataset, we develop an empirically derived classification of business challenges for firms at the base-of-the-pyramid, and examine differences with high-income markets. We also extend and test the central postulate that embedding social and environmental value in a firm’s business model drives a firm’s financial performance at the base-of-the-pyramid. Lastly, we build a management support model, which can be used to develop profitable pro-poor business models. We provide managers and entrepreneurs with the questions to ask, the framework to help formulate answers to these questions, and the qualities to search for in the answers. To this end, we clarify and conceptually advance the strategic business model concept, which provides the multi-theoretical approach necessary for disruptive innovation and augments our understanding of competitive advantage.

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Keywords base-of-the-pyramid, business models, doing well by doing good, inclusive markets, management support model, organization and management theory, poverty alleviation, social issues in management, strategic management, strategy in low-income markets, survey data, sustainable firm performance
JEL Firm Behavior (jel D21), Measurement and Analysis of Poverty (jel I32), Firm Objectives, Organization, and Behavior: General (jel L20), Business Administration and Business Economics; Marketing; Accounting (jel M)
Promotor H.R. Commandeur (Harry)
Publisher Erasmus University Rotterdam , Erasmus Research Institute of Management
Sponsor Erasmus University Rotterdam (EUR) Erasmus School of Economics (ESE)
ISBN 978-90-5892-168-0
Persistent URL
Series ERIM Ph.D. Series Research in Management
Klein, M.H. (2008, October 3). Poverty Alleviation through Sustainable Strategic Business Models: Essays on Poverty Alleviation as a Business Strategy (No. EPS-2008-135-STR). ERIM Ph.D. Series Research in Management. Erasmus Research Institute of Management. Retrieved from