With increases in the populations of emerging and developing countries, primarily in Asia and Africa, the world's population has already reached seven billion. In particular, people falling under the category of the Base of the economic Pyramid (BoP) constitute a huge market involving 4.7 billion people and 5 trillion dollars1. Many companies are making efforts to promote BoP business with the main aim of either "acquiring a share of the huge BoP market that already exists" or "acquiring a share of an even more massive market (5.5 billion people and 70 trillion dollars as of 2030) that is expected to develop when the incomes of people in the BoP segment increase and they come to fall under the Middle of the economic Pyramid (MoP)."
The BoP is defined as the socioeconomic segment of people who live on annual incomes of less than 3,000 dollars. The MoP refers to the segment of people whose annual incomes are between 3,000 and 20,000 dollars and the Top of the economic Pyramid (ToP) refers to the segment of people with annual incomes of 20,000 dollars or more.
In 2009, which is the "first year of BoP business" in Japan, Japanese government organizations as well as international agencies all either began or expanded initiatives to promote BoP business. These support programs have led to a significant increase in the number of Japanese companies making the first move to engage in BoP business.
Despite their efforts, many Japanese companies have not been able to create a sustainable BoP business easily. Nomura Research Institute (NRI) considers that such companies must address the following three challenges. They are: (1) from the perspective of customers, integrating BoP business into a company's portfolio strategy for a target country; (2) from the perspective of products and services, strengthening the attitude of "Genchi Genbutsu (Local immersion and identify needs)" and (3) from the perspective of a business model, aiming to improve the profitability of BoP business.
To create a BoP business that will grow, it is necessary to incorporate the following three elements in the flow of new business development. They are "impact" at the concept development stage, "insight" at the product development and business planning stage and "dynamism" at the business promotion stage.