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Business model innovations for overcoming barriers in the base-of-the-pyramid market

: Gebauer, Heiko; Haldimann, Mirella; Saul, Caroline Jennings


Industry and innovation 24 (2017), Nr.5, S.543-568
ISSN: 1366-2716
Fraunhofer IMW ()
business model; business model innovation; base-of-the-pyramid market; business model design; expansion; diversification; replication

Many barriers must be overcome when entering the base-of-the-pyramid (BoP) market. Firms facing these barriers need to innovate new business models and reinvent existing ones to suit the BoP context. While previous literature has focused on the innovations of particular components of business models in BoP markets, we investigate the reconfigurations in the business model components that underpin the successful business model innovations. This study is based on multiple case studies in the water sector that we carried out in several different countries. Our findings suggest five business model innovations: (a) design, (b) renewal, (c) expansion, (d) diversification and (e) replication. Each business model innovation is a specific response to the barriers met in the BoP market and requires consistent configuration between its various components (i.e. value proposition, value creation and profit equation). These findings add, in two important aspects, to the academic realm of the business model domain: by contributing to the debate of business models in BoP markets and by advancing the configurational view of business models.