Creating Value for Multiple Stakeholders: Sustainable Business Models at the Base of the Pyramid
After studying the business models of 55 social enterprise organisations operating in the Philippines and Indonesia, Faculty of Business and Economics researchers are working to identify what works when it comes to addressing poverty and other key social and environmental problems.
Through their research, the Asia Pacific Social Impact Centre's Jodi York and Krzysztof (Chris) Dembek, together with Management and Marketing's Professor Prakash Singh, have identified nine distinct business models used by social enterprise organisations working at the base of the pyramid (BoP) - the socio-economic term to classify the world's poorest people.
The researchers have classified the business models by their activities and structure to create a BoP business model matrix, explaining how the nine identified models use different activities, value approaches, value creation logics, value sources and capturing mechanisms to benefit different stakeholders.
They have found that the models working to reorganise how BoP communities and the systems around them operate have great value creation potential as they combine three distinct value creation logics to provide comprehensive solutions to complex problems.
The initial field research into the 55 social enterprises was undertaken for the German development agency GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH).
With the rise in the number of social enterprises working to address poverty and other social and environmental problems, the business model matrix will help identify best practice in the field.
It can also be used by governments and other funding bodies when deciding on the value of a social enterprise, as well as to identify the type of help that should be offered.