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Über dieses Buch

This book presents an empirical investigation of the efforts that multinational pharmaceutical companies take in order to find a business model that allows for a profitable access to the Bottom of the Pyramid (BoP) markets. The Bottom of the Pyramid in Africa is frequently mentioned as an attractive market due to its sheer size. Yet most companies struggle to access it because of the low price level, difficult physical market access and challenges when it comes to payment.

More specifically, the book investigates the following business model-related questions: Do pharmaceutical companies provide products that meet the needs of the BoP? What characterizes the value generation of the company? What revenue model leads to a profitable business, and what role does a network of partners play in the business model?

Findings reveal that there is no ‘one-size-fits-all’ answer to these questions. Providing continuous availability, affordability at a good quality of goods and services, creating health awareness, as well as localizing business to achieve a level of inclusiveness are essential prerequisites for success. In the last chapter this book provides a business model prototype that accounts for these key success factors for business at the Bottom of the Pyramid and points to further research topics.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction

Abstract
Sub-Saharan Africa (SSA) is one of the most dynamic regions in the world. This is why companies worldwide have increasingly stepped up their activities on the continent. At the same time, however, Africa is the continent with the highest share of poor people worldwide. Global poverty remains a major issue with 10% of the world’s population living on less than USD 1.90 (PPP) and 26% living on less than USD 3.20 (PPP) per day in 2015. In Sub-Saharan Africa, the shares are even higher, with 41% (421 m people) and 67% (678 m people), respectively, in 2017 (World Bank n.d.). The high absolute poverty numbers lead to a rising interest in the market segment of the poor population, the so-called Bottom of the Pyramid (BoP). This book will investigate the question of how multinantionl pharmaceutical companies can profitably address the Bottom of the Pyramid population in Sub-Saharan Africa.
Philipp von Carlowitz

Chapter 2. The Bottom of the Pyramid Concept

Abstract
The Bottom of the Pyramid concept is not that old but has undergone some significant discussion and change in perspective over the past 15 years since Prahalad and Hart (1999, 2002) first introduced the concept. During that time the understanding of what constitutes the BoP and how companies and scholars perceive it has changed from a pure market/customer perspective to a partnering perspective and has eventually gone beyond pure business topics. This chapter will first define the Bottom of the Pyramid segment before discussing the development of the BoP concept in literature and providing a critical assessment of the state of the BoP discussion.
Philipp von Carlowitz

Chapter 3. Business Models in the Bottom of the Pyramid Context

Abstract
How can one generate profit while improving the situation of the BoP population? This question and the various economic opportunities at the BoP have pointed researchers and practitioners toward a systematic investigation of business models in the context of the BoP. As BoP markets exhibit divergent income structures and distribution systems compared to high-income and developed markets they require new business approaches (Dodgson et al. 2014; Ricart et al. 2004). Articles on the subject (Bocken et al. 2014; Boons and Lüdeke-Freund 2013) contain several narrative elements but leave unresolved how business model elements are chosen, for what purpose, and what lessons can be learned from these examples. There is still no consensus on how resources at the BoP need to be configured in order to create value since few organizational templates exist (Seelos 2010). This chapter looks at success factors and challenges of business models aiming at the Bottom of the Pyramid.
Philipp von Carlowitz

Chapter 4. Political and Macroeconomic Situation in Sub-Saharan Africa

Abstract
Africa consists of 54 very heterogeneous countries from a geographic, ethnographic, economic, religious, and political point of view. Of these, 48 countries are in Sub-Saharan Africa. Many countries are considered to be growth markets. Yet they exhibit political and economic instabilities. Also, the share of the poor population, the Bottom of the Pyramid, is large in nearly all countries, be it in rural or urban areas. Doing business conditions are improving in many countries but from a low base. So business circumstances are difficult and different from developed markets which needs to be reflected in a business approach, especially for the Bottom of the Pyramid segment.
Philipp von Carlowitz

Chapter 5. Healthcare System and Pharmaceutical Market in Sub-Saharan Africa

Abstract
Healthcare coverage is one of the 17 Sustainable Development Goals (SDGs) of the Agenda 2030 of the United Nations. The situation in SSA is bleak: There is a lack of coverage and quality of service and finance. A key part of a functioning (basic) healthcare provision is the availability of medicines. Local production and distribution are the main challenges in the pharmaceutical industry making medicine availability difficult. The majority of drug consumption via out-of-pocket spending is found in the BoP population, especially in the rural areas. This chapter will examine the situation in terms of healthcare coverage, the role of out-of-pocket-spending, the situation of the local pharmaceutical industry and the role of BoP spending. It finds that gaps are pertinent in the existing systems and provisions. This has impact on the business model approach.
Philipp von Carlowitz

Chapter 6. Pharmaceutical MNCs Addressing the BoP Market: Empirical Analysis

Abstract
This chapter consolidates all insights from the previous chapters and moves the investigation to the empirical level. Based on expert interviews of managers from multinational pharmaceutical companies the business model approach to the BoP segment taken is analyzed and compared to the theoretical findings in literature.
Philipp von Carlowitz

Chapter 7. Conclusion, Conceptual Framework, and Future Research

Abstract
In the previous chapters, the insights of the literature on business models for the BoP markets and the results of the empirical analysis on multinational pharmaceutical companies in SSA were presented. The results of the literature and empirical analysis are contrasted and scrutinized with regard to the research question. A conceptual recommendation for a business model approach to the BoP in SSA for multinational pharmaceutical comapnies will be provided.
Philipp von Carlowitz
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