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Cooperation issues in
developing the BOP market


Kobus Smit
Anand Sheombar
Gilbert Silvius

Utrecht University of Applied...
6,776,034,371
World population
60
Bottom of the Pyramid
Bottom of the Pyramid
5,000,000,000,000
Estimated BOP market
The BOP & ICT Research Project

How can Multinational Information and
 Communication Technology companies (ICT
 MNCs) gain...
Why BoP as a Market?

   better meet their needs

   increase their productivity and incomes

   empower their entry in...
A Mindshift …
… also in Business


BOP 1.0                                                                                       BOP 2.0...
Three elements...
Research Questions

   What are the difficulties that ICT MNCs
    experience in their cooperation with partners
    in t...
Local
MNC                   for-profit
         Local       organisation
ICT
       Non-profit
      organisation
Partnerships are…


“an association between two or
   more persons, groups, or
organizations who join together
to achieve ...
Partnerships are…


   Important

   Have some advantages

   Need to be managed
The Research
– 10 Cases

   10 Cases
        M-Pesa
        Village Phone in Uganda
        Village Connection
      ...
The Research
– Sources of Evidence

   Interviews
   Archival records
   Documents
The Research
- Analysis



   USED basic analysis techniques of grounded
    theory



   NOT develop grounded theory
Findings
- Cooperation Issues

   Driving force factors
   Skill factors
   Input-Output factors
   Socio-cultural fac...
Driving Force Factors

   Driving Force factors refers to problems that
    occur as a result of misaligned fundamental
 ...
Skills Factors

   ICT MNCs tend to have unrealistic
    expectations about local skills and knowledge
    on a variety o...
Input-Output Factors

   Input-Output factors refer to difficulties that
    may arise as a result of unequal investments...
Socio-cultural Factors



    Difficulties related to social & cultural
     differences
System Factors

   Difficulties relating to the integration of
    systems, as well as the eventual use thereof
Trust Factors

   Includes issues related to expectation
    management as well as business desirability
    bias
Factors                       Examples of Relevant Literature
Driving force     Different foci on results versus process (...
The road ahead

   Limitations
   Future research
   Recommendations
Cooperation Issues In Developing The BOP Market - AMCIS
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Cooperation Issues In Developing The BOP Market - AMCIS

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The basic argument of this paper is that successful contribution of ICT to development goals is partly dependent on the nature of the cooperation between partners. Thus if there is a need to assess the contribution of ICT, then one needs to look further than just the basic quantitative measures and include cooperation issues as criteria for success. The purpose of the research reported in this paper was therefore to take one step closer towards a framework of cooperation issues in so-called BOP projects, specifically in the ICT arena, with the ultimate aim of developing a way to assess factors that may present a risk to the success of these projects. This framework could serve as the foundation for further research into developing a diagnostic instrument for this purpose.

Presentation by Gilbert Silvius for paper "Cooperation issues in developing the BOP market", AMCIS Proceedings , San Francisco, USA, August 2009.

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Cooperation Issues In Developing The BOP Market - AMCIS

  1. 1. Cooperation issues in developing the BOP market Kobus Smit Anand Sheombar Gilbert Silvius Utrecht University of Applied Science The Netherlands
  2. 2. 6,776,034,371
  3. 3. World population
  4. 4. 60
  5. 5. Bottom of the Pyramid
  6. 6. Bottom of the Pyramid
  7. 7. 5,000,000,000,000
  8. 8. Estimated BOP market
  9. 9. The BOP & ICT Research Project How can Multinational Information and Communication Technology companies (ICT MNCs) gain benefit from entering the Bottom of the Pyramid (BoP) market in a commercial successful and sustainable way? And what could be the opportunities in the BoP market for multinational ICT companies?
  10. 10. Why BoP as a Market?  better meet their needs  increase their productivity and incomes  empower their entry into the formal economy
  11. 11. A Mindshift …
  12. 12. … also in Business BOP 1.0 BOP 2.0 BOP as consumer BOP as business partner Deep listening Deep dialogue Reduce price points Expand imagination Redesign packaging, extend distribution Marry capabilities, build shared commitment Arm’s length relationships mediated by NGOs Direct, personal relationships facilitated by NGOs “Selling to the Poor” “Business Co-Venturing” Table 1: First Generation BOP Strategy compared with the new BOP (2.0) strategy (Hart et al., 2008)
  13. 13. Three elements...
  14. 14. Research Questions  What are the difficulties that ICT MNCs experience in their cooperation with partners in their efforts to reach the BOP market;  And more specifically, how could these observed issues be categorized
  15. 15. Local MNC for-profit Local organisation ICT Non-profit organisation
  16. 16. Partnerships are… “an association between two or more persons, groups, or organizations who join together to achieve a common goal that neither one alone can accomplish” (Mullinix, 2002:78)
  17. 17. Partnerships are…  Important  Have some advantages  Need to be managed
  18. 18. The Research – 10 Cases  10 Cases  M-Pesa  Village Phone in Uganda  Village Connection  Unlimited Potential  Public-private partnerships - Tapping into innovation  Public-private partnerships - ICT & media  i-Community in South Africa  World ahead (e.g. Classmate PC)  Digital Bridge  Communication for all
  19. 19. The Research – Sources of Evidence  Interviews  Archival records  Documents
  20. 20. The Research - Analysis  USED basic analysis techniques of grounded theory  NOT develop grounded theory
  21. 21. Findings - Cooperation Issues  Driving force factors  Skill factors  Input-Output factors  Socio-cultural factors  Systems factors  Trust factors
  22. 22. Driving Force Factors  Driving Force factors refers to problems that occur as a result of misaligned fundamental driving forces that shape the goals, purposes and process of ICT projects in developing countries, both from the perspective of the ICT MNC as well as that of local partners
  23. 23. Skills Factors  ICT MNCs tend to have unrealistic expectations about local skills and knowledge on a variety of topics ranging from IT skills and knowledge to managerial skills and knowledge.
  24. 24. Input-Output Factors  Input-Output factors refer to difficulties that may arise as a result of unequal investments by partners in projects, as well as unequal gains by partners from their projects.
  25. 25. Socio-cultural Factors  Difficulties related to social & cultural differences
  26. 26. System Factors  Difficulties relating to the integration of systems, as well as the eventual use thereof
  27. 27. Trust Factors  Includes issues related to expectation management as well as business desirability bias
  28. 28. Factors Examples of Relevant Literature Driving force Different foci on results versus process (Kumar et al., 2005) factors Technocratic approach of MNCs (Chio, 2005) Over-emphasis on "top-down, closed access and 'expert' driven" research (Gurstein, 2005) Bottom-up approach that builds on indigenous knowledge (Simanis et al., 2008b) Failure to continuously monitor the relationship (Seelos and Mair, 2007) Skill factors Becoming and staying aware of the variety of resources, e.g. Prahalad (2005), Simanis et al. (2008a) and Jenkins (2007) Input-Output Sustainable business (Prahalad, 2005, Simanis et al., 2008b) factors Business partnerships related to intellectual property and patents (Matson, 2006) Socio-cultural Social embeddedness (London and Hart, 2004) factors Culture shock (Oberg, 1960, Marx, 2001) U-curve theory e.g. Lysgaard and (Ward et al., 1998) Systems factors Integration of systems (Butt et al., 2008) Trust factors Trust as a relevant factor (Das and Teng, 2001). "Social desirability bias" (Randall et al., 1993)
  29. 29. The road ahead  Limitations  Future research  Recommendations

The basic argument of this paper is that successful contribution of ICT to development goals is partly dependent on the nature of the cooperation between partners. Thus if there is a need to assess the contribution of ICT, then one needs to look further than just the basic quantitative measures and include cooperation issues as criteria for success. The purpose of the research reported in this paper was therefore to take one step closer towards a framework of cooperation issues in so-called BOP projects, specifically in the ICT arena, with the ultimate aim of developing a way to assess factors that may present a risk to the success of these projects. This framework could serve as the foundation for further research into developing a diagnostic instrument for this purpose. Presentation by Gilbert Silvius for paper "Cooperation issues in developing the BOP market", AMCIS Proceedings , San Francisco, USA, August 2009.

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