Global Village vs. Small Towns

The global village is no longer an abstract concept. We live in a world that is more interconnected than ever, including the BoP. The business networks that exist at every level of our economies have implications for the workings of enterprises in the global village — multinationals.

Multinationals would particularly benefit from understanding the networks that exist at the base of the pyramid. This is a class of people often not studied enough or well-understood. Some firms have been able to distinguish their products well enough to serve this segment, while others have not.

Authors Miguel Rivera-Santos, and Carlos Rufin, work from the International Business Review, April 2010, “Global Village vs. Small Town: Understanding Networks at the Base of the Pyramid,” make the distinction for those building business models and strategies for the BoP. An excerpt from their paper is below.

“We compare and contrast business networks at the Base of the Pyramid (BOP) and at the Top of the Pyramid (TOP), and analyze their implications for multinational enterprises (MNEs). We first identify the specificities of BOP environments in terms of competitive environment and institutions. Building on this analysis, we develop a series of propositions regarding the impact of these specificities on the structural characteristics of BOP networks, their boundaries, the characteristics of their ties, the diversity of their partners, and their evolution over time, as compared to TOP networks. Our analysis suggests that major differences exist between both types of networks along all dimensions and that these differences have important implications for MNEs active in BOP environments.”