We work with companies to reach the four billion people at the base of the pyramid (BoP) – a large and underserved market opportunity.
By incorporating the BoP in business value chains, we help clients reach new markets and understand and identify new potential customers. When integrating the BoP as a commercial opportunity, inclusive businesses expand profits and create social benefit.
We work with businesses to foster:
Inclusive customer bases. We pinpoint ways to tailor products, services, and business and delivery models to large, underserved markets, opening up opportunities for unparalleled growth.
Inclusive supplier bases. We identify sourcing opportunities, assess risk, and adjust company operations to develop inclusive supply chains that can diversify risk and strengthen a company’s ability to operate in a country, while optimizing for pricing, security of delivery and/or non-dependence on imports.
Inclusive employment. We help companies integrate and train marginalized groups to bring them into the workforce.
Inclusive distribution channels. We identify and assess new, inclusive channels of distribution to underserved markets.
A leading energy company in East Africa was looking to enter the urban base of the pyramid (BoP) cooking fuel market in Kenya and hired Dalberg to conduct a comprehensive feasibility study and develop a business plan.
We began by examining what is needed for successful market entry: regulatory context, current and projected market dynamics, partnership opportunities, customer dynamics and willingness to pay, and potential distribution strategies to reach BoP customers. Through significant desk research and an energy diary experiment with those in urban slums, we compared prices of traditional fuels, tracked consumer behavior, tested product acceptance, and determined a competitive pricing point for cooking gas.
We then conducted a review of all operations and steps — of the product value chain from importation to customer delivery. This included analyzing players throughout the supply chain; their infrastructure as well as their technical and financial capacities to handle the product. Finally, we built a model to determine the financial viability of the project based on key profit drivers and risk factors. We also investigated the possibility of obtaining carbon credit to subsidize customers’ upfront investment in stove and cylinder equipment.
The company’s board approved the business plan we created. We also presented to a team at the International Finance Corporation (IFC) that decided to invest in this new project. The company started a pilot, which confirmed the viability of the business, and the pilot is currently being scaled across the nation’s major urban cities.
To learn more about our work, see our insights or contact:
Carlijn Nouwen, Johannesburg
Naoko Koyama-Blanc, Nairobi
Photo Credit: Flickr, SuSanA Secretariat