BU491 Lecture Notes - Lecture 19: Outsourcing, Profit Margin
Document Summary
Class 19: serving the world"s poor, profitably: prosperity come to the poorest regions only through the direct and sustained involvement of multinational companies, multinationals can enhance their own prosperity in the process. Cheaper to market and distribute because the developing countries are densely populated: problem: distribution access, but not lack of buying power. Greater efficiency reduced costs: outsourcing operations to low-cost labor markets contain costs, outsourcing jobs to bop markets can enhance growth, since job creation ultimately increases local consumers" purchasing power. Strategies for serving bop (bottom of pyramid) markets: hard to master the challenges in the bop markets, so used to the high profit margin markets, solution: education, structural changes new division for the rural areas. Mnes might have to be in a mentor role or partner with local business development organization that can help entrepreneurs create investment and partnering opportunities.
