“Bottom of the Pyramid” seminar held at FMS

FMS , Delhi organized a seminar on the concept pioneered by Prof C K Prahlad – The Bottom of the Pyramid- on “Local Entrepreneurship and Global Markets: Corporate Outreach to the Small Entrepreneur.” in association with the Centre for Civil Society. The panel comprised of Mr. Pradeep Kashyap, Managing Director, Marketing And Research Team (MART) Architect of ‘Project Shakti’ of HLL; Mr. Arjun Uppal, Consultant ICICI (Ex-MD, Mother Dairy); Mr. William Bissell, CEO, FabIndia and Mr. Sharad Agarwal, Project Manager, Hindustan Latex Foundation addressed the audience comprising of academia , business school students and others. Mr.Sachin Rao from Centre for Civil Society who has extensively worked with Prof. C K Prahlad and has worked on the famous e-choupal case of ITC moderated the discussion.

Mr. Pradeep Kashyap from MART, widely considered to be the foremost authority on rural marketing in India, spoke on rural distribution of HLL through project Shakti. He analysed the various aspects of distribution in rural areas that HLL employed and pioneered through Shakti Ammas and the social implications. He also gave an introduction on the new model that the company would be introducing by giving training to young men in rural areas to sell various products in a branded bicycle.

Mr. Sharad Agarwal from Hindustan Latex Limited spoke on the national NGO formed by his organization with the aim of providing innovative solutions on HIV/AIDS. He described the challenges being faced by HLL while marketing contraceptives to rural India and how the company is contributing to the social empowerment and health and well being of the society.

Mr. Arjun Uppal spoke on fresh produce value chain and challenges of integrating farmers with small land holdings, “We need to create a new class of market actors who will focus on small holders and provide services to them. This will happen such that both farmers and service providers find incentives in the new economic exchange that are profitable to both sides and are sustainable based on service charges they can levy on producers.” He opined that it was worth attempting integration of small holders into the markets because of fair price, efficiency improvement, quality improvement and sustainability. He felt that the optimal organization format would involve the Public Sector, Private sector, NGOs, and Individuals.

Mr. Bissell, CEO FabIndia gave an extempore on his radical business model. FabIndia has 30 odd stores, with branches in Rome and Dubai as well. It has 700 procurement centres. FabIndia’s turnover has grown five fold in the last five years. Their weaver employees have also increased proportionately. He opined that to be an entrepreneur, you need to identify the opportunities and know how to “beat the system”. He cited how as a small player, he was charged higher rates in Dubai malls to subsidize bigger local players. He set up shop opposite the mall and expects consumers who intended to visit the mall to flock there. He felt that good social responsibility and profits go hand in hand. Companies can negotiate with credit players more efficiently than artisans. He described how the weavers have become stakeholders in the company. They have seen the shares they bought at Rs.100 go up to Rs.852 at today’s prices. In fact, for two years there were no sellers of the shares! He defined an entrepreneur as “one who converts capital more efficiently than others. In fact, this is a national and social responsibility as capital is scarce.”

The interactive session which followed saw the full house of Delhi University post graduate and under graduate students engaging in lively discussion with the panel with questions ranging from role of India Inc in Rural Areas on employment generation to the practice by companies to champion corporate social responsibility through the rural schemes and change their existing image. Mr. Bissell warned us that just as poultry in India no longer tastes good as it is made as per international norms, if vegetables are also grown using chemicals, India could lose a potential source of competitive advantage. Mr. Kashyap spoke of how employment generation can only be a by product of corporate activity. ‘Corporate India has not added to the eighteen million jobs it created last fifteen years.’ The audience, which had a majority of MBA students, was addressed by Mr. Kashyap- ‘B School students all over India are jobseekers, not creators.’ The students answered that the efforts like Entrepreneurship Cell at FMS with the National Entrepreneurship Challenge had already addressed this paradigm. The panelists were unanimous in their opinion that the ultimate goal of an entrepreneur is to generate profits and what matters while formulating a business plan is Return on Capital Employed and everything else including job creation comes as byproducts during the process. Mr Sachin Rao who summarized the discussion said that the benefits to the bottom of the pyramid comes only through the active participation of the India Inc in exploring the potential of bottom of the pyramid however employment generation comes as a by product of this exploration.

The seminar was an initiative of the Media Relations team in FMS and plans are on to organize more such events in FMS , Delhi University, which would stimulate students to think differently and on the road less traveled, the one for the lesser privileged.