Fortune at the Bottom of the Pyramid, Revised and Updated 5th Anniversary Edition, The: Eradicating Poverty Through Profits [ハードカバー]

This is a difficult book to evaluate especially since it is built around an earlier one, reprinted in the original with cases and affidavits added. It is really two books, one successful and one weak. The original was published in 2004 and made a powerful case that challenged much of the conventional thinking about economic and social development. It wasn't perhaps as original as it claimed in its argument that the two billion people at the "bottom of the pyramid" were both an opportunity for enlightened capitalism, a source of energy and creativity, and a breakout opportunity to bootstrap business growth that would substantially reduce poverty. But it did draw attention to a way of thinking that got away from the top-down, infrastructure-focused programs that the World Bank and development agencies had funded with very limited success. It was part of a shift in view that saw the poor not as uneducated, lazy and needing wise guidance but as entrepreneurial, receptive to new ideas and able to build effective business initiatives on the ground.

If you (or your students - this is very much textbook type didactics) are unfamiliar with what has been happening in Asia and Africa via the combination of large companies like Coca Cola, Cemex and Unilever meeting the consumer needs of the poor and small domestic businesses thriving in market and job building, then this is still a good book and one that has many truly exciting examples in it. Since it was first published, microfinance has grown as a widespread and very effective model for stimulating and funding village entrepreneurship. Mobile phones have created new markets in handling remittances and managing cash among poor families. The basic case Prahalad made in 2004 holds up well today.
If you know the field at all, it is a disappointing book, not helped by the cumbersome expansion of the new material, little of which adds much. There are some major forces he neglects or finesses, especially the huge burden of corruption and rule of force of rich landowners, tribal leaders, and government. Water, transportation, and electricity are downplayed or ignored. The issue of replication of successes, generalizability of experience, and infrastructures is barely addressed. Too often, a single innovation is overstated in its impacts and general applicability; an example is e-governance in an Indian state which presents where the 2004 presentation shows a distinctly successful but limited "dexperimental" program. In 2009, it is standard practice -- Web site service and information access. The key question is what happened between 2004 and 2009. Did it grow? Become embedded in the social fabric? Stall? All we get is the 2004 material which includes a list of impediments to full adoption and impact. There's no follow up review for 2009. The book is a series of short stories, interesting in themselves but little more than moral fables. It is not the blueprint for transforming life at the bottom of the pyramid that is its claim and goal. I'd recommend Easterley's White Man's Burden as a far more comprehensive and solid coverage of the core issues, that is very compatible with Prahalad's view but has far more depth and Africa Rising, a book similar to this one and sharper in focus. The New India, written by one of the nation's most successful entrepreneurs, is much more comprehensive in its coverage of context and as practical in its recommendations for action. This book is no longer definitive and there are many more timely and relevant other published works.

The book is a harder read than the material warrants. It is best described as cumbersome. The writing lacks pace and flair. It's solid and free of tendentious academese or business popspeak, though. The details in the cases are well laid out. By coincidence, one of the examples came out of my own consulting work in the company, where I was a fairly close adviser to the CEO for ten years and Prahalad captures accurately how my simple idea was turned into a powerful program of social innovation. I mention this only because I can vouch for the reliability and responsibility of the book's description.

I am a great admirer of Prahalad, whose contribution to thought leadership in the management field has been very strong and sustained. But the task at hand is to assess the book as a book. I'd rate it as a four star college textbook, but only a two-star book for the general reader or for the specialist. I wish I could be more positive but at the end of reading it, I felt that I'd had to plough through it a little laboriously and that I did not get a sense of a crisp and clear analysis and set of lessons. I admire the writer and respect the work that has gone into the book. But in thinking about would I recommend it to my friends, colleagues and students, I reluctantly say no.

It appears that many of the reviews for this book are actually based on the original version. This review is based specifically on the hard cover 5th Anniversary Edition. The core argument, that money can be made given the proper business model while catering to the world's poorest, remains the same. In the updated edition, the original text remains intact but a few more chapters are added in the beginning and additional follow-up is provided for the original case studies.

Overall, I believe that this book delivers an excellent value. The book's binding and material are of high quality, and the inclusion of a CD with supplemental material (additional case studies) and videos is greatly appreciated. More importantly, the subject matter, while not quite revolutionary anymore, provides an insightful framework into a new way of doing business.

The term "emerging markets" seems almost like a clichéd catch phrase, but this book takes an honest and detailed look into what an emerging market is and what it takes to be successful in one. It offers a rare level of depth and perspective that acts as an enabler to ponder viability and strategy for potential services in the future. While I don't necessarily agree with the author on all points, especially the seeming omission of the high-risk nature and relatively hostile environments where the members of the bottom of the pyramid are found, the part that resonated most with me is the drive towards a common form of social justice. It should be noted that even Bill Gates said that it might not always be possible to make money serving the bottom of the pyramid, but a proxy to profits might simply be recognition.

A minor gripe I had with the book is that it didn't feel immediately accessible to me. While the overall structure is sound (first stating what the author believes are the keys to success in emerging markets, and later showcasing successful companies in various case studies that embodied the various points), the book reads like a matter-of-fact textbook and assumes you already have knowledge in this area. Also, the generous usage of acronyms was mildly annoying at times, but the index was useful in clarifying.

I don't think this book is supposed to be a specific guide to how to make your riches serving the poor, or how to capitalize on the growing ranks of middle class as predicted by the author. Rather, through varied tales of success, it dares us to dream.

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About the included CD:

The primary benefit of the CD is that it includes 3 additional case studies:
The EID Parry Story
Innovations in Energy: E+Co's Investment in Tecnosol
Citizen Centricity: E-Governance in Andhra Pradesh

For the additional case studies, text is provided (in PDF format), and amounts to about 100 additional pages. There are also short video clips ~4-5 minutes in length (in WMV format) for each of the original and additional case studies.

The videos are somewhat inconsistent in overall presentation and content, and appear to be produced by different people. If you're going to watch the case study videos, I recommend watching them first before reading as they only provide a cursory view of the case study material. I found that the videos helped by giving a summary of what's to come and put faces on the people being discussed. On a side note, interlacing artifacts are present in the videos, and voices can be hard to hear at times.

The CD is thankfully not DRM'ed so you can copy the contents to your hard drive or flash drive (in case you want to use it on a computer without a CD drive, or just for ease of use).
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Published System Requirements:

To view all the content on this CD, you will need to use a computer with one of the following operating systems and configurations loaded with the software listed below:

Operating Systems and Configurations
* Windows 2000 or Windows XP, with a Pentium(r) 4 processor at 1.3GHz or better, 256MB RAM memory, video card with 8MB dedicated memory, and 16x~ CD-ROM; or
* Mac OSX, with a G4 or G5 processor, 256MB RAM memory, video card with 8MB dedicated memory, and 16x~ CD-ROM.

Software
* Windows Media Player, Version 9 or newer. Available for download from Microsoft
* Adobe Acrobat Reader, Version 5 or newer. Available for download from Adobe

What more can be written about the wonderful book? Perhaps a meta-analysis of some of what Prahalad argues and demonstrates and some of the anti-government responses that seem to be gleeful in having their views that government can't solve problems supported might be helpful in gettting the author's message across. For one, of course the answer lies in ourselves, Dear Horatio, and not in starry-eyed government, but consider what government HAS done that mirrors/mimics some of the self-help solutions proposed and reported on by the author. Providing 'mini-loans' for self-sufficiency by a private entity is a great idea. But how different is that from the G.I. Bill that allowed hundreds of thousands of G.I.' to get college educations after WW II? Or consider low-interest mortgages provided to G.I.'s as an incentive toward self-sufficiency. Are these government programs that focus on investment any different from the loans and technical help private entities provide that Prahalad cites and explores in his book? You can have good government and bad government; you can also have good banks and bad banks, and if anyone in the U.S. doesn't think so at this point in time, they must have been in a coma for several years.

I believe this book provides its greatest inspiration in the author's metamorphosis from an academic who taught economic theory -- even economic theory that purportedly addressed the end to poverty -- to a 'hands on' in the trenches perspective. In other words, he realized that theory isn't enough. You have to know human nature, culture, and values. If you do, and Prahalad did, then an economic incentive program can be successful, regardless of the entity that sponsors the program. In other words, Prahalad's contribution is that he took it upon himself to understand people and how they respond individually and en masse to their circumstances.