Idea in Brief

The Problem

Multinational firms’ socially beneficial ventures in low-income markets need to earn profits if they’re to command corporate resources, but operating in the black is harder than it looks.

The Solution

Companies can use the authors’ “opportunity map” to design and undertake ventures at the bottom of the pyramid that match their capabilities and financial expectations.

The Details

The map sorts ventures according to cost and complexity by analyzing two key challenges in selling to the poor: changing consumers’ behavior and changing the way products are made and delivered. The map can encourage companies to forgo overly ambitious, unsustainable projects and start with smaller ones that generate steady profits.

During the past decade, many multinationals have come up short trying to make a profit by solving the pressing needs of low-income communities. Preoccupied with their social missions, companies have optimistically taken on challenging projects, only to be surprised when weak consumer demand and obstacles such as bad roads keep revenues low and costs high. Overstretched and disillusioned, many switch gears and reconstitute their ventures as break-even social investments that are destined to remain small.

A version of this article appeared in the October 2014 issue of Harvard Business Review.