Question

Assuming a firm found a profitable niche selling a product to the one billion people in the Level 1 income group (surviving on <$2 per day), how might such a breakthrough help the firm sell to the one billion people in Level 4 (earing >$32 per day)?

The book is Strategic Corporate Social Responsibility CSR chapter#7

Answer 1

In the market that is full of competition and challenges, Businesses need to find sustainable ways of surviving in the market. Besides, the business owes back to the Society for the Society gives the business an opportunity to serve them and earn rewards in terms of generally, money, in exchange. For this, if a Firm chooses to cater to niche selling of a product in the Level 1 which is profitable in nature, it would be certainly be looked up to by the consumers in the target market for making the products available to them at a reasonable cost.

The breakthrough can happen to this Firm in terms of Goodwill which is an intangible asset of an Organization, carrying a Premium value over and above the Fair Market Value of that Firm. This factor of creation of ‘Goodwill’ in the society is equally important. Goodwill comes with the name a Business can earn in the society. When a Corporation is created, the scope of building upon the Brand name and Goodwill is huge, which is itself an intangible asset of an Organization.

Similarly, in the above case, Goodwill shall attract more customers from the Market to this Firm even from the Level 4 consumers when the newer products are introduced in the up-end markets, apart from availing more qualified Human resource, to work for such a Business.