Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4

‘Do good to do good’ is the slogan of U.S based ‘Two Degrees’, a one-for-one food company that donates a nutrition pack to a hungry child for each product they sell. They’re not the only ones applying this business model; growing awareness of the many issues facing a world made smaller by technology means more entrepreneurs are starting appreciate the need to do good.

This inspired the birth of social entrepreneurship which involves doing good not just for the short term, but investing in enabling the people you support stand on their feet in the long term. Two Degrees does this by establishing its manufacturing in Malawi, the country where it donates its nutrition packs. This means more jobs, more disposable and better skills.  

What stays unnoticed however, is the economic potential of a huge and relatively untapped market.  When it comes to profit making, companies prefer the ‘low growth, low risk’ 1 billion population worldwide who earn above $5,000 per year, while the needs of 4 billion people worldwide who earn less than $2000 a year remain ignored.

True, targeting a lower earning market means more risk, but the growth potential is huge … imagine what you could do with a 1% stake of a 4 billion market.  All it takes is a little innovation and taking the time to understand the needs, values and financial limitations of the local market.  For example Grameen Bank, a company based in Bangladesh practices micro economics, which offers poorer people with no collateral, access to small loans at low interest rates. It’s significance to the community and group-based credit approach acts as a guarantee, as members make sure their peers meet their repayments. Other examples include Godrej & Boyce Manufacturing, one of India’s oldest industrial groups, which has developed a $70 fridge that runs on batteries, known as “the little cool” and Cemex, the second largest cement company in the U.S, which sells on credit in bulk to local communities, thereby building trust while developing the local infrastructure.

If you’re in business for the long haul, the long-term success of your organisation means seeing past immediate prospects to future opportunities. Market entry into ‘less developed’ markets does takes time, however once established the rewards are long-standing and customer loyalty high - which in turn acts as a natural barrier to competitive market entry.

All it takes is a little creative thinking.