Innovation Champions: Fulfilling the Dream of Latin American MoP through Inclusive Business Models
In this chapter, we analyze the development, functioning and the effectiveness of business models innovator companies and managers use to champion the business opportunity reflected in the rising number of financially excluded people climbing the LAC middle-of-the-pyramid stratum from its bottom. These models intertwine economic and social objectives aiming primarily to improve the lives and financially include the new MoP members enabling their ¨dream purchases¨ deemed essential in the developed world, while simultaneously securing own scalability and profitability of stakeholders across the business ecosystem entailing financial institutions and consumer goods sellers. We use a series of case studies to show how these models simultaneously optimize social and financial returns through interchangeable use of stakeholder’s resources and capabilities and clear alignment of their interests rather than seeking trade-offs between the two. Hence, we demonstrate how financial institutions absorb consumer goods companies into the value chain as distributors of their (financial) products and services to middle-income segments using the company’s existing distribution channels and their reputation in terms of the MoP´s trust they possess. Oppositely, consumer goods companies expand their own offers with, for them unorthodox financial tools and services, financially formalizing and including MoP members while at the same time increasing their customer-focus flexibility and sales. Finally, we provide lessons and recommendations on how to develop inclusive businesses achieving direct developmental impacts through the provision of essential goods, services, and jobs, unlocking new forms of innovation and entrepreneurial activity critical to accelerating inclusive growth of emerging markets.