The sixth edition of LIBA Insight ’11 focuses on the seminal works of the management guru par excellence Dr C. K. Prahalad. His contribution to the world of business has been humanistic, universal, futuristic and truly path breaking. They have changed the way businesses consider markets. No wonder he has been ranked twice on the Times list of the world's most influential business thinkers. As one of the most illustrious alumni of Loyola fraternity, we at the Loyola Institute of Business Administration (LIBA) take great pride in celebrating him and his works.

LIBA Insight ’11 symposium will deliberate on how his concepts affect organisations, economy and consumers. Be it the idea of Core Competence, Fortune at the Base of the Pyramid, Next Practices or others – each idea in isolation or together – has the power to catapult an organisation in an unrivalled trajectory. We want to know how firms have implemented such ideas, how some of the successes of application can be replicated in other industries and firms, under what conditions his ideas will work and where not and what changes in any of his prescriptive ideas are required to exploit them better.

Next Practices

Prahalad for over two decades dissertated about next practices and their significance. Identifying and adopting best practices especially those of market leaders may allow firms to catch up with competitors; however it may not help firms transform into market leaders. Innovating, identifying upcoming opportunities and thus inventing next practices, on the other hand, can lead to a whole new ball game for enterprises.

Next practices involve conceiving what the mega-opportunities of the future will be and building capabilities to exploit their potential. Apple and Tata Motors are examples of the next practices Dr Prahalad expounded about. Enabling 4 billion people in emerging markets to join the organised economy is a mega-opportunity in inclusive development just as focusing on micro-consumers and micro-producers is an opportunity in inclusive growth and sustainability. Inclusive development is the inevitable future path to growth and should not to be viewed as mere corporate social responsibility. Use of communication, connectivity and content as enablers of new business models to engage people in collective innovation is yet another opportunity to capitalize on innovation.

According to Dr Prahalad, opportunities to develop next practices are abound and not constrained by resources but by imagination alone. Executives need to unearth opportunities by looking to solve the big problems faced by their enterprises and build core competencies to capitalise on them.

Core Competency

The central idea behind Prahalad’s concept of co-creation is that an organisation can only co-create products and services with consumers, when it knows precisely what it is good at. Firms can then leverage such knowledge and use consumers’ insights to innovate. Such knowledge is the firm’s ‘core competency’. Prahalad states the need to channelize every decision in the organisation towards identifying and building the core competencies of the firm. And the process of identification and building can make or break an organisation. Therefore, both appear to be at once intriguing and challenging. With shortening technology and product life-cycles the challenges are only mounting; it calls for deftness in identifying market signals, albeit weak, early; it also calls for swift ways to create a future in line with weak market signals that forewarn change and translate it into a product/service that consumers never thought of but definitely need. In some sense, creating the future is the strategic intent of a firm. That intent also defines the firm, its market and is the key to invent new markets and exploit emerging ones. Strategic intent is the basis for defining the portfolio of competencies, says Dr C. K. Prahalad; and it is here that co-creation may abound. Firms, such as Honda and Apple, have won races for global brand dominance by creating a wide variety of products from core competencies and thereby have built an image, customer loyalty and access to distribution channels for all their products. Including firms that have thought of markets in unconventional areas, such as the Base of the Pyramid have greatly profited. Is there really a fortune?

Fortune at the Base of the Pyramid

Dr Prahalad’s discussion with the senior management of ING had a very thought provoking question. “Are you willing to change the way you work and not limit your reach, or do you maintain the way you work and walk away from opportunities?” This question was a call for firms across all sectors to work beyond the comfort zones of the top of the pyramid in any country. In a world where the poor abound, Prahalad believed that every business can ‘make a new box’ for itself by choosing to provide world-class goods or services at prices affordable to the poorest people and also reap profits. In some sense, inclusion of the Base of the Pyramid was no more an option but a central part of the growth story.

Hollard Group’s insurance sector in Africa built a base of 600,000 customers by selling simple funeral policies targeting the tradition of elaborate and expensive funerals. Several in India consider the sachet shampoo a revolution in BOP marketing. The BOP demands real value for money not necessarily lesser and cheaper. It calls for re-engineering the products. Firms that target such markets and wish to mine the fortune have to have a clear strategic intent, possess carefully crafted core-competencies, laboriously work with consumers to co-create the products, and elaborately plan a distribution model. Besides real fortune, HUL argues that the need for a focus on BOP today is critical for sustainability of the organisations. Hindustan Unilever’s Shakti Entrepreneurial Programme helps women in rural India set up small businesses as direct-to-consumer retailers. The scheme equips women with business skills and a way out of poverty as well as creating a crucial new distribution channel for Unilever products in the large and fast-growing global market of low-spending consumers.

However to innovate, create, and distribute products to a population that barely earns enough for two square meals a day and in a manner that really adds value to them is a challenge to say the least. How can one with true intent provide real value to a set of people who probably may not have bought anything significant ever? Is this a philanthropic model? Or is there really a fortune at the base of the pyramid? In the sixth edition of Insight ’11, LIBA is proud to set a platform to deliberate on Dr C. K. Prahalad’s ideas: next practices, core competence and inclusion.