The Case of iDE in Burkina Faso
by Alexander Krizan
Abstract
Over a billion people have to survive with an income of less than a dollar a day and live therefore at the bottom of the economic pyramid (BoP). One of the United Nations’ “Millennium Development Goals” is to halve this number. Many traditional top-down development approaches by donor countries have so far failed. C.K Prahalad and Stuart Hart invented therefore a new approach on how multinational corporations can make a profit by addressing this lowest tier of the pyramid. This thesis critically reviewed the current state of BoP-research and found that the newest adaptations of the BoP-approach view the poor not merely as consumers but also as sellers and entrepreneurs. Furthermore, companies (or Non- governmental Organizations) have to collaborate with different players from both the public and the private sector to be successful in marketing to the BoP.
In this thesis, the case of the NGO iDE Burkina Faso has been addressed to show an NGO, which successfully distributes low-cost drip irrigation systems to smallholder farmers. Cross-sectional partnerships, a functioning last mile distribution and a market creation approach with demonstration farms were the most important factors for iDE Burkina Faso’s success story.
In order to make iDE’s business model sustainable and viable, it will be necessary to assist the Farming Business advisors who install the drip irrigation systems and who offer an after-sales service in becoming independent entrepreneurs. This thesis suggests five strategies to achieve this goal: increasing promotional activities, including new products into iDE’s product portfolio, changing the structure of the margins, increasing the prices of the drip irrigation kits or charging farmers for the installation and the after-sales service. To implement these strategies, further studies will be necessary.