Discussion and Conclusion chapter

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1 INTRODUCTION

The chapter pulls together the research findings from the principal empirical study and then focuses a discussion of these findings on how they address the thesis aim. The general aim of the thesis is to elaborate our understanding of MNCs and local intermediaries’ business affairs in the BoP market.

By examining the relevant literature through the course of the research project, together with the examination of research findings from the study, revealed that extant research on MNCs and local intermediaries’ business affairs in the subsistence markets in developing economies was empirically under-researched context and from this realization, three main objectives emerged:

1.  To examine the originators of BoP business models and the effect of MNCs entry on the living standards of local intermediaries.
2. To examine the co-optation and reinvention of business models in the BoP markets
3. To examine whether MNCs entry contributes to inequality when engaging with BoP markets.

8.2 DISCUSSIONS OF THE FINDINGS

The general aim of the thesis – to elaborate our understanding of MNCs and local intermediaries’ business affairs in BoP markets – was realized by concentrating the results and discussions on three objectives that together build on the current understanding of BoP theory and how MNCs engage local intermediaries in the subsistence markets.

Proceeding to the discussion on whether these objectives were met by the present aim of the research, a reminder is provided on how they were advanced. The discussion of findings draws from the literature examined in this study but additional support is pinched from other obtainable literature, particularly where findings were unanticipated. In addition, some interpretations are dealt within the findings presented in chapters 5, 6 and 7.

8.2.1 Objective One: To examine the originators of BoP business models and the effect of MNCs entry on the living standards of local intermediaries.

The approach of this first objective in the current research was captured. Various literature was examined to address this objective, and an exploratory empirical study was conducted by considering six different companies and local intermediaries as a case study. Considering the former instance, the review of the literature to understand the initiators of business models and the intermediaries’ living standards in this market was based on four different areas:

• The State of MNCs and local intermediaries’ innovations at the subsistence market in Ghana
• The Characteristics and Initiators of BoP Business Initiatives
• Variety of BoP Business Models
• Living standards of local intermediaries in the subsistence market in Ghana

A number of prior studies were found to be conceptual, case studies and cross-sectional in nature. Previous research focused on cases of BoP markets that describe products suitable for the BoP and reflected on MNCs, large companies, NGO’s and government as the initiators of BoP business models (Brinkerhoff, 2008; Prahalad, 2004; London, 2008; Oslen and Boxemburg, 2009).

The data collection methods were through surveys, and semi-structured questionnaires. They based their evaluation of initiators of BoP models on producers such as MNCs. This research approach, methods and limitations were like those adopted by other two streams of study in the BoP literature, of which innovations were also a part:

1. Companies as initiators of BoP business initiatives
2. Strategy on entry of BoP market

In Ghana, the empirical study was taken by the researcher who interviewed 36 local intermediaries, comprising 24 micro business owners and 12 “Susu” collectors. A large number of local intermediaries with respect to those selling products and services from each industry reported that when they developed the BoP business models, their living standards were improved.

Yet, previous research was unable to focus on these intermediaries as initiators of BoP initiatives and models but only paid attention to MNCs, large companies, NGO’s, governments and SMEs as initiators of business models.

It was concluded that one way to elaborate on our understanding of the initiators of BoP business models, it was necessary to understand the MNCs’ role and the basis of management interpretations about intermediaries’ business activities in this market. The local intermediaries’ business activities exist between MNCs and the final consumers in the subsistence market.

Local intermediaries were defined as micro businesses that serve as a link between MNCs and consumers at this market. A review of the BoP literature (Prahalad, 2004) was conducted on the MNCs role in the BoP market and its relationship with the local intermediaries as well as the origins of BoP models.

The review, along with limited empirical evidence from a few studies concluded that local intermediaries’ business serves as a route to market for goods and services of MNCs in the BoP market. This pointed to the fact that possible relationship exists between MNCs and the local intermediaries. Through a theory of BoP (Prahalad and Hart, 2002; Prahalad and Hammond, 2002;…….