Innovative business practices at the bottom of the pyramid in South Africa

Abstract

Abstract In an era characterised by tough financial constraints and increased pressure to fulfil social imperatives, bottom of the pyramid (BoP) strategies have been viewed as a possible panacea to attaining the dual goals of generating a profit for companies, as well as contributing to the socio-economic development of the marginalised poor, who live on $2-$5 a day, according to Prahalad (2010). However, literature indicates that there are few examples of successful BoP initiatives. This study set out to investigate Pharma Logistix’s innovative business strategy at the bottom of the pyramid in South Africa, called SAHealth Clinic, which aims to increase good-quality, affordable primary healthcare in low-income areas, while promoting entrepreneurship. A case study approach was used to explain the business model and its impact at four sites in Gauteng from the perspectives of the company, the community which benefits and the nurses who run the clinics as entrepreneurs. The research revealed that the nurses and the community benefitted immensely from the SAHealth Clinic concept; however, the company did not aim to make a profit from this initiative. It gained value through its brand image and reputation, as well as achieving a perfect scorecard in terms of enterprise development and corporate social responsibility. The initiative is relatively sustainable at present, and has the potential to effect major positive change in healthcare provision in time; however, numerous challenges exist. The business model subverts some of the BoP theoretical norms and blurs the line between BoP, corporate social responsibility and social franchising to achieve its goals.