The objective of this step is to develop an understanding of the resources needed to launch the proposed enterprise and those that are currently available, either locally or within the MNC. Through this process, the Core Team begins to develop a map of potential partners. This is a highly iterative process, for resource forecasts will undoubtedly change as the venture begins to take shape and become more concrete. The process and the findings should be documented and made available to the community through the base camp. There are four key tasks that comprise this step:
Identifying Objectives & Resource Needs
The purpose of this task is for the Core Team to articulate the specific objectives of the proposed venture for the various constituencies and to then forecast the venture’s resource requirements at each stage of the value chain. The stated objectives will likely influence the shape of the value chain and the type of resources needed by the venture. As stated above, this process will be highly iterative, with forecasted resource needs varying as the venture develops.
Co-assessing Local Capabilities and Hidden Assets
Employing participatory techniques (see Appendix 1), the Core Team should begin to develop a map of the locally-based resources and capabilities that can be brought to bear in launching the proposed venture. This step requires that the Core Team suspend assumptions of how things should be done, recognizing that the local BoP community may possess very different, yet effective, socio-economic institutions and norms to facilitate commerce.
As an example, some banks serving BoP communities have successfully utilized trust-based “solidarity” groups instead of formal credit checks and collateral requirements in encouraging loan repayment. These “hidden assets”– forms of local knowledge hidden by virtue of Western or Top of the Pyramid norms of development – may support any number of aspects of the venture’s value chain: from the way financing is offered, to how distribution is conducted, to the manner in which customers are educated about the product. Appendix 2 provides a list of various dimensions along which the local community can be segmented in order to better understand the diverse social structures and hidden assets in place.
Mapping MNC Capabilities
At this stage, the MNC Team should begin to document and map the resources located within the MNC that could support the venture. As during the Opening Up phase, this is an opportunity for the MNC to challenge its assumptions, as the local BoP context simultaneously makes obsolete some of the MNC’s competencies while opening up new possibilities. The Core partners can play an important role in this critical assessment, using the insights and perspectives of the local community to rethink the MNC’s resources and to identify its own “hidden” resources.
Staking Out Disruptive Competencies
The context of the BoP venture presents the MNC Team with a unique opportunity to develop and incubate new competencies and capabilities potentially disruptive of its Top of the Pyramid markets. Therefore, at this stage, the MNC Team should identify the specific capabilities and competencies that it wishes to develop through its involvement in the chosen BoP enterprise, as this decision will influence the selection of partners and the business model.