List of Figures ................................................ VI
List of Tables ............................................... VIII
List of Abbreviations .......................................... LX
1 Introduction and outline ..................................... 1
1.1 Relevance, problem definition and research
objectives .............................................. 1
1.2 Structure of the dissertation project ................... 7
1.3 List of publications .................................... 9
2 Tata Nano: The car for the bottom of the pyramid ............ 11
2.1 Case overview .......................................... 11
2.2 The Indian automotive industry ......................... 12
2.2.1 Policy and regulatory framework ................. 12
2.2.2 Supply and demand ............................... 12
2.3 Tata - India's industrial powerhouse ................... 18
2.3.1 The Tata Group .................................. 18
2.3.2 Tata Motors Limited ............................. 20
2.4 The development of the Nano ............................ 23
2.5 Outlook ................................................ 27
3 Markets at the bottom of the pyramid: Definition and
characteristics ............................................. 29
3.1 Market-based approaches to poverty alleviation ......... 30
3.2 The bottom of the pyramid - Definition and
characteristics ........................................ 34
3.2.1 Definition of markets at the BOP ................ 34
3.2.2 Characteristics of markets at the BOP ........... 39
3.3 Challenges of the BOP for corporate strategies ......... 47
4 Market entry of multinational companies in markets at the
bottom of the pyramid: A learning perspective ............... 53
4.1 Introduction ........................................... 53
4.2 Theoretical foundation: The learning perspective of
the internationalization process model ................. 56
4.3 A learning perspective on BOP-markets .................. 58
4.4 Methodology ............................................ 59
4.4.1 Research design ................................. 59
4.4.2 Case selection .................................. 60
4.4.3 Data collection and method of analysis .......... 61
4.5 Within case analysis ................................... 62
4.5.1 The case "Allianz" .............................. 62
4.5.2 The case "Unilever" ............................. 64
4.5.3 The case "Vodafone" ............................. 67
4.6 Cross-case analysis .................................... 70
4.7 Conclusions, limitations and implications for further
research ............................................... 77
5 Resource dependency and innovative strategies in markets
at the bottom of the pyramid ................................ 81
5.1 Introduction ........................................... 81
5.2 Resource dependence theory and strategies in BOP-
markets ................................................ 88
5.3 RDT and firms in BOP-markets ........................... 91
5.4 Hypotheses ............................................. 92
5.4.1 Internalizing resources ......................... 92
5.4.2 Forming coalitions .............................. 93
5.4.3 Improving environmental conditions .............. 94
5.4.4 Effects of non-traditional partnerships ......... 95
5.4.5 Strategies and firm performance ................. 96
5.5 Methodology ............................................ 99
5.5.1 Research setting and data collection ............ 99
5.5.2 Measures ....................................... 100
5.5.3 Selection of statistical method ................ 101
5.6 Results and discussion ................................ 103
5.6.1 Model assessment ............................... 103
5.6.2 Statistical results and hypotheses tests ....... 106
5.6.3 Discussion ..................................... 108
5.7 Contributions, limitations and further research ....... 109
6 Relationships with cross-sector stakeholders in BOP-
markets .................................................... 113
6.1 Introduction .......................................... 113
6.2 Theory and hypotheses ................................. 115
6.2.1 Stakeholder relationships and responsiveness
to customer needs .............................. 118
6.2.2 Stakeholder relations and responsiveness to
market conditions .............................. 119
6.2.3 Stakeholder relations and responsiveness
to the institutional environment ............... 121
6.3 Methodology ........................................... 121
6.3.1 Research setting and data collection ........... 121
6.3.2 Measures ....................................... 123
6.4 Results ............................................... 125
6.5 Discussion ............................................ 128
6.6 Contributions and theoretical insights ................ 129
6.7 Managerial relevance .................................. 130
6.8 Limitations and research directions ................... 131
7 Conclusion ................................................. 133
References .................................................... 137
List of Figures
Figure 1-1 Market-based approaches for sustainable
development ......................................... 3
Figure 1-2 Research questions of the dissertation project ...... 6
Figure 1-3 Structure of the dissertation project ............... 7
Figure 2-1 Segments of the Indian automotive market in 2008-
2009 ............................................... 14
Figure 2-2 Growth rate and shares of passenger car segments ... 15
Figure 2-3 Major car manufacturers and suppliers in India ..... 16
Figure 2-4 Segments of passenger cars in India and exemplary
models ............................................. 17
Figure 2-5 Core values of the Tata Group ...................... 19
Figure 2-6 Ownership structure and business sectors of the
Tata Group ......................................... 20
Figure 2-7 Market shares of Tata Motors in different
segments ........................................... 21
Figure 2-8 Cost-efficient innovations for the Nano ............ 24
Figure 2-9 Component suppliers for the Tata Nano .............. 25
Figure 3-1 Characteristics of market-based approaches to
poverty ............................................ 31
Figure 3-2 Categorization of term referring to market-based
approaches ......................................... 33
Figure 3-3 The economic pyramid ............................... 35
Figure 3-4 Country income groups .............................. 36
Figure 3-5 Share of population living on less than $2 a day,
2000-2007 .......................................... 37
Figure 3-6 Threshold value, size and total household income
of the BOP according to different authors .......... 38
Figure 3-7 Access to financial services ....................... 42
Figure 3-8 Percentage of poor people in Africa and Asia
without microinsurance coverage .................... 43
Figure 3-9 Indian BOP expenditure by sector ................... 45
Figure 3-10 Comparison of environmental conditions in
different markets .................................. 47
Figure 3-11 Twelve principles of innovation for BOP-markets .... 48
Figure 3-12 Strategic recommendations of the UNDP .............. 49
Figure 3-13 Strategic recommendations of London and Hart
(2004) ............................................. 50
Figure 4-1 Design and logic of the learning theory ............ 57
Figure 4-2 Knowledge-based market segmentation ................ 59
Figure 4-3 Internationalization sequence of Allianz in BOP-
markets ............................................ 64
Figure 4-4 Projects of Unilever to target BOP-markets ......... 67
Figure 4-5 Internationalization sequence of Vodafone in BOP-
markets ............................................ 70
Figure 4-6 Extended establishment chain ....................... 75
Figure 5-1 Research model ..................................... 98
Figure 5-2 Structure and estimation results of structural
equation model .................................... 107
Figure 6-1 Categories of stakeholders ........................ 124
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