Exploration of the Economics of Poverty

Exploration of the Economics of Poverty 3.1. Introduction A significant body of the literature has been dedicated to examining wide spreading of poverty  and its gradual explosion issues together with pioneering steps in research and practice towards poverty  eradication have created an unprecedented outburst of studies about business literature for poverty  eradication. The following section is a review of literature about how multinationals attend low-income markets where poverty  occurs on a large scale. The review is carried out with a concern about poverty alleviation and some implications and appropriate frameworks for MNCs executives to help to alleviate poverty while selling to the poor. From this viewpoint, the literature review is divided into three main sections: BOP inititiative, buyer behavior and marketing strategies. It examines some key elements of the BOP initiative companies motivation; the BOP business model; the role of micro finance. With a number of successful stories acknowledged in the literature, the sectio n also reviews how to adopt MNCs marketing mix to attend the BOP profitably. 3.2. Part 1: Poverty in Business Perspectives Billions of people living in the extreme poverty, who are in many cases denied access to proper services, energy, water, health, and above all the opportunities to improve their economic and social outlook, is a significant societal problem. Even though the high economic growth of large-population countries, such as China and India, has brought about many job opportunities and brought down the overall poverty  level, it is still not sufficient to reach other targets in the Millennium Development Goals (MDGs) (World Bank, 2004). Along with the increasing concern of NGOs and other non profit organization towards poverty alleviation, business perspectives have been gradually positioned as a useful tool in contributing to poverty reduction. Such interest has appeared to become much more worldwide through being catalyzed by pioneer approaches, both in practice and theory, which have awakened business attention to the problem of poverty. Indeed, there is an abundance of academic literature on the. It appear to have been dissected from all imaginable angles Poverty in business perspectives has a diverse appearance, such as the vast majority of 4 billion people living on less than $1 or $2 a day (Prahalad and Hammond, 2002), poor producers (Karnani, 2007), gender (Thierry, 2007), self-employed poor people, micro entrepreneurs, micro franchisees (Gibson, 2007), employees, business owners, etc. Within these much attention is lately placed not on poverty as a whole but on its attributed and its causes. 3.2.1. Companies Motivation to Attend Low-Income Markets Much of the debate about poverty alleviation has been provoked by suggestions that multinational corporations (MNC) with extensive financial resources are in the best position to lead the process of selling to the poor. The construction of a new image of poverty in business perspectives, for example, is much contributed by the pioneering idea of Prahalad and Hammond (2002) who focus on the large buying power of 4 billion people earning less than $ 2000 each per year at the lowest tier of the economic pyramid â‚ ¬Ã¢â‚¬Å" Bottom of the pyramid. Prahalad and Hammond (2002) advise private companies to view poverty as a potential of serving an unexploited, multitrillion-dollar market and alleviating the level of global poverty while still earning a profit. By infusing the profit motive into value creation, the hope is that private companies will take the leading role in serving the BOP and, thus, the purpose of alleviating poverty will more likely succeed. From this follows/Keeping thi s in mind, the main two motivations for profit seeking companies to attend this market is: The opportunity to covert BOP segments purchasing power into profits; and The ability to bring prosperity to the poor, and thus alleviate poverty. This was supported by 3.2.1.1. Purchasing Power and Profitability A key component surrounding literature is that even poor people could be profitable customers. a) Creating New Business Opportunities Such strong view rests on the idea that the potential growth for many multinational (MNC) and medium sized companies does not rest on the low-income market in the developing countries. Instead, its source is the immense size of potential market of $13 trillion at purchasing power parity (PPP) that the two-thirds of the world population with unmet needs are supposed to represent. Projections and demographic trends also indicate that by 2050, more than 85% of the worlds population will fall within this category. This portends an abysmal decline in effective demand. By empowering the poor, businesses naturally create new business opportunities by raising effective demand and consumption levels. b) Corporate Social Responsibility (CRS) since it will help to reduce poverty and more importanlty for the company, it will be crucial to their long-term competitiveness and success. One of the most interesting implications of BOP is the radical impact it can have on a companys core business model. .. for instance, claims that organizations which set out to empower poor communities by providing basic education and skills acquisition, improving local human capital, protecting the environment, and developing the culture of accountability and transparency, are practicing some components of CSR which is essential for the long-term sustainability of any company. Indeed, many large corporations have announced CSR benefits that impacts on their profitability and claim it to be a key element of development. Besides, adds that a comprehensive set of CSR policies, practices and programmes incorporated in companys business strategy can increase productivity, contribute to competitiveness, improve staff recruitment and retention rates and create a more positive corporate image. All in all, concludes that d) Government support Political Capital It is obvious that businesses that empower the poor strike a compelling partnership with the government. Most of the time, politicians take undeserved credit for attracting such private investments etc. 3.2.1.2. Poverty Alleviation and Prosperity to the Poor a) Job Creation Businesses whose products and services address basic and common needs can enter the bottom of the pyramid market segments more effectively, and with a deeper social impact through partnerships with highly innovative community groups. They can scale their impact significantly by leveraging their expertise and experience in developing skills and engaging such community groups actively in delivering their products and services. This way, communities are better served, if an increasing number of people engaged in the business are people from their immediate neighborhoods, giving it a local flavor and a compelling sense of stake in the business. adds that expansion by multinationals into emerging markets creates new jobsproduct-distribution networks and shops, for exampleand income earned from those jobs ripples through local economies, creating more new jobs, a phenomenon that economists call the multiplier effect. b) Training, Education and Skills enhancement â‚ ¬Ã¢â‚¬Å" Profit-seeking companies can also play an important role in educating BOP consumers. Banerjee and Duflo (2007) point out, that BOP consumers can be entrepreneurial and do several different types of jobs. However, due to their lack the skills they can not get higher paying jobs. The provision of funding and training is a way multinationals can support the poor. Education is also necessary not just for getting a job, but to make more informed decisions in other areas, e.g. health education can improve food choices. Besides, education and information can also help BOP negotiate better rates and recognizing counterfeit goods. c) Community Development: Through basic empowerment in terms of education and job creation, the community systematically grows out of the crutches of poverty. Beyond the occasional CSR embarked upon by businesses, empowered indigenes gradually but steadily develop their communities by training other relatives of theirs and embarking on micro projects that eventually add up to improving the lot of their communities. Not only, the company makes more profit, and the peoples lifestyle changes. The poor also benefit because they have access to services such as banking and insurance that once were denied them, he says. 3.2.2. Challenges of Attending Low-income Markets Nevertheless, there is a great branch of the literature about the nature, scope, and value of serving low-income segments (Karnani, 2007a; Martinez and Carbonell, 2007; Aiyar, 2006; Jaswal, 2007) that questions the ease with wich multinationals may enter the BOP and whether profits exist there at all. They argue that it is very unlikely that companies will be able to attend the BOP market profitably. Landrum (2007) points out that the costs of serving this segment can be very high. BOP customers are usually much dispersed geographically; they are very heterogeneous, which reduces the opportunities for obtaining significant economies of scale; and their individual transactions usually represent a low amount of money. In addition, consumers at the BOP are very price sensitive, which, again, makes profitability a difficult goal to achieve. For example, Karnani (2007a) posits that the poor may want the same products as the rich do but by virtue of being poor, they cannot afford them. The differences between business realities and development imperatives are not easy to reconcile, states () Some recent case studies also suggests that unlimited business opportunities and poverty eradication through profits may set unrealistic expectations for business executives (McFalls,2007). Second, the traditional timelines for achieving social goods versus profits differ (Harjula, 2005). Businesses may use a five-year horizon as their benchmark for returns. In contrast, social goals like reducing smoking and other unhealthy lifestyle behaviors may take generations. Thus, rather than viewing the poor primarily as consumers, this group suggest a focus on this segment as producers, i.e.potential entrepreneurs that can improve their economic situation by increasing their income level. Karnani suggests that raising income will alleviate their poverty, provide cost effective products to other consumers, and allow the formerly poor to consume more. Raising their incomes may require that they become producers with stable jobs and wages. Focusing on poor people as self-employed poor people, micro entrepreneurs, Gibson (2007) also suggested that constructing and running micro franchising models that pair franchisors (MNCs or non-governmental organizations), micro franchisors (independent business people) with other poor people to expand the business and get other poor people involved in a self-employment venture can help empower poor people to raise their standard of living and gain a greater degree of financial stability. CONCLUSION It postulates that if companies take the correct steps and devote sufficient resources to satisfying the needs of the BOP, they can overcome barriers to consumption. However, companies must be willing to invest time, resources and training to insure that the producers create products with some barriers to entry and are asonable level of productivity. BOP projects must be integrated into key areas in operations where decisions on new products and markets are made and executed. For most companies, BOP therefore requires comprehensive organizational change and heavy involvement of key business areas responsible for new market creation- something that far exceeds what is required to implement most other sustainability activities. Therefore, while there are potentially compelling reasons for widening the definition of market opportunities beyond consumer goods for low-income segments, the following part of literature review focuses on the BOP concept in its original form, i.e., as a business strategy aimed at selling profit-seeking products to low-income segments while simultaneously contributing to the resolution of significant societal problems in these regions.

Muslim views on wealth and poverty Essay

The topic wealth and poverty is very important in Islam. Humans naturally love wealth and possessions, but Muslims believe that all wealth is created and given to us by Allah and so it belongs to him. Humans can only work hard but any wealth that is given to them is from Allah. Because of this, Muslims believe wealth should be spent on family and also on those who are in need. What is poverty in Islam Muslims believe life is a test from Allah, and we can either choose to follow him or follow the path of Shaytan (Satan). Muslims believe nothing can happen to them that is outside the plans of Allah. Suffering and pain are part of his plans to test the faith of people. There are two different types of evil according to Hindus: Natural evil which is a result of natural processes. Death comes as a result of committing natural evil. And moral evil. Hindus believe that Hindus just need to commit moral evils such as incest, theft, adultery, lying and murder. They believe this comes from the law of karma. If a person suffers in this world, it is because of bad karma in a previous life. Muslims believe life is a test of obedience to Allah; therefore poverty is a test of patience from Allah. They belief that they are in a wining position because if they don’t have wealth, they are being rewarded for their patience. Non believers do bad things yet they live luxuriously, but Muslims do good and still are poor. This is because they believe that the aim in life is to obey Allah, and their patience will be rewarded, where as non believers, believe that the aim in life is to get as much wealth as possible, which takes them away from the path of Allah, as it says in the Qur’an verse â€Å"To Allah we belong and to Him is our return† (2:156). What is Wealth in Islam and how does Islam deal with it? The Muslim ummah is very important in Islam, as we should treat every Muslim as our brothers and sisters so everyone is responsible for one and other, helping the neighbors and being kind to each other. â€Å"O mankind! We made you from a single (pair) of a male and female, and made you into nations and tribes, that ye may know each other (not that you may despise each other) Allah has full knowledge and is well acquainted (with all things)† (49:13) Life is a test for the rich and he poor. The rich will usually have nice lives as Allah has blessed them, but they must not let greed take over their soul. â€Å"Riches are sweet and a source of blessing to those who acquire them in a way: but those who seek them out of greed are like people who eat but are never full†¦Ã¢â‚¬  (The Prophet S.A.W hadith). They must use their wealth in the right way and Allah is testing them. The wealthy should give charity and zakah and earn Halal money. The poor are tested in Islam by their patience. Muslims believe if you are patient then Allah will reward you. They also know that nothing in this life belongs to them; it all belongs to Allah so they should focus on their faith rather than their wealth. â€Å"and know that your possessions and your children are but a trail and that surely Allah is a mighty reward† (8:28) Allah has given us wealth and Muslims know that it doesn’t belong to them. The wealth is not ours; therefore, we should share Allah’s possessions with the poor. Muslims do this by giving charity, such as zakah, sadaqah, sadaqah jariyah etc. What is Zakah? Zakah is one of the pillars of Islam, in which we must give at least 2.5% of our income to the poor. It is compulsory to all Muslims who have enough money to pay zakah, they must have had the money for year, they cant be in debt, they cant be mental and they must be past the age of maturity. â€Å"And (in the daytime and at night) establish the prayer and pay Zakah and [for the cause of your religion and state] lend to Allah a befitting loan, and remember whatever good you send forth for yourselves you shall find it with Allah better than before and greater in reward.† (73:20) The Qur’an demands that individuals take material responsibility for poverty and suffering in the Muslim community (ummah). That is why the Qur’anic revelation above demands that each person give up a certain amount of material wealth to support the poor. We must give zakah to the poor, the indigent, the sick the blind, orphans, the suffering etc. The following table shows the rates of zakah: Wealth Amount Rate Cash in hand or bank Our value of 595g silver 2.5% Gold and silver 85g gold, 595 g silver 2.5% Trading goods Value of 595g sliver 2.5% Cows and buffaloes 30 1 Goats and sheep 40 1 Mining produce any 20% agricultural Per harvest 10% from rain watered land 5% from irrigated land camels Per 5 1 sheep or goat Zakah al Fitr? Zakat al fitr is given at the end of Ramadan, before the eid prayer. It is necessary for who ever is capable to give it. It is to purify your soul, make up for the errors committed during Ramadan and it is also to help the poor on the holy eid day. It is estimated that approximately 3 pounds should be given from each member of your family. Aqiqah? Seven days after the birth of the child comes the aqiqah . it is a celebration where friends and relatives to come and eat and the baby is named. During this celebration the babies’ hair is shaved and by tradition, the same weight of hair in gold or silver is given to the poor, other Muslims offer a sacrifice. The meat is often shared with the family, the visitors and the poor. Sadaqah? Not every one is rich so how can the poor give charity? Charity comes in many forms weather it is giving money to the poor, building a mosque or even smiling at someone. To clean the streets of hurtful things is also a charity. Every one in the world is capable of doing charity as Abu Dharr (may Allah be pleased with him) reported that the Prophet (S.A.W) said â€Å"there is no person who does not have the obligation of (doing) a charity every day that the sun rises.† He also said â€Å"smiling in the face of your brother is a charity†¦ and pouring out from your bucket into your brother’s bucket is a charity.† Sadaqah jariyah Sadaqah is on going charity. The reward for this type of charity benefits the donor even after they have passed away for as long as people receive the benefit from the donor’s charity. Forms of charity can be many things such as providing a well for clean water or even building a hospital. The prophet (S.A.W) said â€Å"when a man dies his action comes to an end except for three: an ongoing charity, knowledge that benefits others and pious offspring who pray for him† Riba/Interest Riba is the Arabic term used for usury. In Islamic terminology interest means effortless profit or that profit which comes free from compensation or that extra earning that is free of exchange. Riba is haram in Islam. The reason for this is because it is concerned a form of injustice, and exploitation. The economy today is debt based, and only does risk transfer, where as the Islamic economy is asset-based and doe risk sharing, it is all about fairness to all parties. The prophet (S.A.W) said † a dirham of usury a man devours with knowledge is greater than thirty six fornications† and it is also reported that he said â€Å"cursed the devourer of usury, its payer, its scribe and its two witnesses, and he said that they are equal (in sins).† Conclusion In conclusion wealth and poverty are very important matters in Islam. As Muslims we should know that life is given to us by Allah, therefore every thing in or possession belongs to Him so we must share our wealth. It is our duty as Muslims to help the ummah, and giving zakah and sadaqah will pure us from our greed and help our ummah. Also everyday friendly gestures such as smiling, helping can be a form of charity so you don’t ever need wealth to give charity.

The person that inspires me most Essay

The person that inspires me most turns out to be a fictional character, Barney Stinson from the famous series How I Met Your Mother. He exudes a uniquely vibrant and joyous energy in every single episode. Inspired by him, I have learnt many positive and useful traits. First of all, he is a positive person, even in the face of adversity. His well-known favorite quote:† When I get sad, I stop being sad and be awesome instead† depicts his notion clearly. It always reminds me of being sanguine no matter what happen and what I will come across. I believe by being positive as he is, I would have more self-control and therefore be able to achieve amazing feats in life. Secondly, Barney is a steadfast character as well. His never-give-up attitude proves to be one of most valuable lessons in life. Whenever he comes across a challenge, he is determined to see it done. That is also the reason why he is able to win the hearts of the large audience. His resolute has influenced me in making many important decisions in real life: when problems arise, no matter how daunting it seems, I must continue on and solve it at all cost. Step by step, I find myself more determined, more persistent in whichever path I tread upon. Last but not least, I am also impressed by his lightheartedness – to â€Å"live every moment to the fullest†. Yet he sometimes behaves in idiosyncratic nature as being unworried about many encumbrances; many desire to have such personality: being untroubled by pressing concerns and stressful life like him. Every moment, every second is to be treasured, because you never know what may happen to you tomorrow. Therefore I too believe: life is to be enjoyed, not to be detested.

The Most Reliable SAT Essay Template and Format

The Most Reliable SAT Essay Template and Format SAT / ACT Prep Online Guides and Tips Aside from the â€Å"grid in† math questions, all you have to do for most of the SAT is answer multiple choice questions. And then, if you've chosen to take it, there's the essay. Or, more accurately, "To finish up, there's the essay." Because the last thing you'll do on the SAT (with Essay) is read a passage and write an essay analyzing its argument, all in 50 minutes. How can you even begin to read a passage, analyze it, and write an essay about it in 50 minutes? What SAT essay structure should you follow? Is there an SAT essay format that’ll score you a top score for sure? Read on to find out the answers to these questions!

Under Armour Example

Under Armour Example Under Armour – Article Example Under Armour Which of the five competitive forces is strongest and why? Product innovation is key is relating to the demands ofthe customers. It remains to be important in controlling inventory and thus acquire more market share in the very dynamic business environment. Who are Under Armours top three competitors to watch in the sports apparel industry? Why?The global market for sports apparel is highly competitive because the products are not easily differentiated. The top three competitors of Under Armour are Nike, Adidas, and Puma. These players are considered the three competitors due to Global Sports Apparel Market share they command and the obtainable revenue. What are the differences between the competitors strategies Under Armour, Nike, The Adidas Group? Which company has the better strategy? Why?Some players such as Under Armour focus on athletic apparel products of high quality-innovative performance. Other such as Nike concentrates on both constant innovation and different iating their products to target specific sport athletes and increase their market share. Nike has proved to have better strategies and this is evident in the huge global market they command in athletic apparel products. Their athletic apparel products offerings place this multinational in a niche market while differentiating the company from all competitive set. Using the financial data provided in the case study, which of the three rivals has been the best performer?Nike is the main competitor in the industry commanding close to 15% of the global market share and 42% being in America thus can be considered the best performer. Nike has remained a vital brand power while playing industry positioning role.What can Under Armour learn from its competitors? There is need to employ strategies that make their sports products appear unique despite the competition and target ignored sport segments. Likewise there need for Under Armour to understanding which of their competitor’s produ cts trend online and use this information to adjust company’s inventory to demands by customer. By incorporating all these changes into company’s marketing strategies, they will get closer to challenging their competitors.What can you apply to organizational work in your sector from what you in the Under Armour case? The organizations remain to be dynamic and competitive to date and as such review of strategies helps to remain competitive and acquire more market share. Exploring various options allow any company to learn a lot from the competitor success and adopt better strategies to remain competitive. Top of FormBottom of Form

Law Essay Example | Topics and Well Written Essays - 1000 words - 13

Law - Essay Example The social control theory can fit this scenario. This theory tries to explain why people do not engage in criminal activities. Being close to other members of the social group can make someone not to become a criminal. This is because people who belong to the same social group may find solutions that affect them in their daily routine. They may also have some conventional rules that can ensure they live together in harmony. This theory is applicable to this scenario since workers belong to the same social group and therefore they know what they need to do in order to avoid crimes. The state senator that is a go between the workers do divide them has his agenda that may not concur with their rights. He thinks that dividing them would establish a good condition for the workers but in the real sense, it does not . An implication of the theory is that it was intended to create harmony in the society given that the conditions were fulfilled. When the senator assures the donors that their work will not be interfered with by the union workers gives them the go-ahead to do what they want with the workers. The donors who are the major investors may turn up to humiliate the workers in what may be termed as the modern slavery. This is because the workers will have no one to give their complaints. They may end up doing a lot of work in very poor conditions. Their work may also be not compensated with a good wage. This kind of crime that the senator commits towards the labor sector deserves a lengthy punishment.

Discuss the evolution of style in Greek sculpture, naming and Essay

Discuss the evolution of style in Greek sculpture, naming and describing specific works that illustrate each of the stages you mention - Essay Example For instance, one of the major statues from this period includes the Karditsa warrior, which was found in Athens; another prominent statue was the mythological Mantiklos ‘Apollo’ found in Thebes (Boardman). The next prominent Greek stylistic era is referred to as the classical period. The classical period is recognized as extending between 500 to 400 BC (Stewart). The classical period was ushered in after the Greeks ended the Persian invasion at Marathon in 490 (Stewart). This optimism is reflected in the style, as Greek artists strove towards a new sense of realism. Among the prominent statues of this period includes Discobolos created by the artist Myron; this statue depicts a man in the process of a discus throw (Stewart). The final recognized Greek stylistic period is the Hellenistic period. This era is recognized as lasting from the late 4th to the 1st century BC. (Stewart) This period witnessed greater sculptural detail, as well as an attempt to demonstrate dynamic motion. The most seminal statue of this period is the Nike of Samthrace Statue, as it expertly demonstrates dynamic movement of wind flowing through the