Our Experience
J&J (Johnson & Johnson), like many other multinational businesses, seeks to better understand its role and position in low-income markets, and assess the potential for combining growth with positive impact and socio-economic change at the BoP.
Low-income markets are relatively unknown to R&D or marketing departments, and sometimes wrongly viewed only through the angle of corporate social responsibility.
Reciprocity disagrees with such assumptions and offers to rather identify levers and tools of development through Learning Journeys of one or multiple days, physically exposing corporate executives and managers to the BoP. Since 2012, J&J and other corporates have markedly improved their understanding of BoP markets, providing them with opportunities to develop and implement suitable and effective strategies.
The Ivy League school Brown University in collaboration with Madrid’s IE Business School, seeks opportunities to develop innovative business models in strategic sectors (Energy, Housing, Financial services, etc) targeting low-income markets. The specifics of low-income markets require innovative strategies rather than adapting existing models.
Reciprocity develops, designs and implements an annual field research programme for Executive MBAs of IE Business School and Brown University. Since 2012, this programme has led to the development of multiple initiatives with strong potential in various domains including energy, health, finance, housing and sanitation.
Business Schools are seeking to expose their students to emerging markets. Each year, Reciprocity provides an opportunity to 85 to 90 MBA students from the London Business School to gain a better understanding of the diversity and complexity of profiles in the township of Alexandra in Johannesburg.
Divided in teams of 4 to 5, MBAs are fully immersed for a period of one week with their client; and guided by a methodology specifically developed for the programme. Through this direct immersion, MBA students get an opportunity to improve their understanding of informal market dynamics in low-income communities.
Since 2012, 135 SMEs in Alexandra have benefited from recommendations and ideas formulated by the LBS (London Business School) teams. Over 10 years, approximately 700 graduate students of LBS have completed this programme and been exposed to the complexities of informal entrepreneurship and entrepreneurial ecosystems in emerging markets.
Anglo American is to South Africa what General Motors and Ford used to be for the United States: A corporate giant that played a huge role in the country’s economic development over the past 100 years. It is now a truly global corporation with operations all over the world and is actively engaged in fostering enterprise development at the BoP in all the communities it works in.
Every year, Reciprocity takes a delegation of Anglo executives from Brazil, South Africa, Mali, Namibia, Australia, Europe and elsewhere to Nyanga, Khayelitsha and Philippi in Cape Town in order to catch a glance of Cape Town’s rich and diverse BoP economic landscape: Looking at transport nodes, meeting with informal and formal traders, with service providers, studying local innovative models such as sewing cooperatives… and getting inspiration for enterprise development and empowerment projects in South Africa, Brazil, Mali and other countries of operation.
Reciprocity took Schneider Electric on a “deep dive” into the energy market for low-income households in the Cape Town townships. The aim of the Learning Journey was to meet a variety of stakeholders shaping the market at the lower income end, including:
· End-Consumers / Prepaid users: Households living in informal as well as formal dwellings, some of them clients of Housing Microfinance Institutions, gaining an understanding of the issues surrounding access, affordability, usage patterns of electricity (electrical devices), and life at home.
· Secondary traders: They are end-consumers legally connected to the grid, but who trade in electricity by selling on to their neighbours, at a profit, often through illegal connections;
· Retailers: The ubiquitous spaza shop owners, who sell prepaid electricity vouchers;
· Electricians: Whether they are official or clandestine, they work to provide access by connecting low-income households to the grid.
Total Coal is one of the biggest employers in Mpumalanga province and is actively engaged in a local economic development (LED) plan in Govan Mbeki district where it is based.
Total Coal asked Reciprocity to take two of its executives on a learning journey focusing on the business fabric of Nyanga, Gughulethu and Khayelitsha, looking at “Enterprise Development” business models in the telecom industry (access to voice and datas), the finance industry (access to loan and retail banking) and the retail (informal spaza shops) catering specifically for the low income market. This journey provided delegates with concrete, replicable examples from which to draw inspiration applicable to Total Coal’s “Enterprise Development” strategy.
Aimed mainly at MBA students, EEC missions consist of field work for exchange students in the informal and formal entrepreneurial tissue at the BoP. Students are assigned in small teams to an entrepreneur from the townships, with the aim of improving his or her prospects. These consulting missions can last between 1 to 6 weeks, depending on the type of formula chosen by the academic institution. Alternative types of field exposure for students and academics may involve specific consulting missions on behalf of corporate partners of academic institutions, aimed at studying existing efforts by these corporates to reach BoP markets: distribution models, micro-franchises, procurement…
When it comes to understanding BoP economics, it is difficult to beat the hands-on experience and lessons learnt from working with a micro-entrepreneur from the BoP. In many ways, the actual teacher here is the micro-entrepreneur. The learnings gained through such an experience are immense, for students as well as for MNCs trading or interested in trading at the BoP.
Through the University of Cape Town, we offer the EEC programme to international MBA students from Columbia, Cornell, UNC Kenan-flager, Duke, Kellogg University… and several others
Access the EEC Website and meet with the entrepreneurs.
The purpose of our Learning Journeys on insurance are to investigate the insurance needs in low-income communities, using Alexandra township in Johannesburg as a benchmark.
Split into groups of 6-7, our delegates, drawn from leading insurance companies from all over Africa, interacted with ordinary household members in shacks, RDP houses, council houses as well as with small business owners in order understand the insurance market at the BoP and its challenges, as well as to discuss, identify and visualize market opportunities for the development of micro-insurance products.