Capitalism At The Crossroads

Good Books: (via Emergic) Stuart Hart's book, Capitalism at the Crossroads: The Unlimited Business Opportunities in Solving the World's Most Difficult Problems highlights the nature of challenges for multinational companies + development of native capabilities + the concept of leadership genius to innovation + its results. An interesting book.

Stuart Hart writes in the prologue:
In a single lifetime, the human population will have grown from two billion to eight billion. This growth is truly unprecedented. Never before in human history has a single generation witnessed such explosive change. It seems self-evident, therefore, that the policies we adopt, the decisions we make, and the strategies we pursue over the next decade will determine the future of our species and the trajectory of our planet for the foreseeable future. That is an awesome responsibility, to say the least. It is also a huge opportunity.

One of the chapters has a discussion on HLL:
Unilever's Indian subsidiary, Hindustan Lever Limited (HLL), provides an interesting glimpse of the development of native capabilities in its efforts to pioneer new markets among the rural poor. HLL requires all employees in India to spend six weeks living in rural villages, actively seeks local consumer insights and preferences as it develops new products, and sources raw materials almost exclusively from local producers. The company also created an R&D center in rural India focused specifically on technology and product development to serve the needs of the poor. HLL uses a wide variety of local partners to distribute its products and also supports the efforts of these partners to build local capabilities. In addition, HLL provides opportunities and training to local entrepreneurs and actively experiments with new types of distribution, such as selling via local product demonstrations and village street theaters.

By developing local understanding, building local capacity, and encouraging a creative and flexible market entry process, HLL has been able to generate substantial revenues and profits from operating in low-income markets. Today more than half of HLL's revenues come from customers at the base of the economic pyramid. Using the approach to product development, marketing, and distribution pioneered in rural India, Unilever has also been able to leverage a rapidly growing and profitable business focused on low-income markets in other parts of the developing world. Even more important, through its new strategy, HLL has created tens of thousands of jobs, improved hygiene and quality of life, and become an accepted partner in development among the poor themselves.