CK

PRAHALAD
CONTRIBUTION IN
MANAGEMENT
 Brought to you by:
• Baishali Kanojia
• Gaurav Gupta
• Sudhakar Mishra
• Karun Rao
• Priyesh Kumar Sharma

Atal Bihari Vajpayee School Of Management & Entrepreneurship

 Biography
• C. K. Prahalad (1942-2010) was determined to shake managers free of their “dominant
logic” and deeply held assumptions. He was a provocative thinker who regularly produced
startling insights that managers would never have considered. C. K. Prahalad is also famous
for his contribution on the development of the Core Competence Model and Co-creation.
• Prahalad was born in India and a graduate of the Indian Institute of Management,
Ahmedabad (MBA), as well as a DBA from the Harvard Business School.
• In addition to his scientific career as a Professor at the University Of Michigan Ross School
Of Business, Prahalad also worked as an international business consultant. He worked with
companies such as: Oracle, TRW, Unilever, AT&T and Cargill.
• In 2009, he was named the world's most influential business thinker on the Thinkers50.com
list.
 Major Ideologies
• Co-creation
• Dominant logic
• Core competency
• Bottom of the pyramid
 Some Famous Quotes
• “The essence of strategy lies in creating tomorrow’s competitive
advantages faster than competitors can mimic the ones you possess
today.”
• “Executives are constrained not by resources, but by their imagination.”
• “Never accept silence as agreement because you’ll regret it later.”
• “Strategy is about stretching limited resources to fit ambitious
aspirations.”
• “Under certain circumstances, it offers new, unexpected, or long overlooked
value.”
• “There’s a heightened awareness of the need to be, and to be seen as, a good
corporate citizen.”
• “If you are honest about helping others rather than showing how smart you
are, things are very easy.”
• “A company surrenders today’s businesses when it gets smaller faster than it
gets better. A company surrenders tomorrow’s business when it gets better
without getting different.”
• “Laggards follow the path of greatest familiarity. Challengers on the other
hand follow the path of greatest opportunity where it leads.”
• “An industry full of clones is an opportunity for any company that isn’t
locked into the dominant managerial frame.”
 Awards & Honours
• He was the first recipient of the Lal Bahadur Shastri Award for contributions to
Management and Public Administration presented by the President of India in 1999.
• In 2009, he was awarded Pravasi Bharatiya Sammaan.
• In 2009, he was named Padma Bhushan 'third in the hierarchy of civilian awards' by
the Government of India.
• In 2011, the Southern Regional Headquarters of Confederation of Indian Industry
(CII) was named as Prof C K Prahalad Center
• In 2018, he was named the world's most influential business thinker on the Thinkers50.com
list.
 Publications and books by C. K. Prahalad
et al.
• 2010. Innovation’s holy grail. Harvard Business Review, 88(7/8), 132-141.
• 2008, 1998. The end of corporate imperialism. Harvard Business Review Press.
• “Core Competence of the Corporation”
• 1999. The multinational mission: Balancing local demands and global vision. Simon
and Schuster.
• 2002. The Fortune at the Bottom of the Pyramid. Wharton School Publishing.
 Contribution to Management
• “SIR” made a name for himself by introducing the
concept of core competence to explain the superior
performance of Japanese organisations compared with
the rest in the world. This was acknowledged to be a
dramatically new way of understanding competitiveness
of organisations.
 What is BoP?
• The concept ‘Bottom of the Pyramid’ was first used by US President
Franklin D Roosevelt in 1932, while talking about the poor people who are
often forgotten because they live at the bottom of the economic pyramid.
Bottom of the pyramid, also called the base of the pyramid, is a phrase in
economics that refers to the poorest two-thirds of the economic human
pyramid. Management scholar CK Prahalad popularized the idea of this
demographic segment as a profitable consumer base in his 2004 book ‘The
Fortune at the Bottom of the Pyramid’ co-authored by Stuart Hart.
• Four consumer tiers: At the top of the pyramid are 75-
100 million affluent consumers. These are cosmopolitan
groups composed of middle- and upper-income people
in developed countries, and rich elites from the
developing world (they are tier one). At the middle of the
pyramid, in tiers two and three, are poor customers in
developed nations and the rising middle classes in
developing countries—they have been and are the target
market for MNCs for whom strategies are made. At the
bottom of the pyramid, tier four consists of 4 billion
people earning $2 or less per day.
• 45% of all soft drinks are sold in the rural market;
• 50% of all motorcycles are sold in rural areas;
• 60% of all cigarettes are consumed by rural consumers;
• 55% of FMCG products are sold in the rural market (pencils,
pens, notebooks);
• 50% of the national income is from rural areas;
• 41 million Kisan Credit Cards have been issued as against 22
million credit-cum-debit cards in urban areas.
• Also, 50% of LIC policies are sold to rural consumers and,
interestingly, 60% Rediffmail users are from smaller towns.
Margin versus volume: Traditional business in developed countries is mostly
based on high gross margins. The low buying power of the bottom of the
pyramid consumers makes this approach inappropriate. Companies need to
develop a tight and effective lean management to optimize supply chain.
Cost-savings management becomes a key to performance and success in
these huge low-cost markets.
Some MNCs have explored opportunities at the bottom of the pyramid. Perhaps HUL
has understood it better than others. Their marketing strategy is smart—offering brands
with multiple price and packaging options has worked wonders. In India, the bottom of
the pyramid customers go for low-price sachets of shampoos, toothpastes, fairness creams
and hair oil. Much of what Unilever is replicating in the developed world has been
initiated in India. HUL sells power brands such as Close-Up, Pepsodent, Sunsilk, Pond’s,
Vaseline, Brooke Bond Taj Mahal and Bru to increase product penetration at the bottom
of the pyramid. Lifebuoy soap in rural markets is referred to as the ‘laal sabun’ since it’s
red in colour, and ‘Colgate kiya kya’ is synonymous to brushing teeth.
A relatively small player, CavinKare from south India, is credited and has a huge role to
play in ushering the sachet revolution as a strategy for low-end buyers. Other companies
like Parle, PepsiCo and Dabur started selling products in smaller packs and hence proving
the saying “big things come in small packages.” Smaller SKUs (stock keeping units)
contribute to over 40% of sales in the fast moving consumer goods category. Thus,
MNCs in India are credited for frugal innovation—low-cost products and services.
 References

https://www.financialexpress.com/opinion/the-fortune-at-the-bottom-of-pyramid/1174864/

https://en.wikipedia.org/wiki/C._K._Prahalad

https:/RojiThomas9/ckprahlad-contribution-in-management