CSV differentiator - Business with underserved markets in developed economies
This section tests Porter’s and Kramer’s statement of existing CSV opportunities in business with underserved markets in developed economies. To begin the analysis, a segmentation of consumer end markets is required. After the identification of potentiall
- PDF / 356,978 Bytes
- 15 Pages / 419.522 x 595.264 pts Page_size
- 24 Downloads / 153 Views
6
73
CSV differentiator - Business with underserved markets in developed economies This section tests Porter’s and Kramer’s statement of existing CSV opportunities in
business with underserved markets in developed economies. To begin the analysis, a segmentation of consumer end markets is required. After the identification of potentially underserved markets, an empirical study provides insights on potential business opportunities based on case examples for different industries and geographies. The results are summarized to a distinguished answer on Porter’s original hypothesis, in which he claims CSV opportunities in underserved markets in developed economies. The analysis focuses on Germany and the United States as representative economies of the developed world. 6.1
Identification of underserved markets through market segmentation For the purpose of this study a market segmentation based on the income level of
consumers is appropriate in order to identify potentially underserved markets. The three segments ‘low income’, ‘medium income’ and ‘high income’ are defined based on the disposable income of individuals. The low-income group comprises people living in relative poverty in developed economies in Europe or the United States. The European Commission defines elements that characterize relative poverty. The defined characteristics are unemployment, low income, poor housing, inadequate healthcare as well as barriers to education, culture, sports, and recreation (European Commission, 2004, p. 8). The lack of basic human needs such as food, water, sanitation, health, shelter and education is defined as absolute poverty (Gordon, 2005). CSV consideration for target consumers in absolute poverty are not considered because government and social security systems protect the large majority of citizens in developed economies from falling in absolute poverty. Creating Shared Value opportunities are assessed for citizens living in relative poverty. Relative poverty is defined following international standards as individuals with an income below 50 percent of the national income median. The share of working population below that poverty income level is used as an approximation for the total share of population in poverty. According to this definition and method, 7.7 percent of Germans (Bundeszentrale für Politische Bildung, 2013) and 30.4 percent of Americans (United States Census Bureau, 2013) live in relative poverty in these two countries. These two groups, about 6.2 million Germans and 96.6 million Americans, © Springer Fachmedien Wiesbaden 2016 B. von Liel, Creating Shared Value as Future Factor of Competition, Wirtschaftsethik in der globalisierten Welt, DOI 10.1007/978-3-658-12603-2_6
74
6 CSV differentiator - Business with underserved markets in developed economies
constitute the group at the bottom of the pyramid in developed economies for the upcoming analysis of CSV opportunities. The medium income group comprises people with income levels between 50 percent and 150 percent of the income median in the res
Data Loading...
