BoP SCM Per­form­ance

Ex­plor­ing Fo­cal Firm‘s Per­form­ance Fea­tures in BoP Sup­ply Chain Man­age­ment – Tak­ing the Case of Pakistan (DAAD)

About 15 years ago, a market-based solution to the challenges faced by humanity, poverty elevation in particular, was proposed. Multinational corporations (MNCs) with resources at their disposal were called to engage with the vast market of developing economies, referred to as base of the pyramid (BoP) markets, for the sake of mutual benefit. Copying the traditional business logic and supply chain solutions will not work in these emerging markets as they are designed to serve the needs of formal markets. There remains a need to devise innovative business strategies and adjusted supply chain solutions, adapted to the BoP business context, to enable firms to operate successfully in developing markets and play their part in alleviating poverty. Research on business solutions for poverty alleviation is still in its infancy, and therefore there is no coherent set of concepts.

The project focuses on further studying firm’s performance implications of BoP based product offerings, i.e. win-win situations, where economic, environmental and social goals can be mutually accomplished. Pakistan is taken as a representative case for BoP markets, focusing on the textile and food industry. Acknowledging the potential differences in performance features of firms targeting export or local markets both multinational and regional supply chains will be evaluated. The textile and apparel industry being the largest export-based revenue generator for the country will be evaluated in the context of transnational/global supply chains. The national market-oriented food industry will be analysed in the context of regional/local supply chains. The project will focus on the kind of performance relationships (win-win, minimum requirements and trade-off) which do feature in BoP supply chains.

A structured survey will be conducted to collect data. Two separate questionnaires will be designed each for textile and food supply chains. The data will be collected primarily from Pakistan’s two industrial cities, Faisalabad and Lahore. Sample firms will be selected from databases maintained by Lahore and Faisalabad’s Chamber of Commerce and the respective industrial associations e.g. APTMA (All Pakistan Textile Mills Association). The analysis of the quantitative data will be conducted using structural equation modelling (SEM) technique.

The project’s results will help to better understand BoP firm’s performance drivers.