Fortune at the Bottom of the Pyramid: the Philippines Manila Water
Introduction
The country I selected was the Philippines, and the product introduced was supplying water efficiently. Manila Water has been acclaimed as a shining example of a successful public-private partnership not only in the Philippines but even in the international community (www.manilawater.com). Prior to Manila Water Company’s privatization in 1997, only 3 million of Manila, Philippines’ 5 million residents had access to water, and those who did have access to it only had access for only 6 hours per day. The 2 million residents who lacked water often had to pay middlemen ten times the price for water. Since the privatization of Manila Water, 99% of Manila’s citizens can now access water 24 hours a day, 7 days a week. After going private, Manila Water retained 97% of its employees, produces 15% to 20% operating margins, resulting in profits of $50 million per year; its market capitalization has grown from 2 billion to 132 billion pesos (Katsuri, 2008).
The Invisible Opportunity
The 4.5 billion people in the world at “the base of the pyramid” are characterized as those individuals who live on $5 or less per day. They represent a $15 trillion economy, a huge under-valued opportunity. In order to tap into this hidden market potential a company must strike a balance between profit-creation for themselves and value-creation for their consumer. To address the needs of the consumers at “the base of the pyramid’, companies must build a business strategy geared towards the development or restructuring of a products and services that address the fundamental problems of poverty and sustainable development.
Manila Water saw the opportunity in the base of the pyramid; they realized that pursuing the opportunity required focusing the company’s business strategy and developing trusted relationships with the community. By delivering innovative solutions to “the base of the pyramid”, Manila Water has enhanced the quality of life of the lower-income residents of Manila. Though its flagship program, ‘Tubig Para Sa Barangay’ (TPSB) or Water for the Poor, Manila Water has demonstrated its obligation to the poor by attending to and addressing their need for a regular supply of clean, safe and more affordable water. The TPSB program is specially designed for areas