Chapter: The Ecosystem for Wealth Creation

Quote:

Every developing country has the components of this portfolio. However, the relative importance of the various components of the ecosystem is different across countries. For example the extralegal (those who exist outside the legal system) vegetable sellers in the slums of the San Paulo or Mumbai coexist with global firms such as ford and unilever. The chicken cooperatives and processors such as Sadia in southern Brazil and a local fast food chain such as Habib’s coexist with Kentucky Fried Chicken and McDonalds. Whether it is in Brazil, Mexico, South Africa, or India, a portfolio of these constituents of various ecosystems exists.

What I expect to learn:

To know the so called Ecosystem for Wealth Creation

Review:                    

I know you have heard of the great companies we have nowadays. Those companies that once you hear the name, you will instantly think “stinkin’ rich!” well that is the essence of having a company in the first place, to be well known and to earn crazy money. I think serving the bottom of the pyramid what they want and focusing on that for a long time will really get your company somewhere because just look at some convenience store we have nowadays. They are like mushrooms in a healthy season where they just pop out of nowhere. They just can’t resist the itch of selling to the majority of people in every little place possible because they know, they will earn. Not because of the high markup which they reject to add in their products but with the number of people buying in them. That is why I am so amazed with Chinese business men. They don’t focus on how high they should put markup in their products because they know if it is too high, the public won’t appreciate it that much, only few will have the capacity to purchase and figure out the good in their products but they focus on the bulk of their product hoping to sell as much unit as they can in a lower price, lower than the most average price offer there is. That is why people like it low. They like the price low for them to buy more of it whether they need it or not, they just want the security of having something in the right number without spending that much.

What I learned:

·         Ecosystems for a developing country

·         Learning the sanctity of contracts

·         Reducing inequalities in contracts

·         Building governance capabilities among the poor

·         The essence of maturation model.

·         Organization of the group

·         Mobilizing the savings

·         Investing those savings

·         Access to bank capital

·         The ecosystem for wealth creation

Integrative Questions:                          

1.    Is it really necessary to mobilize the savings?

2.    How can you help the poor comprehend that is it a win-win situation?

3.    Who can reduce the asymmetries of information?

4.    What was the symptom of a maturing economy?

5.    What should be the focus of any one component of the ecosystem?