In 2007 Danone and the Grameen Bank founded a joint venture in Bangladesh to provide nutrition at affordable prices for the poor population of the country - the so called "Base of the Pyramid" which represents the large share of people living in extreme and moderate poverty. To achieve an efficient supply of the people with nutrition, a new business model was created by Danone.
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| Sustainable Supply Chain Management |
Micro-factories have been built in decentralized locations to produce yogurt and Danone cooperated exclusively with local farmers as suppliers for raw materials and employed only local small and micro-entrepreneurs as distributors. Grameen acted as a facilitator in the local business environment while Danone brought in managerial and technological expertise. Furthermore, the whole supply chain was located at the BoP in Bangladesh, which also represents the consumer target group. The milk was procured from farmers near the newly designed small micro-factories where the yogurt for the BoP was produced. The yogurt was then sold to the local population. As many locals which are involved in the supply chain had a very low level of education, management and technical trainings as well as educational programs were provided to women working as distributors, to local farmers and to dairy employees.
In this project Danone to combine social goals with the goal of efficient and cost-effective operations. Furthermore, the business experience at the BoP in developing countries should help the entire corporation develop agile and responsive manufacturing and supply chain operations, and thus be able to deliver (more) competitive products in Western markets. Seems to be an innovative business model - learning at the BoP and transfer to the top.
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