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Sustained Competitive Advantage of Different Sized Multinational
Corporations in Rural Base of the Pyramid Markets:
An Exploration of Isolating Mechanisms from a Combined Natural-Resource-
Based View and Dynamic Capabilities Perspective
Maastricht University
School of Business and Economics
Maastricht, 07.12.2015
Paul Geuting I6102371
M.Sc. IB – Strategy & Innovation
Tutor: Dr. Marc van Wegberg
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Acknowledgements
Herewith I would like to express my gratitude towards Dr. Marc van Wegberg who supervised and
guided me throughout the whole thesis process. I very much appreciate his support and expertise
regarding sustainability and scientific research.
Further, I would like to thank João Silveira Lobo for his competent advice and literature
recommendations in the field of resource based theory.
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Abstract
This thesis explores how multinational corporations of different sizes create barriers to imitation
and therefore sustain competitive advantage in rural and informal Base of the Pyramid economies.
These markets require close cooperation with local partners in a dynamic environment that lacks
imposable property rights and follows a different rationale than developed markets. In order to
explore how competitive advantage is sustained by different sized multinational corporations at the
Base of the Pyramid, the natural-resource-based view and the dynamic capabilities perspective are
integrated. Based on this integration the natural-resource-based view is extended by identifying
critical dynamic capabilities that are assumed to be sources of competitive advantage at the Base
of the Pyramid. Further, a contrasting case study explores how the identified dynamic capabilities
are protected and their competitive advantage is sustained by isolating mechanisms that create
barriers to imitation for a small to medium sized and a large multinational corporation. The case
study results give grounds to assume that most resource-based isolating mechanisms create barriers
to imitation that are fairly high for large and established multinational corporations that operate at
the rural Base of the Pyramid and have a high product and business model complexity. On the
contrary, barriers to imitation were found to be lower for young and small to medium sized
multinational corporations with low product and business model complexity that according to some
authors represent the majority of rural Base of the Pyramid companies. Particularly for small to
medium sized multinational corporations the case study finds a relationship- and transaction-based
unwillingness of local partners to act opportunistically rather than a resource-based inability to
imitate. By offering an explanation of sustained competitive advantage for small to medium sized
multinational corporations at the rural Base of the Pyramid this thesis closes an important research
gap and recommends to include institutional and transaction-based research perspectives.
Keywords: isolating mechanisms, base of the pyramid, natural-resource-based view, dynamic
capabilities, sustained competitive advantage
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Table of Contents
1. Introduction ................................................................................................................................ 1
2. Good Sustainability .................................................................................................................... 3
3. Context – “Creating a fortune with the BoP”.......................................................................... 5
3.1 The BoP as Consumer ............................................................................................................ 5
3.2 The BoP Market Environment ................................................................................................ 6
3.3 MNCs – Current Situation & Strategic Obstacles .................................................................. 7
4. Literature Review ....................................................................................................................... 9
4.1 Resource-Based View and Underlying Isolating Mechanisms .............................................. 9
4.1.1 Isolating Mechanism: Unique Historical Conditions and Path Dependency ................. 11
4.1.2 Isolating Mechanism: Social Complexity ...................................................................... 11
4.1.3 Isolating Mechanism: Resource Interconnectedness ..................................................... 11
4.1.4 Isolating Mechanism: Causal Ambiguity (Tacitness, Complexity, Specificity) ............ 12
4.2 Natural-Resource-Based View ............................................................................................. 12
4.3 Dynamic Capabilities Perspective ........................................................................................ 13
4.4 Integration of Natural-Resource-Based-View and Dynamic Capabilities Perspective ........ 15
4.5 Extension of Integrated Theories and Definition of BoP Specific Dynamic Capabilities ... 16
4.5.1 Dynamic Capability: Bottom-up Business Model Innovation ....................................... 16
4.5.2 Dynamic Capability: Partnering and Stakeholder Integration ....................................... 17
4.5.3 Dynamic Capability: Regenerative Managerial Entrepreneurship ................................ 18
5. Research Gap and Model ........................................................................................................ 19
6. Methodology ............................................................................................................................. 21
6.1 Case Study Approach ........................................................................................................... 21
6.2. Sampling Strategy................................................................................................................ 22
6.3. Data Collection Method....................................................................................................... 23
6.4. Selected Cases ..................................................................................................................... 24
6.4.1 Case 1: Leef Blattwerk GmbH ....................................................................................... 24
6.4.2 Case 2: Millicom ............................................................................................................ 25
6.4.3 Applied Selection Criteria .............................................................................................. 25
7. Data Analysis and Results ....................................................................................................... 26
7.1 Assessment of Companies and Market Environment ........................................................... 26
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7.2 Exploration of Dynamic Capabilities ................................................................................... 27
7.2.1 Dynamic Capability: Bottom-up Business Model Innovation ....................................... 27
7.2.2 Dynamic Capability: Partnering and Stakeholder Integration ....................................... 28
7.2.3 Dynamic Capability: Regenerative Managerial Entrepreneurship ................................ 30
7.3 Exploration of Isolating Mechanisms ................................................................................... 31
7.3.1 Isolating Mechanism: Unique Historical Conditions and Path Dependency ................. 31
7.3.2 Isolating Mechanism: Social Complexity ...................................................................... 31
7.3.3 Isolating Mechanism: Resource Interconnectedness ..................................................... 32
7.3.4 Isolating Mechanism: Causal Ambiguity (Tacitness, Complexity, Specificity) ............ 33
7.4 Additional Findings .............................................................................................................. 35
8. Discussion .................................................................................................................................. 35
8.1 Theory Development ............................................................................................................ 35
8.1.1 Resource-Based Isolating Mechanisms at the BoP ........................................................ 35
8.1.2 Behavioral Isolating Mechanisms at the BoP – Handicap Signaling as a Relationship-
Based Explanation of Inimitability ......................................................................................... 36
8.2 Limitations and Future Research .......................................................................................... 38
8.3 Practical Implications ........................................................................................................... 39
9. Conclusion ................................................................................................................................. 40
Bibliography ................................................................................................................................. 42
Appendices .................................................................................................................................... 47
Appendix 1. Five-Step Research Approach ............................................................................... 47
Appendix 2. Semi Structured Interview Guide .......................................................................... 47
Appendix 3. Transcript Leef Blattwerk GmbH .......................................................................... 51
Appendix 4. Official Statement of Original Thesis .................................................................... 61
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List of Illustrations
Figure 1: The Sustainability Portfolio ............................................................................................. 4
Figure 2: Research Model .............................................................................................................. 21
Figure 3: Research Model (Case Study Results) ............................................................................ 38
Table 1: Examples Poverty Penalty Concept .................................................................................. 6
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1. Introduction
Nowadays, terrorism, civil wars and streams of refugees are ever-present and challenging
phenomena with tremendous influence on the international political and social landscape. Many
researchers argue that this is at least in part because those under a certain income threshold –
commonly defined as Base of the Pyramid (BoP) – suffer from being excluded from the world’s
economic system, resulting in poverty and social inequality as important factors contributing to
political and social turmoil (Burgoon, 2006; Moghaddam, 2005; Turk, 1982). At the same time
multinational corporations (MNCs) have difficulties to deliver profitability and growth in times of
mature markets on one hand, while winning back legitimacy vis-à-vis an increasingly critical
society on the other. Several researchers believe that targeting the BoP as consumers, producers
and equal partners in a way that creates mutual value results in a win-win situation because
untapped BoP markets promise growth, profit and legitimacy for MNCs and create infrastructure,
wealth and stability at the BoP (Hart, 2005; Prahalad, 2005; Lodge & Wilson, 2006; Rangan, 2007).
However, when targeting those markets MNCs are faced with major challenges concerning the
protection of knowledge and competitive advantage. BoP literature suggests that this is because
compared to developed markets both parties have to work together more closely, meaning that
MNCs are required to share some of their resources (London & Hart, 2004; Munir, Gregg & Ansari,
2012). For instance, MNCs need to receive local target group and market-specific information on
one hand and have to transfer enabling knowledge and skills to BoP business partners on the other.
Moreover, this thesis focuses on rural African and South Asian BoP markets. They are
characterized as dynamic and informal economies that fundamentally differ from developed
markets concerning factors such as infrastructure, scalability and geographical dispersion (Prahalad
& Hammond, 2002; World Bank Group, 2007). It is argued that small to medium sized MNCs
appear to be better able to be profitable in these environments because they rely less on economies
of scale that are difficult to realize in dispersed and rural markets (Karnani, 2007; Karamchandani,
Kubzansky & Frandano, 2009). Unlike developed markets, informal BoP economies also rely less
on property-rights-based constructs such as legal contracts, copyrights and patents but more on
social ties, informal agreements and networks (Hart & London, 2005; Munir, Gregg & Ansari,
2012; Reficco & Márquez, 2012). As existing theories mostly focus on developed markets and
comparably large companies, there are reasons to assume that so far the inimitability and therefore
sustainability of competitive advantage in informal and rural BoP economies is insufficiently
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examined (Hart & Dowell, 2011; Hoskisson, Eden, Lau & Wright, 2000; Barney, Wright &
Ketchen, 2001). In order to be successful at the BoP and create local growth, it is of utmost
importance that MNCs are able to defend sources of competitive advantage from imitation by local
alliance partners. Therefore, this thesis attempts to close this research gap by answering the
following research question.
Research question: How do MNCs of different sizes sustain competitive advantage in rural and
informal BoP economies?
The research question is answered along a five-step approach (see appendix 1). It starts with an
introduction of the sustainability construct in chapter 2 and continues with a BoP context analysis
of benefits and obstacles that MNCs face when entering BoP markets in chapter 3. A thorough
literature review then introduces the resource-based view (RBV), the natural-resource-based view
(NRBV) and the dynamic capabilities perspective in chapter 4. In order to examine dynamic and
rural BoP markets, the NRBV, which focuses on external natural drivers of competitive advantage
in stable market environments and the dynamic capabilities perspective that explains competitive
advantage in dynamic markets, are combined (Hart, 1995; Teece, Pisano & Shuen, 1997). After
evaluating the NRBV and dynamic capabilities perspective as complementary, the NRBV is
extended towards an explanation of competitive advantage at the BoP by categorizing three clusters
of dynamic capabilities that are assumed to be critical success factors in informal and rural
economies. After describing the research model and methods in chapter 5 and 6, a contrasting case
study explores how barriers to imitation are raised by which isolating mechanisms in chapter 7.
This analysis of how the identified dynamic BoP capabilities are protected as sources of sustained
competitive advantage is conducted based on a large and a small to medium sized MNC. The
contrasting case study does not intent to test the applicability of isolating mechanisms but develops
theory based on an in-depth exploration of how barriers to imitation are created that takes into
consideration various contextual factors.
Subquestion 1: How do MNCs of different sizes create barriers to imitation that successfully
prevent the imitation of critical dynamic capabilities in rural and informal BoP economies?
Chapter 8 discusses the results of the case study, develops theory, outlines limitations as well as
future research opportunities and derives practical implications. Several researchers encourage to
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evaluate the extent to which existing theories such as the NRBV are able to explain phenomena
like sustained competitive advantage in emerging BoP markets (Aragón-Correa, Hurtado-Torres,
Sharma & García-Morales, 2008; Hart & Dowell, 2011; Hoskisson, Eden, Lau & Wright, 2000).
Hence, answering the second subquestion this thesis discusses whether an extended NRBV
sufficiently explains inimitability and therefore sustainability of competitive advantage of large
and small to medium sized MNCs in an informal and rural BoP environment or whether other
research perspectives have to be integrated.
Subquestion 2: Does the extended NRBV sufficiently explain sustained competitive advantage in
rural and informal BoP economies for MNCs of different sizes?
Finally, chapter 9 gives a summarizing conclusion and answers the above mentioned research and
subquestions.
2. Good Sustainability
In order to embed the thesis in a general scientific and practical context, the underlying concept of
sustainability is defined in this chapter. Further, an overview of sustainability strategies and an
explanation of strategies that are currently applied by companies are given.
According to a report of the United Nations World Commission on Environment and Development
(Lebel & Kane, 1987), a generally accepted definition describes sustainability as “meeting the
needs of the present without compromising the ability of future generations to meet their needs”
(p. 8). Important fields of action that have to be addressed in order to enable future generations to
meet their needs are described by the triple bottom line and the environmental burden formula.
According to the triple bottom line, the impact of sustainable activity may be measured in three
terms: people, planet and profit (Elkington, 1998). While the people dimension aims at sustainable
behavior towards all other human stakeholders that are linked to a company, the planet dimension
is concerned with a fair treatment of the natural environment such as the reduction of the ecological
footprint. Finally the concept of profit underlines the importance of financial autonomy as a basis
for beneficial and long-term relationships that create mutual value (Elkington, 1998).
Another approach defines human impact on the environment based on the formula 𝐸𝐵 = 𝑃 ∗ 𝐴 ∗ 𝑇
(Ehrlich & Holdren, 1971). Having a closer look at this function consisting of population (P),
affluence (A) as a synonym for consumption and technology (T) it can be seen that the
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environmental burden (EB) can only be reduced by lowering one or more of those factors. A
reduction of the population does not seem like an ethical target for planned intervention and
decreasing affluence would most likely cause the population (P) to grow as there is a negative
relationship between the degree of education that is linked to affluence and the number of born
children (Basu, 2002; Hart, 1997). Therefore, only two options remain. While the innovation of
technology (T) has the potential to reduce environmental burden, a stabilization of the world’s
population can only be achieved if education and growth is brought to those living in poverty (Hart,
1997).
The way that companies deal with the above-mentioned fields of action developed evolutionarily.
Today most companies have implemented incremental greening strategies that tackle
environmental challenges of today such as pollution prevention and product stewardship strategies
which focus on a more efficient use of existing technologies (Hart, 2005). The next step would be
the implementation of disruptive beyond greening strategies such as clean technology and base of
the pyramid that focus on the environmental challenges of the future by creating new sustainable
solutions (Hart, 2005). Further, those strategies may be distinguished along their internal or
external focus. While pollution prevention internally aims at avoiding waste before it is created,
product stewardship goes beyond waste prevention and takes responsibility for the whole external
product lifecycle. Clean technology strategies focus on the internal development of new
innovations while BoP strategies require external business model adjustments to profitably address
the needs of the poor (see figure 1).
Figure 1: The Sustainability Portfolio 1
1 Adapted from “Beyond greening: strategies for a sustainable world” by S. Hart, 1997, Harvard Business Review, 75(1), p. 74.
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Nowadays most companies incrementally focus on today’s challenges. However, it will be of
crucial importance to disruptively address tomorrow’s challenges in the long run, taking into
consideration the dimensions of the triple bottom line and the environmental burden formula.
3. Context – “Creating a fortune with the BoP”
Because the BoP was highlighted as a strategic and increasingly important field of sustainable
action in the context of disruptive beyond greening strategies, the BoP as a target group as well as
its market environment is defined in this chapter. Also an overview of potential strategic
opportunities and threats that MNCs face when targeting BoP markets is provided.
3.1 The BoP as Consumer
There are several ways and attempts to define what is commonly understood as the BoP. A very
comprehensive and comparable way of categorization is the definition of certain income
thresholds. Prahalad and Hammond (2002) claim that 4 billion people (65% of the global
population) earn less than $2,000 per year and therefore belong to the BoP.
Another way of categorization would be purchasing power parity (PPP) as a ratio to identify BoP
affiliation based on the relative price of a basket consisting of identical services and goods. Defined
PPP values at the BoP differ from $1,500 to $3,000 annually and $1 to $4 per day (London & Hart,
2011). Some researchers define BoP affiliation more precisely with respect to the country, e.g.
$3.35 (Brazil), $1.89 (Ghana), $2.11 (China) and $1.56 (India) a day (World Bank Group, 2007).
Next to a relatively lower disposable income, Mendoza (2008) explored the poverty penalty
concept and among other things finds that the target group at the BoP is penalized by higher prices
or lower quality. Prahalad and Hammond (2002) also came to the conclusion that inhabitants of
slums have to pay multiple times more for products and services such as drinking water and phone
calls than first world consumers (see table 1).
Despite varying attempts to define the BoP in terms of disposable income, PPP or poverty penalty
indexes, it becomes clear that the BoP is a high volume rather than a high margin market consisting
of many low-income individuals (Hart, 2005).
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Table 1: Examples Poverty Penalty Concept 2
Because a mere quantitative description of the target group is insufficiently preparing the following
case analysis, it seems reasonable to additionally provide a detailed understanding of the BoP
market that is based on a qualitative description of market characteristics and consumption
behavior.
3.2 The BoP Market Environment
In general BoP markets are being characterized as dynamic, informal, heterogeneous and without
functioning labor or product markets (London & Hart, 2011). While most BoP markets in Africa
and Asia are characterized as community-based and rural, BoP markets in South America and
Eastern Europe are mostly found in urban environments (World Bank Group, 2007).
London and Hart (2011) describe five key differences between doing business in BoP and Top of
the Pyramid (ToP) markets. First of all, there are plenty of unaddressed basic needs at the BoP such
as clean water supply, sanitation, healthcare and communications services. Second, poor
infrastructure and undeveloped distribution channels make it difficult to scale businesses in a
reliable way. Furthermore, people have restricted access to information, which increases
communication problems from a marketing and sales perspective. Next, corruption is a severe
problem in developing countries. As discussed before people in those low-income markets also
have to pay relatively higher prices for basic products and services compared to those in the
developed world.
2 From “Serving the world´s poor, profitably” by C. Pralahad and A. Hammond, 2002, Harvard Business Review,
80(9), p. 52.
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The fact that many poor people live in these relative high cost systems without the protection of
laws, such as rent control or prevention of price gouging, is in part due to the existence of an
informal economy that follows different rules (Hart & London, 2005). Informal economies are
much smaller in developed countries compared to developing countries. For example, the informal
economy in Mexico is believed to make up for about 30% until 40% of the overall economy (De
Soto, 2000). While business relationships in formal economies are mostly based on property rights
such as legal contracts and patents, the predominant regulators in informal economies are social
ties and trust-based contracts (Hart & London, 2005; Munir, Gregg & Ansari, 2012; Reficco &
Márquez, 2012). For instance, reliance on the community and social institutions to mediate between
conflicting parties is high because many people do not own legal documents (London & Hart,
2005) such as contracts of land registration or formal leasing agreements. Further, Rufin and
Rivera-Santos (2010) emphasize the importance of local social and business networks as a
mechanism of institutionalizing and imposing agreements that are of a social rather than a legal
nature.
3.3 MNCs – Current Situation & Strategic Obstacles
A MNC is defined as “a corporation that has its facilities and other assets in at least one country
other than its home country. Such companies have offices and/or factories in different countries
and usually have a centralized head office where they co-ordinate global management.” 3
Nowadays MNC are facing several challenges from different stakeholders. On one hand, internal
stakeholders and shareholders expect MNCs to deliver high growth rates and profit margins in
mainly saturated markets, where it becomes increasingly difficult to identify new products and
growth opportunities (Hart & Christensen, 2002; Hart, 2005). On the other, MNCs have to meet
social expectations articulated by governments and public society, represented by NGO´s and other
interest groups that request a high degree of legitimacy and oppose unethical behavior such as
pollution or third world exploitation (Werther & Chandler, 2005; Hart & Christensen, 2002).
Currently the trend is shifting towards entering emerging markets such as Africa, Latin America,
Eastern Europe and Asia that offer new growth opportunities (London & Hart, 2004; World Bank
Group, 2007). Prahalad & Hammond (2002) name three opportunities that may solve the described
challenges concerning growth and legitimacy as a result of targeting the BoP – top-line growth,
3 http://www.investopedia.com/terms/m/multinationalcorporation.asp
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reduced costs and access to innovation. First, despite the fact that individual buying power is
relatively low, the mere size of BoP markets results in top-line growth. Second, reduced costs might
be achieved by operating in countries with lower labor and production expenses (Prahalad &
Hammond, 2002). Finally, using BoP markets as laboratories to disruptively innovate products and
business models may result in a bottom-up transfer of knowledge from BoP to ToP markets
(Prahalad & Hammond, 2002; Hart & Christensen, 2002).
Most companies that targeted BoP markets in the past focused on designing lower cost products
that can be sold to the poor (Simanis & Hart, 2009). However, a new generation of BoP strategies
has shown greater success with an incorporation of BoP perspectives and entrepreneurs in products
and business models as consumers, producers and collaborators, meaning that those strategies do
not aim at “creating a fortune at the base of the pyramid” but rather “creating a fortune with the
base of the pyramid” based on cooperation and alliances (London & Hart, 2011, p. 1; Munir, Gregg
& Ansari, 2012; Tashman & Marano, 2010).
Because they are profit driven and have sufficient financial resources, it is assumed by Hart (2005)
that large MNCs are the institutions with the highest power and influence to enable a worldwide
and scalable shift towards a sustainable future. Karnani (2007) opposes Hart and claims that small
and medium sized MNCs are more likely to profitably exploit business opportunities and address
the needs of the poor. Main reasons are geographical dispersion and a lack of reliable infrastructure,
especially in rural areas (Karnani, 2007). In this setting the most important competitive advantages
of large MNCs, such as economies of scale, cannot be fully exploited. Furthermore, Karnani (2007)
assumes that the products that are needed at the BoP are of lower complexity. While most BoP
research relies on the observation of few cases, Karamchandani, Kubzansky and Frandano (2009)
conducted a study based on a comparably large sample size which confirms Karnani´s assumptions
and finds that only one third of profitable market-based solutions was introduced by large MNCs.
Although there are promising business opportunities at the BoP, MNCs are still reluctant to enter
those markets for several reasons. It is often assumed that addressing the BoP is unprofitable
because of low disposable incomes (Prahalad & Hammond, 2002). Hart (2005) calls this
phenomenon the great trade-off illusion, describing a fear of financial losses coming along with
the attempt to address the BoP. Therefore, most MNCs replicate existing business models in order
to target the small upper classes of developing countries (Prahalad & Hammond, 2002; Prahalad
& Lieberthal, 2003). Further, the already described dispersion of rural markets, cultural differences
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and problems such as corruption and a lack of property rights constructs are assumed to be major
obstacles that result in a lack of investment (Kistruck Sutter & Smith, 2013; Webb, Kistruck,
Ireland & Ketchen, Jr., 2010). Because informal economies rely less on legal contracts and
knowledge protection but more on social institutions, the monitoring of behavior and the avoidance
of potential knowledge drain become increasingly difficult (Kistruck, Sutter & Smith, 2013).
However, most strategies aggressively attempt to impose property rights instead of looking for
different ways to protect resources (London & Hart, 2004).
So far, it has been examined that barriers to imitation from developed markets may insufficiently
explain the protection of knowledge in informal BoP environments that appear to favor small to
medium sized MNCs. In order to prepare an in-depth exploration of how barriers to imitation are
created in dynamic and informal BoP economies, the next chapter introduces the central theories
of this thesis.
4. Literature Review
In this chapter the interconnected underlying theories of this thesis, namely the RBV, the NRBV
and the dynamic capabilities perspective, are introduced. Special emphasis is put on isolating
mechanisms that raise barriers to imitation and therefore determine the sustainability of
competitive advantage. The NRBV and the dynamic capabilities theory were developed
independently from each other and at different times. This thesis aims to integrate the two to apply
them to dynamic BoP markets. Finally, after evaluating both theories as complementary the NRBV
is extended towards an inclusion of external social drivers of competitive advantage by identifying
central dynamic BoP capabilities that synchronize a company´s resource base with its socio-
economic environment.
4.1 Resource-Based View and Underlying Isolating Mechanisms
According to the RBV, companies own resources and competences that result in temporary or
sustained competitive advantage if certain resource characteristics are in place (Barney, 1991). A
market is then chosen if the existing resource base is believed to increase the likeliness of success
in this market. Central concepts of the RBV, that were already influenced by Penrose in 1959, are
the terms of competitive advantage, sustained competitive advantage, resources, competences and
isolating mechanisms. Competitive advantage describes a situation in which only one company
generates value with a strategy that no other company has in place, while sustained competitive
10
advantage additionally requires the value of this strategy not to be replicated by the competition in
the long run (Barney, 1991). According to Wernerfelt (1984) resources are defined as the tangible
and intangible strengths and weaknesses such as brand, production facilities, workforce and
information that are controlled by the firm. There are three categories of resources: physical
resources such as facilities and machines; human resources like knowledge and social capital; and
organizational resources such as processes and decision making structures (Barney, 1991).
Competences, that are also called organizational routines or processes, are organization wide
enabling activities such as quality management or procurement (Teece, Pisano & Shuen, 1997).
Core competences are defined as an organization’s essential and business driving competences
(Teece, Pisano & Shuen, 1997).
A basic assumption of the RBV is that resources and competences are distributed heterogeneously
between companies (Peteraf, 1993). In order to generate competitive advantage they also have to
be immobile, meaning that they have to be developed internally because they cannot be traded on
factor markets (Grant, 1991; Barney, 1991; Lavie, 2006; Mahoney & Pandian, 1992). Next to being
immobile and distributed heterogenously, resources may only be sources of sustained competitive
advantage if they are VRIN, meaning that they have to be valuable, rare, inimitable and non-
substitutable (Barney, 1991). Resources are valuable if they produce rents and help to tackle
challenges or seize opportunities in the firm’s environment and rare if they are not possessed by
the competition (Barney, 1991). Competitive advantage is only temporary and not sustainable if
those resources are valuable and rare but not inimitable and non-substitutable (Barney 1991;
Dierickx & Cool, 1989). Non-substitutability suggests that there should not be any resource that is
of similar strategic value or produces similar outcomes (Barney 1991; Wernerfelt, 1984). Finally,
a resource is inimitable if it cannot be easily copied and developed by competitors (Barney 1991).
The inimitability of resources is due to barriers to imitation that are raised by isolating mechanisms
(Rumelt, 1997). “An isolating mechanism is any knowledge, physical, or legal barrier that may
prevent replication of the value-creating new task, product, or service by a competitor” (Lepak,
Smith & Taylor, 2007, p.188). From a perspective of new institutional economics, property rights
are important and widely used legal isolating mechanisms and sources of inimitability in today’s
business world (Lawson, Samson & Roden, 2012). According to Hooley, Greenley, Cadogan and
Fahy (2005) property rights are defined as isolating mechanisms that raise barriers to imitation due
to legal contracts, trademarks, copyrights, patents, non-disclosure agreements and the like. Next to
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those property-rights-based isolating mechanisms that legally prohibit imitation, competitive
advantage may be rooted in resource characteristics themselves. According to Barney (1991) and
Dierickx and Cool (1989) there are four central resource-based isolating mechanisms.
4.1.1 Isolating Mechanism: Unique Historical Conditions and Path Dependency
Unique historical conditions and path dependency are isolating mechanisms that create barriers to
imitation because the resources a company possesses and the way it exploits them depend on its
specific history and development (Barney, 1991). Due to the fact that resources and capabilities of
a company follow a company-specific path and become co-specialized over time, they have to be
developed internally as they cannot be acquired and exploited in a resource setting of another
company (Amit & Schoemaker, 1993; Kogut & Zander, 1992; Peteraf, 1993). For instance,
imitating and exploiting the innovative culture of a company may be a challenge because it was
influenced by the time it was founded and differentiated together with other resources and
competences along its upcoming path.
4.1.2 Isolating Mechanism: Social Complexity
Another source of inimitability is social complexity, describing a company’s lack of understanding
concerning social events, situations or relationships such as managerial behavior or complex
stakeholder relationships (Barney (1991). Because of their inherent social complexity these
competences cannot be imitated even if competitors understand the causal relationship between
resources and competitive advantages. For example imitating and exploiting complex factors such
as leadership behavior is difficult as it is hardly possible to influence them in a systematic manner.
4.1.3 Isolating Mechanism: Resource Interconnectedness
Resource interconnectedness (Dierickx & Cool, 1989) or complementary resources and
capabilities (Duschek, 2004) describe the dependence of resource accumulation and exploitation
on the availability of other resources. This means that a resource or a bundle of resources only
results in the valuable generation of rents in combination with other resources that a company owns
or has access to. It may for example be more difficult for a firm to develop and exploit best practice
sales capabilities without having an extensive distribution network.
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4.1.4 Isolating Mechanism: Causal Ambiguity (Tacitness, Complexity, Specificity)
Causal ambiguity describes the non-transparent connection between a company’s resources and its
competitive advantage (Barney (1991). Causal ambiguity requires both the company that owns the
resources as well as the company that attempts to imitate them to lack the knowledge of which
resources result in competitive advantage. This is because the knowledge about which resources
have to be imitated could be obtained by hiring away key functions from the initial company by
the competitor. Causal ambiguity can be based on: tacitness, complexity and specificity (Reed &
De Fillippi, 1990).
Tacitness describes experience-based skills and behaviors that are not codified or written down and
are a result of everyday repetition and learning-by-doing routines (Reed & De Fillippi, 1990;
Tsang, 1998). Because of this high degree of informality, competitors are assumed to have
difficulties to identify potential sources of competitive advantage.
Complexity contributes to inimitability due to complicated and inextricable norms such as
behavioral patterns, technologies, skills and systems (Barney, 1991). Accordingly, the sources of
competitive advantage are not transparent and may hardly be understood by individual employees
(Reed & De Fillippi, 1990). Since a high concentration of knowledge makes a firm particularly
vulnerable to competitors that may hire away knowledge-holding key individuals, complexity
raises an important barrier to imitation that protects a company from undesired knowledge drain.
Last but not least specificity describes ambiguity that is caused by a partner specific relationship
that makes it difficult for competitors to understand the link between resources and competitive
advantage by only examining the resources of the targeted firm without obtaining knowledge about
the complementing resources of the partner as well (Dyer & Singh, 1998).
4.2 Natural-Resource-Based View
According to Branco and Rodrigues (2006) “one of the most important weaknesses of the RBV is
related to the lack of understanding they provide on the influence that the relationships between a
firm and its environment have on the firm’s success” (p. 118). In his pioneering paper A Natural-
Resource-Based View of the Firm Hart (1995) also criticized that the RBV “systematically ignores
the constraints imposed by the biophysical (natural) environment” (p. 986). Russo and Fouts (1997)
support Hart´s criticism and claim that company and environmental performance are linked.
According to Hart (1995), future competitive advantages that are based on lower costs or better
products are a result of resources and capabilities that address environmental driving forces such
13
as global warming. Therefore, Hart (1995) included a natural perspective into resource-based and
strategic management theory by promoting the already introduced three connected proactive
environmental strategies (see figure 1) of pollution prevention (emission minimization), product
stewardship (product life-cycle optimization) and sustainable development (reduction of negative
environmental impact linked to a company´s growth ambitions, particularly in third world
markets).
Applying the triple-bottom-line it can be seen that Hart (1995) approaches sustainability from a
planet and profit rather than a people perspective. Although it cannot be denied that the
environment has to be protected from unsustainable development in third world countries, Hart
(1995) puts much less emphasis on socio-economic aspects concerning growth at the base of the
pyramid than on pollution prevention and product stewardship strategies that target the natural
environment. Hart recognized this himself and already in 1995 recommended further research on
socio-economic BoP strategies based on case study approaches. Fifteen years after A Natural-
Resource-Based View of the Firm was published in 1995, Hart and Dowell (2011) revisited and
summarized the research efforts to develop a natural-resource-based view of the firm and conclude
that most research still focuses on today´s internal pollution prevention rather than tomorrows
external BoP strategies. Thus, Hart and Dowell (2011) point at a lack of research concerning the
question of how MNCs may contribute to growth at the BoP and encourage to identify those
dynamic capabilities that are necessary for MNCs to be successful in emerging markets. It is further
claimed that so far the NRBV and the RBV have been mostly applied to explain sustained
competitive advantage of large MNCs (Aragón-Correa, Hurtado-Torres, Sharma & García-
Morales, 2008; Barney, Wright & Ketchen, 2001; Runyan, Huddleston & Swinney, 2007).
Concerning the lack of BoP research in the context of the NRBV framework, this is of particular
importance as BoP markets were identified to favor small to medium sized MNCs (Karnani, 2007;
Karamchandani, Kubzansky & Frandano, 2009).
4.3 Dynamic Capabilities Perspective
The RBV attempts to explain sustained competitive advantage in a static industry environment and
assumes that organizations incrementally improve and respond to change based on available know-
how (Barney, 1991; Eisenhardt & Martin, 2000). However, strategic management requires a
proportionate consideration of incremental resource exploitation in terms of efficiency and cost
reduction and disruptive resource exploration, describing the development of new business models
14
and growth opportunities (Gupta, Smith & Shalley, 2006; Kogut & Zander, 1992; Wernerfelt,
1984). Therefore, a continuous adaption of resources as suggested by the RBV does not sufficiently
explain the resource exploration activities that are necessary to respond to highly dynamic
environments (Madhok, 1997; Teece, Pisano & Shuen, 1997). Teece, Pisano and Shuen (1997)
extended the RBV towards an explanation of sustained competitive advantage in unstable and
dynamic markets. Those high-velocity environments are being described as highly ambitious and
determined by continuous industrial, socio-economic and regulatory changes (Barreto, 2010).
Further, in those settings it is difficult to define market boundaries and successful best practice
business models or companies (Eisenhardt & Martin, 2000). Dynamic capabilities are defined as
“the firm´s ability to integrate, build and reconfigure internal and external competences to address
rapidly changing environments” (Teece, Pisano & Shuen, 1997, p. 516) and consist of “specific
strategic and organizational processes like product development, alliancing, and strategic decision
making that create value for firms within dynamic markets by manipulating resources” (Eisenhardt
& Martin, 2000, p. 1106). In opposition to the continuous improvement routines in stable
environments, as assumed by the RBV, different dynamic capabilities are required in high-velocity
environments (Eisenhardt & Martin, 2000).
Ambrosini, Bowman and Collier (2009) defined a hierarchical categorization of dynamic
capabilities. Incremental dynamic capabilities (first level) deal with the continuous advancement
of the organizations´ resource base and are needed in a static environment. An example of an
incremental dynamic capability would be process optimization activities that slightly change the
resource base and result in continuous improvements such as waste reduction. Renewing dynamic
capabilities (second level) are those that disruptively develop the resources of an organization and
are needed in dynamic environments (Ambrosini, Bowman & Collier, 2009). A practical example
would be the aggressive extension of an existing product brand into new product categories or
domains. Finally, regenerative dynamic capabilities (third level) are based on Winters´ higher-
order capabilities (2003) and unlike the other two categories of dynamic capabilities are only
indirectly changing the company´s resources itself. This is because they determine on a meta-level
how an organization changes its resource base by adapting the above-mentioned dynamic
capabilities to better respond to their dynamic environment (Ambrosini, Bowman & Collier, 2009).
In line with the RBV rationale, the competitive advantage of dynamic capabilities and their
15
sustainability depend on the already introduced VRIN characteristics (Eisenhardt & Martin, 2000;
Barney, Wright & Ketchen, 2001; Wang and Ahmed, 2007).
Summarizing, the RBV explains competitive advantage in a stable environment and was developed
towards an inclusion of natural driving forces as determinants of competitive advantage by the
NRBV. Little later the dynamic capabilities theory emerged, explaining competitive advantage in
dynamic environments. While temporary competitive advantage in both dynamic and stable
environments is rooted in resources and competences that are valuable and rare, sustained
competitive advantage additionally requires them to be non-substitutable and inimitable.
4.4 Integration of Natural-Resource-Based-View and Dynamic Capabilities Perspective
The NRBV appears to be a suitable holistic framework to include the natural and socio economic
environment into strategic management and a useful theory to explore the isolating mechanisms
that create barriers to imitation in informal economies. However, as recommended by Hart and
Dowell (2011) it has to be developed towards an explanation of competitive advantage at the BoP.
At first sight applying the NRBV to highly dynamic BoP markets seems problematic as it is based
on the RBV that explains competitive advantage in stable market environments. Integrating the
NRBV and the dynamic capabilities theory may solve this problem. This is in line with Hart and
Dowel (2011), who generally suggest that the NRBV and the dynamic capabilities perspective,
which was introduced in the meanwhile as an extension of the RBV and describes competitive
advantage in high-velocity markets, may mutually benefit from each other.
Although the NRBV (Hart, 1995) understands capabilities as bundled resources according to
Barney´s (1991) definition, and not as the renewing dynamic capabilities described by Teece,
Pisano and Shuen (1997), the dynamic capabilities theory is compatible with the NRBV for the
following reasons.
Despite the fact that dynamic capabilities were introduced after the NRBV, the NRBV´s three
proactive environmental strategies deal with a similar phenomenon because they are described as
bundled resources that address dynamic, external and natural driving forces (Hart, 1995). Aragón-
Correa and Sharma (2003) support this by claiming that proactive strategies may have
characteristics of dynamic capabilities because firms define strategies in order to align their
activities with environmental requirements. Accordingly, proactive strategies as defined by Hart
(1995) may be understood as dynamic capabilities that orchestrate existing and potential resources
towards a successful response to environmental challenges.
16
Applying the hierarchical categorization of dynamic capabilities by Ambrosini, Bowman and
Collier (2009) the NRBV´s greening strategies such as pollution prevention and product
stewardship that deal with today’s internal and external challenges may further be understood as
incremental dynamic capabilities (first level) that continuously improve a company´s resource
base. Also the NRBV´s beyond greening strategies, such as clean technology and BoP that address
tomorrow’s internal and external challenges, may be categorized as renewing dynamic capabilities
(second level) that disruptively adapt a company´s resource platform to a dynamic and fast
changing environment.
Summarizing, the basic constructs of the NRBV and dynamic capabilities perspective were
identified as being compatible. Therefore, they appear to be suitable theories to examine isolating
mechanisms that raise barriers to imitation in a dynamic, rural and informal BoP environment.
4.5 Extension of Integrated Theories and Definition of BoP Specific Dynamic Capabilities
Based on the integration of the NRBV and dynamic capabilities perspective, this chapter attempts
to include the dynamic, external BoP environment into the NRBV by structuring BoP literature
along different categories of relevant dynamic BoP capabilities. Those dynamic capabilities are
assumed to be important success factors at the BoP because they adapt a company’s resource base
to the requirements of its dynamic external environment.
4.5.1 Dynamic Capability: Bottom-up Business Model Innovation
As BoP markets have fundamentally different characteristics than developed markets, it is
necessary to introduce new products and business models instead of transferring existing solutions
from developed markets (Prahalad & Lieberthal, 2003). Examples of innovative business model
adaptions that take into account BoP market peculiarities include the optimization of packaging
with small and cheaper sachets or special loan programs that decrease purchasing barriers (World
Bank Group, 2007). Therefore, a bottom-up innovation process that reinvents existing business
models in close cooperation with the BoP is a critical success factor. London and Hart (2004)
introduced the innovative dynamic capability of coinventing custom solutions, meaning that local
partners are included in the product development process in order to adjust products and services
to local demand. This co-creation may for instance be achieved if R&D teams are sent to the BoP
in order to develop products based on observations of the consumption and modification behavior
of the end consumer (Hart, 2005). Hart and Christensen (2002) underline the importance of
17
disruptive innovations that may even result in a transfer to first world markets. It is further
emphasized by Prahalad (2004) that a critical bottom-up questioning of existing solutions may
contribute to a shift in the dominant and blinding logic of companies and industries. According to
Ambrosini, Bowman and Collier (2009) this dynamic capability would be a renewing dynamic
capability (second level), as offerings are created or changed bottom-up and the existing resource
platform is modified in order to successfully respond to a dynamic market environment.
While a bottom-up innovation process might require disruptive elements in the first place, Sharma
and Vredenburg (1998) introduce continuous innovation as a dynamic capability which adapts
existing solutions to environmental changes. Continuous innovation may be considered to be an
incremental dynamic capability (first level) that adapts existing products in order to gain temporary
first mover advantages.
In summary, this category of dynamic capabilities aims at innovation at the BoP and consists of
both incremental (first level) and disruptive (second level) innovation practices that include the
community and the consumer as trusted partners.
4.5.2 Dynamic Capability: Partnering and Stakeholder Integration
As discussed in chapter 3, MNCs face the challenge of legitimate and ethical growth. In order to
tackle this challenge, it is important to become indigenous instead of remaining alien (Hart, 2005).
Although partnering and stakeholder integration has the potential to generate bottom-up
innovation, this dynamic capability rather focuses on legitimacy and local trust building. The
inclusion of fringe stakeholders and the development of solutions that preserve the culture of the
community and protect its local nature is termed native capability by Hart and London (2005) and
understands embeddedness as a source of legitimacy and competitive advantage. Hart and Sharma
(2004) highlight that most managers only consider stakeholders that have a direct business impact
and introduce the concept of radical transactiveness as a way “to systematically identify, explore,
and integrate the views of stakeholders on the "fringe" – the poor, weak, isolated, non-legitimate,
and even non-human” (p. 7). Also Branco and Rodrigues (2006) state that effectively managing
and preserving relationships with core and fringe stakeholders is of crucial strategic importance. It
is further claimed that collaboration with non-traditional partners such as NGO´s results in a better
understanding of the local business environment (London & Hart, 2004; Webb, Kistruck, Ireland
& Ketchen, Jr., 2010). Seelos and Mair (2006) particularly emphasize the importance of integrating
the views of social entrepreneurs as the local representation of demand.
18
Contradicting the dominant mind set of protecting company boundaries, the concept of building
local capacity describes the integration of existing local structures into the business model (London
& Hart, 2004). An example are localized production facilities and supply chains that allow the
community to actively participate in the value creation process. The World Bank Group (2007)
terms this approach localizing value creation and suggests to cooperate with the community as a
customer and producer, for example by creating local ecosystems consisting of locally embedded
agents. Also the construct of business model intimacy describes a situation of connected and shared
identities that co-evolved between the company and the BoP community (Simanis & Hart, 2009).
Understanding poverty not only in terms of income thresholds but the underdevelopment of
capabilities, Munir, Gregg and Ansari (2012) consider it an obligation of MNCs to develop the
capabilities of the local community in order to increase its autonomy for instance by establishing
local training facilities for entrepreneurs. Because most MNCs rely on local labor markets, this is
in line with Tashman and Marano (2010) who state that developing local capabilities improves the
companies own resource base because of an increased business partner competence.
To summarize, this presumably second level dynamic capability emphasizes the ability to identify
and deal with fringe stakeholders, to integrate the community into a localized business model and
to develop its resources.
4.5.3 Dynamic Capability: Regenerative Managerial Entrepreneurship
The following subchapter deals with a higher order (Winter, 2003) or regenerative dynamic
capability (third level) that influences first and second level dynamic capabilities and therefore
changes the way in which a company adapts its resources (Ambrosini, Bowman & Collier, 2009).
According to Sharma and Vredenburg (1998) organizational learning has to do with how well a
company understands environmental changes and is willing to adapt its routines and processes.
Furthermore, higher-order learning requires the ability and willingness to interpret environmental
information in a different manner and explore new ways to deal with environmental change. Teece
(2007) claims that dynamic capabilities in general are rooted in a company´s management as the
function that contains entrepreneurial elements such as “understanding opportunities, getting things
started, and finding new and better ways of putting things together” (p. 186). Further, management
may be understood as an entrepreneurial function that is supported by culture and processes and
produces corporate strategic decisions by sensing the necessity to change in a certain way (Augier
and Teece, 2009; Adner & Helfat, 2003). Aragón-Correa and Sharma (2003) propose that
19
understanding the complex and ambiguous business environment and to develop dynamic
capabilities is a result of the management´s subjective interpretation. This is in line with
Rosenbloom (2000) who states that it is a central leadership task and capability to break with old
habits and to develop new approaches to old problems. Augier and Teece (2009) further develop
this construct and emphasize that it is a management task to exploit short term opportunities as
well as explore long term growth. This includes the analysis of the environment and the bundling
of resources in a certain way by choosing strategies, distributing investments and designing
routines. Consistent with this line of argumentation Aragón-Correa and Sharma (2003) claim that
how management evaluates environmental uncertainty influences the way in which resources are
exploited and dynamic capabilities are developed.
In summary, regenerative managerial entrepreneurship is a third level dynamic capability that
directly influences all lower level dynamic capabilities and is rooted in a company´s management,
supported by company culture and processes.
5. Research Gap and Model
The BoP was identified as an opportunity for MNCs to tackle their legitimacy and growth
challenges. However, rural BoP markets were described as dynamic and informal environments
that fundamentally differ from developed markets concerning structural factors such as their
geographical dispersion that seems to favor small to medium sized companies, as well as cultural
factors such as a lack of property rights. In order to enable an examination of sustained competitive
advantage at the BoP based on the NRBV, the dynamic capabilities perspective was integrated.
Based on this integration the NRBV was extended towards an explanation of competitive
advantage in dynamic BoP environments by categorizing three dynamic BoP capabilities that
synchronize a company´s resources with its external environment. Although the NRBV was
theoretically extended towards dynamic capabilities, which may be critical factors of success in
informal and rural BoP economies as suggested by Hart & Dowell (2011), it remains unclear how
the resulting competitive advantage can be protected and therefore be sustained. This is a field
worth investigating because it seems reasonable to assume that the way in which barriers to
imitation are created by isolating mechanisms follows a different rationale in BoP environments.
First, this is because property rights as an important legal isolating mechanism seem to be less
effective at the BoP as social ties and trust-based contracts were identified to be the predominant
20
regulators that are imposed by local networks (Hart & London, 2005; Munir, Gregg & Ansari,
2012; Reficco & Márquez, 2012).
Second, a lack of infrastructure and a high degree of geographical dispersion at the BoP appear to
favor small to medium sized MNCs with a comparably simple product and business model
(Karnani, 2007; Karamchandani, Kubzansky & Frandano, 2009). However, so far most scientific
RBV and NRBV contributions have been focused on large MNCs and may therefore not be fully
transferrable to small and medium sized MNCs in this specific BoP context (Aragón-Correa,
Hurtado-Torres, Sharma & García-Morales, 2008; Barney, Wright & Ketchen, 2001; Runyan,
Huddleston & Swinney, 2007). Aragón-Correa, Hurtado-Torres, Sharma and García-Morales
(2008) state that the structural characteristics of small to medium sized MNCs differ from larger
MNCs as they are less complex, have stronger personal ties and shorter communication paths.
Therefore, it may be assumed that traditional isolating mechanisms, which apply to large MNCs in
developed markets, are weaker or even not applicable at all to explain competitive advantage of
small to medium sized MNCs in informal and rural BoP environments. For instance, there are
grounds to assume that complexity and resource interconnectedness as traditional and resource-
based isolating mechanisms may create lower barriers to imitation for small to medium sized than
large MNCs due to smaller and less complex resource bases. This is an important research gap, as
so far only little research has been conducted on small to medium sized MNCs in both RBV and
NRBV literature and no one has yet specifically examined isolating mechanisms of small to
medium sized MNCs in rural and community-driven BoP markets. Also practical relevance is high,
because in an accelerating global environment, it is of utmost strategic importance for different
sized MNCs to fully understand how dynamic capabilities can be protected from imitation based
on existing or even new isolating mechanisms.
The following contrasting case study intends to close this research gap and explores how different
sized MNCs avoid imitation under circumstances that structurally and culturally differ from those
of developed market environments (see figure 2). The focus clearly lies on developing and not
testing theory as it is explored how barriers to imitation are created and influenced by several
structural and contextual factors in an under researched environment.
21
Figure 2: Research Model
The chosen inductive and explorative approach allows for an in-depth examination of underlying
reasons and may contribute to an understanding of why certain known and mostly resource-based
isolating mechanisms are more suitable than others in this specific context.
6. Methodology
In the following chapter the research design is introduced and the advantages and disadvantages of
the chosen exploratory contrasting case study approach are discussed. Additionally, a detailed
description of the sampling strategy and the method of data collection is given.
6.1 Case Study Approach
Conducting the literature review made clear that there is no research analyzing how barriers to
imitation for dynamic BoP capabilities are created by isolating mechanisms in informal BoP
economies, particularly for small to medium sized MNCs. Therefore, little is known about the
variables and their direction of influence. While quantitative and qualitative research has been
conducted in the fields of product stewardship and pollution prevention, the BoP phenomenon has
received much less attention and still appears to be in its early stages of development. This is
consistent with Hart and Dowell (2011) who encourage to evaluate the degree to which “BoP
strategies can draw on and augment existing theories and the degree to which entirely new theories
might be needed to understand these domains” (p. 1475). Hart (1995) himself claims that “research
on sustainable-development strategies [that the BoP field of research is a part of] must thus
necessarily take a developmental, case-comparative approach” (p.1008) because the field of
22
research requires theory development and the identification of underlying reasons before testing is
possible. Following the definition of Yin (2013), a case study as “an empirical analytical inquiry
that investigates a contemporary phenomenon within its real-life context, especially when the
boundaries between phenomenon and context are not clearly evident” (p. 18) seems to be a suitable
approach. A case study is a reasonable way to deal with a management dilemma and research
question that is very broad and insufficiently studied because it takes into consideration the
environment that the problem is embedded in from various perspectives and allows for the
retrospective inclusion and adjustment of variables (Blumberg, Cooper, & Schindler, 2011).
Following the recommendation of Hart (1995), a contrasting case study approach is chosen because
studying the phenomenon in contrasting settings may allow to derive assumptions about other
influential context variables (Blumberg, Cooper, & Schindler, 2011). Although the results of a case
study are not generalizable, it is the objective of this thesis to inductively and qualitatively analyze
data from various angles, build theory and derive propositions that are empirically testable by
quantitative studies (Eisenhardt, 1989).
6.2. Sampling Strategy
Although most of the information is obtained by interviewing managers, the unit of analysis is
MNCs operating at the rural BoP based on a socially embedded and mutually value creating
business model. Because those BoP specific MNCs are rare and hard to find, this case applies a
non-probability sampling strategy. Although this design entails sampling bias and decreases
representativeness for the whole population, the disadvantages of a non-probability sample are of
minor importance. This is because the applied case study design is unable and does not intend to
generalize findings and consequently does not require a perfect representation of the population.
This is in line with Blumberg, Cooper and Schindler (2011), who emphasize that a non-probability
and more precisely, a judgment sample reasonably complements an exploratory study. However,
in order to keep reliability as high as possible and to permit a meaningful interpretation of the
results, a contrasting purposive judgment sample is used instead of a convenience sample
(Marshall, 1996). A judgment sample consists of population elements that were chosen according
to some predefined factors that are considered to be theoretically important dimensions.
Concerning the exploration of isolating mechanisms in informal BoP environments those
differentiating factors were anticipated to be age and company size as proxies for internal
complexity of processes and routines as well as the complexity of the product and business model.
23
In the context of the ongoing scientific discussions about the optimal size of MNCs operating at
the rural BoP it seems further reasonable to compare the isolating mechanisms of a small and young
with that of a large and established MNC.
6.3. Data Collection Method
Based on a classification of Blumberg, Cooper and Schindler (2011) this study may be categorized
as a contrasting interrogation or communication case study because next to secondary data
analysis, information is obtained from conversations and observations. The data collection process
follows an explorative rationale and is based on a structured but cyclic, flexible and iterative
approach. Therefore, it continuously narrows down the research problem, resulting in a continuous
adaption of existing and the emergence of new questions due to an increasingly deeper
understanding and novel practical implications (Tukey, 1980).
A thorough desk research of secondary data preceded the case selection and interview process in
order to identify companies that may contribute to answering the research question according to
the predefined factors of the judgment sampling strategy. After the selected cases were confirmed
for investigation by the companies of interest, a more detailed screening of available documents
was conducted on the internet and the companies were asked to provide internal documents about
their history, business models, target groups etc.
Primary data was conducted based on qualitative semi-structured face-to-face and telephone
interviews. Further, the interviewee’s emotional and non-verbal reactions and the company
environment such as the office situation and interaction with colleagues were observed. In order to
increase comparability of the results the interviews were conducted and analyzed based on a semi-
structured interview guide (see appendix 2) and the methodology of qualitative data analysis by
Gläser and Laudel (2010). Content-wise the interview guide is structured along the main points of
interest that consist of the categories company information, history and business model, market
environment, competitive position and barriers to imitation. This structure of the interview guide
was derived from the research- and subquestions. It was particularly avoided to use evaluative and
suggestive questions in order to circumvent response errors such as participant-initiated and
interviewer error (Blumberg, Cooper & Schindler, 2011). Taking into account the explorative
nature of the research design, the interviews were held in an open and flexible manner, allowing
the interviewer to guide the conversation towards new and unexpected findings (Weiss, 1994). To
ensure a precise and objective content analysis all interviews were recorded.
24
After all, the data collection process is based on triangulation and information about the
phenomenon of interest comes from different sources. For example, important information
obtained from secondary data is again made a subject of discussion during the interviews to either
confirm it or gain deeper insights. Additionally, observations of the company´s facilities and
working conditions were included in the data analysis as field notes were taken throughout the
entire duration of the interview and company visit.
6.4. Selected Cases
This chapter contains a description of the sampled companies. Further, it is argued why they are
consistent with the sampling criteria described in the previous chapter.
6.4.1 Case 1: Leef Blattwerk GmbH
Leef Blattwerk GmbH is a young company based in Berlin with the vision to replace the common
single-use plastic plates with their biodegradable plates that are made of palm tree leafs (Leef.is,
2015). The company´s portfolio consists of different product bundles such as cups, plates of
different sizes and cutlery made of wood (Vietta, 2015). Furthermore, the products are
differentiated in terms of the two quality levels standard and premium as well as packaging sizes
in order to successfully address target groups with different disposable incomes in both Indian and
European markets (Vietta, 2015). The company was founded in 2012 by Claudio Vietta in Hong
Kong and production was set up in a rural South Indian region one year later in 2013 (Vietta, 2015).
After a successful crowd funding campaign the company moved to Berlin in 2013 and since then
looks back at a successful growth period (Vietta, 2015). Currently it employs 55 people in India
and Germany and exclusively produces in small Indian villages under fair conditions of production
and contributes to local growth, an improved infrastructure and the reduction of poverty (Vietta,
2015). The company pays premium wages that are above the market average and its value chain is
a hundred percent sustainable, meaning that all resources are either used or recycled (Leef.is, 2015).
Next to its profit oriented business model Leef also follows a philanthropic approach and invests
parts of its profits in Leef Love e.V., an in-house non-profit organization that supports the
protection of the rain forest and the education of the children of the company´s local blue-collar
workers (Vietta, 2015).
25
6.4.2 Case 2: Millicom
Millicom is a leading media and telecommunications company headquartered in Luxembourg with
a focus on emerging African and Latin American high growth markets and has offices in
Stockholm, London and Miami (Millicom.com, 2015). It was founded in 1990 when a Swedish
investor and an American telecommunications company combined their mobile phone businesses
and now offers a portfolio that consists of mobile, TV and broadband, online, e-commerce and
mobile financial services (Millicom, 2014a). After difficult times in the early 2000s, Millicom
recovered, changed its strategic focus and launched its brand Tigo in 2005 under which it now
operates most of its services in developing countries (Josten, 2015). Today the company is world
leader in mobile financial services and offers its digital portfolio to more than 56 million mobile
customers in 40 markets with 23,297 employees generating revenues of $6.39 billion in 2014,
mostly in the mobile segment (Millicom, 2014a). Millicom is a highly innovative corporation with
the vision “to make affordable, useful and fun services available to everybody“, and although its
prevalent motive is profit orientation, the company is “proud to be a responsible corporate citizen
[…] who contributes to the country’s economic growth” (Millicom, 2014b). Moreover, Millicom
articulated a detailed corporate social responsibility agenda and cooperates with several NGO´s to
contribute to the socio-economic development of the countries it operates in via various social
projects (Millicom, 2014b).
6.4.3 Applied Selection Criteria
As discussed in the methodology chapter the different cases were selected to be part of the
contrasting sample for several reasons. In line with the predefined purposive judgment sampling
criteria, both companies are suitable units of analysis as they employ business models that are
profit-driven but address the rural BoP as consumers and producers with the intention to create
mutual value. Millicom operates in urban Latin American markets as well as rural African
countries. In line with the research question and in order to increase comparability with Leef, the
focus lies on Millicom´s operations in rural Africa. Moreover, as described by Aragón-Correa,
Hurtado-Torres, Sharma and García-Morales (2008) Leef appears to have the structural
characteristics of a small to medium sized MNC such as lower complexity, short communication
paths and highly personalized relationships. Also in terms of age, size, product and business model
complexity it seems to represent a majority of small to medium sized MNCs operating in rural BoP
markets (Karnani, 2007; Karamchandani, Kubzansky & Frandano, 2009). Millicom has been
26
selected to represent larger MNCs that are the most important drivers of growth according to Hart
(2005) and Prahalad and Hammond (2002). Thus, a contrasting comparison may result in
interesting insights about differences in how barriers to imitation are raised by isolating
mechanisms in rural BoP environments that are related to age size, product and business model
complexity.
7. Data Analysis and Results
This chapter assesses the suitability of the sampled companies in terms of their business models,
the market environments they operate in, the necessity to open up their resource bases and the
extent to which they can rely on property-rights-based constructs. Moreover, the way each
company implemented the three identified dynamic capabilities is described. In a next step it is
explored how those dynamic capabilities are defended by isolating mechanisms that raise barriers
to imitation.
7.1 Assessment of Companies and Market Environment
Both companies address rural BoP markets and target groups. While Leef is located in a South-
Indian region where it sells and produces a rather simple and low technology product (Vietta,
2015), Millicom operates in emerging markets in Latin America and Africa, offering a highly
complex portfolio of products and services (Millicom, 2014a). Although many telecommunications
companies focus on urban areas with high population densities, Millicom also provides network
coverage in rural areas (Josten, 2015). For instance, its network in Chad currently covers 87% of
the country (Millicom, 2014a). Both companies have a profit oriented focus but apply mutual value
creating next generation BoP strategies that actively integrate core and fringe BoP stakeholders.
Among other things, this means that their business models and products are tailored to the needs
and possibilities of a target group with a low disposable income. While Leef increases affordability
by selling different quality standards and packaging sizes, Millicom for instance sells basic-level
smartphones and allows customers to be charged per second instead of per minute (Vietta, 2015;
Millicom, 2014a). The markets that both companies operate in are described as demanding, highly
dynamic and change driven with a very complicated socio-economic, political and geographically
dispersed environment (Josten, 2015; Vietta, 2015; Millicom, 2014a). Vietta (2015) emphasizes
that in those markets competitive advantage is either rooted in the ability to protect product- and
company specific knowledge or in innovation strategies that enable a company to outperform the
27
market and to be ahead of the competition that attempts to copy. Josten (2015) also underlines that
competitive advantage at the BoP is mostly temporary and that it is therefore important to always
adapt and keep moving. Joint Ventures are an important way of cooperation for Millicom because
they help to integrate market specific knowledge of local partners and minimize the risks of
entering new markets (Josten, 2015). Leef also relies on cooperation with its producers and
suppliers that are characterized as intimate and close (Vietta, 2015). In both cases formal property
rights constructs are applied but evaluated as less effective than in first world markets for two
reasons. First, governmental institutions such as ministries and courts of justice are described as
much less reliable and more corrupt, increasing the difficulty to impose the validity of contracts or
patents (Vietta, 2015). Second, contractors and even consumers may feel less obliged to obey
formalized laws, resulting in product piracy (Millicom, 2014a) or the proactive disregard of
contractual agreements, for instance concerning the prevention of child labor in the supply chains
of local partners (Vietta, 2015).
7.2 Exploration of Dynamic Capabilities
The theoretically anticipated dynamic capabilities that are assumed to be important factors of
success were found in both companies but were implemented differently.
7.2.1 Dynamic Capability: Bottom-up Business Model Innovation
The dynamic innovation capability of Leef may be characterized as rather unorganized and
incremental (Vietta, 2015). Although the CEO is in charge of final decisions, frequent round-table
discussions are held with producers, local consumers and employees to openly discuss product
adaptions (Vietta, 201 5). Next to this rather continuous innovation approach, Leef further uses a
not-for-profit business unit that targets music festival business customers as a laboratory to
disruptively innovate and test new products and ideas (Vietta, 2015).
Millicom uses several structured and efficient innovation processes that have both bottom-up and
top-down elements (Josten, 2015). Those innovation routines are organized along the company´s
national business units in order to ensure the de-central generation of local target group specific
solutions (Josten, 2015). Different communication channels such as customer teams, social media
tools, and customer experience surveys are used to continuously integrate customer and partner
perspectives (Millicom, 2014b). Further, Millicom disruptively integrates the perspectives of local
entrepreneurs by seed funding new business ideas via the in-house incubator Think (Millicom,
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2014a; Think.rw, 2015). Moreover, the Digital Changemaker Award Program is a project that
rewards novel ideas and aims at identifying disruptive innovations (Millicom, 2014a; Tigo.co.rw,
2015).
Summarizing, Leef applies top-down and bottom-up innovation routines that are hands on,
situation-based, unorganized and mostly driven by its founder. While the product is continuously
adapted based on the feedback of consumers, producers and employees, Leef uses its not-for-profit
unit as a laboratory to disruptively innovate and test new ideas. Millicom does not have a central
innovation policy or process and the country units are responsible to synchronize their offerings
with the dynamic market demands. Those decentral innovation processes are very developed and
consist of top-down and bottom-up channels such as incubators and competitions to disruptively
generate ideas.
7.2.2 Dynamic Capability: Partnering and Stakeholder Integration
Leef attempts to identify and protect fringe stakeholders such as nature or the native populations
of the communities it operates in (Vietta, 2015). However, this happens in an unstructured way.
Leef uses its in-house NGO Leef Love to cooperate with non-traditional partners (Leef.is, 2015).
Further, Leef is socially embedded and has a good reputation in the community in which it
maintains two local partnerships and is being perceived as a fair employer that provides safe
working conditions and pays wages that are above market average (Vietta, 2015). According to
Vietta (2015) this local embeddedness is much more sustainable than contract-based relationships.
Further it is assumed that the very close and trust-based cooperation with the local suppliers and
the commitment of the employees that result in mutual support is mainly due to the fact that the
community and the employees believe in the sustainable motive and benevolence of the company
(Vietta, 2015). This high degree of trust already resulted in the rejection of more profitable
opportunities that were offered to the local BoP partner (Vietta, 2015). Finally, Leef actively
develops the capabilities of its local partners in terms of working safety, quality standards and the
protection of nature (Vietta, 2015).
Millicom installed a corporate responsibility committee that directly reports to the executive team
and among other things has the objective to identify and map stakeholders and their interests in
cooperation with the country units (Millicom, 2014b). The global CSR strategy that Millicom
understands as a way to integrate fringe stakeholders is based on this stakeholder identification
process (Millicom, 2014b). Next to this very sophisticated way of stakeholder identification, the
29
company also maintains partnerships with non-traditional partners such as UNICEF, IWF,
INHOPE and Interpol in an attempt to integrate fringe perspectives and to fight phenomena such
as child abuse and labor (Millicom, 2014b). The company has a sustainable supply chain, values
social embeddedness and always had a solid presence in and very intimate relationships with the
local community (Josten, 2015). The fact that 99% of the employees belong to the local population
and that the workforce consists of more than 56 nationalities underline its local embeddedness
(Millicom, 2014a). According to Josten (2015) Millicom is convinced that its engagement as a
corporate citizen strengthens the local brand and contributes to the stability of the socio-economic
landscape the company operates in. In order to preserve these relationships, suppliers and
customers are visited on a regular basis (Millicom, 2014b). However, it is admitted that high staff
turnover rates may result in a comparably low degree of personalization of relationships towards
local partners (Josten, 2015). Millicom also invests in community skill development and training
facilities such as EduMe, a vocational academy that transfers important business skills to local
entrepreneurs (Edume.com, 2015; Millicom, 2014a). Another example is the Tigo Sales School, an
eight week skill development program that is based on interactive mobile learning tools and class
lectures that address internal sales staff as well as external freelancers and indirect employees
(Josten, 2015; Millicom, 2014b).
In summary, Leef’s partnering and stakeholder management routines are simple and not
institutionalized. However, the CEO attempts to identify fringe stakeholders in an unstructured
way, integrates their interests in the business model and addresses those target groups via CSR
activities. Furthermore, Leef is highly embedded in its social environment and has very intimate,
close and trust-based relationships with producers and suppliers that it intends to develop and grow
with. Millicom has an institutionalized corporate responsibility committee and systematically maps
stakeholder interests. Cooperation with non-traditional partners such as UNICEF and the IWF is
highly developed. Furthermore, social embeddedness is high with a large percentage of staff being
locally employed. The company has developed close and long lasting relationships with
stakeholders and partners over time. However, in direct comparison to Leef, those relationships are
more transaction- than relationship-based. This is partly due to high fluctuations among key
account functions and the company´s size, which is often perceived as intimidating. Millicom also
systematically trains and develops employees and partners regarding their sales and leadership
skills.
30
7.2.3 Dynamic Capability: Regenerative Managerial Entrepreneurship
Leef is a young, dynamic and fast-growing start-up company with flat hierarchies, a flexible and
open-minded working environment and a low degree of process institutionalization (observation,
September 18, 2015; Vietta, 2015). This unconventional working environment and the low
institutionalization of routines enable the management team and the employees to freely interpret
the company´s environment and adapt structures and routines in a creative and flexible manner
(Vietta, 2015). Next to a flexible adaption of dynamic capabilities, the start-up culture and low
degree of formalization further result in high degrees of self-responsibility, commitment and
intrinsic motivation of employees and partners (observation, September 18, 2015; Vietta, 2015).
According to Vietta (2015) this entrepreneurial spirit helps the company to flexibly adapt to its
dynamic market environment and to maintain the reputation of a socially embedded and sustainable
organization that is perceived as more trust-worthy than large MNCs that run the risk of being
perceived as anonymous, process dominated and shareholder value oriented.
Because of its size-related more bureaucratic and complex structures and decision making
processes, the top management of Millicom defined structures that incentivize a managerial
entrepreneurship culture and foster a creative and open-minded interpretation of the dynamic
company environment and an efficient adaption of internal structures and resources (Josten, 2015).
Therefore, Millicom actively attempts to reduce structural complexity and to develop
entrepreneurial leadership capabilities based on trainings and development programs such as the
Millicom University (Millicom, 2014a). Further, there are guiding leadership principles and target
agreements as internal organizational institutionalizations of entrepreneurship as well as reporting
structures and management tools as external organizational institutionalizations of
entrepreneurship that align internal resources with the external environment (Millicom, 2014a).
To summarize, Leef has flat hierarchies, a rather democratic way of decision making and a young
and entrepreneurial start-up culture. Moreover, the founders are flexible in their decisions and
hardly any institutionalized reporting structures or management tools exist. On the opposite,
Millicom has many levels of hierarchy and artificially attempts to embed entrepreneurship into the
organization on a behavioral and structural level.
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7.3 Exploration of Isolating Mechanisms
It is the aim of the following analysis to explore how and which isolating mechanisms create
barriers to imitation to protect the identified dynamic capabilities of each company. Thus, it does
not intend to evaluate the dynamic capabilities’ effectiveness or their outcomes.
7.3.1 Isolating Mechanism: Unique Historical Conditions and Path Dependency
Based on the conducted analysis, age appears to influence this isolating mechanism as older
companies with a more specific and path dependent development may possess dynamic capabilities
that are rather unique and more embedded in a differentiated resource base. For instance Millicom
has complex processes that uniquely developed and co-specialized over time with the company´s
remaining resources and processes. An example of a historical event that contributed to the
uniqueness of a dynamic capability is its strategic shift away from saturated markets towards
developing countries that was due to a barely avoided bankruptcy in the early 2000s (Millicom,
2014a). According to Josten (2015) this experience of failure influenced the development of
today’s more experimental and open minded approach towards innovation. Also Millicom´s
partnering and stakeholder integration routines developed over a long time and became
increasingly embedded and unique. Examples of its differentiated stakeholder routines are its
corporate responsibility committee that translates stakeholder interests into activities and its unique
reputation among NGO´s and governmental institutions (Josten, 2015). Further, Millicom´s
entrepreneurial management routines are difficult to imitate as they are influenced by complex
organizational management processes, many levels of hierarchy and reporting structures that
developed and grew path dependently (Josten, 2015). Leef on the contrary has a relatively short
history resulting in processes that are mostly simple and neither institutionalized nor unique
(observation, September 18, 2015; Vietta, 2015). Further, most routines are not very co-specialized
and integrated in its remaining resource base (Vietta, 2015).
Proposition 1: Unique historical conditions and path dependency may raise a higher barrier to
imitation for older and larger MNCs operating at the rural BoP due to dynamic capabilities that
are more unique and embedded in the remaining resource base
7.3.2 Isolating Mechanism: Social Complexity
The results of the conducted interviews show that company age and size seem to lower the social
complexity of dynamic capabilities because they influence the intimacy of the relationships
32
towards stakeholders and partners. For instance Leef only needs a relatively small number of
individuals to innovate a fairly simple product but the degree of social complexity inherent in its
bottom-up innovation activities with partners and stakeholders is considered to be high (Vietta,
2015). This is because Leef is socially embedded in the community, has an excellent reputation
among stakeholders and maintains relationships with its partners and stakeholders that are
described as intimate and based on trust and interpersonal empathy (Vietta, 2015). Finally, Leef´s
regenerative managerial entrepreneurship capability which is influenced by its young and dynamic
entrepreneurial culture, flexible decision making structures and the commitment of its employees
is a highly relationship-based and socially complex phenomenon (observation, September 18,
2015; Vietta, 2015). Millicom on the contrary has higher fluctuation rates that result in a lower
duration, consistency and social complexity of interpersonal relationships that are characterized as
more transactional than relationship-based (Josten, 2015). Also the size-related extent to which the
company is perceived as shareholder driven, which is perceived as intimidating by some local
partners, influences the degree of trust and intimacy as determinants of social complexity (Josten,
2015). Moreover, it is assumed that Millicom´s approach to entrepreneurship is of reduced social
complexity because it is highly institutionalized and based on the regulation of behavior via
structures, rules and policies (Josten, 2015).
Proposition 2: Social complexity may raise a higher barrier to imitation for younger and smaller
MNCs operating at the rural BoP due to higher consistency of interpersonal relationships and
higher perceived trustworthiness
7.3.3 Isolating Mechanism: Resource Interconnectedness
The case comparison gives reason to assume that company age, size, product and business model
complexity contribute to resource interconnectedness because the number of internal and external
intersection points with other resources, capabilities and systems is increased. For instance,
Millicom´s decentral innovation processes are highly interconnected with other resources due to
its relatively complex products that make it necessary to integrate knowledge from all parts of the
organization (Josten, 2015). Millicom´s partnering and stakeholder integration processes are also
highly interconnected because the integration of fringe stakeholder interests is a cross-divisional
activity that requires the exchange of information with other functions such as marketing, product
development and production (Josten, 2015). Further, Millicom bases its entrepreneurial activities
33
on cross-divisional reporting and management systems that require a high degree of resource
interconnectedness (Josten, 2015). While Millicom has many partners on a global scale, a large
production and sales volume as well as complex and interconnected IT and resource planning
systems, resource interconnectedness is low for Leef because of its small size and because it only
has two local partners (Josten, 2015; Vietta, 2015). Leef´s pragmatic approach to leadership and
its comparably small size also reduce the necessity to apply interconnected regenerative managerial
entrepreneurship routines and reporting structures (Vietta, 2015).
Proposition 3: Resource interconnectedness may raise a higher barrier to imitation for older and
larger MNCs operating at the rural BoP that offer a complex product due to a higher number of
internal and external intersection points
7.3.4 Isolating Mechanism: Causal Ambiguity (Tacitness, Complexity, Specificity)
Comparing the results of the case analysis, tacitness may be relatively high within small and young
companies that sell a simple product because size, age, product and business model complexity
appear to result in an increased necessity to plan and codify processes and routines. Leef for
instance does not yet codify, map or design processes and the way the company practices
innovation changes on a daily basis (Vietta, 2015). Further, it maintains personal relationships with
its stakeholders that are not based on a defined process and its approach to managerial
entrepreneurship is hands-on, experience-based and pragmatic (Vietta, 2015). On the contrary,
Millicom has advanced process management capabilities that it applies to systematically design
and improve most company activities and although being decentral, Millicom´s innovation
processes are clearly defined and codified (Josten, 2015). Millicom´s central corporate
responsibility committee that deals with stakeholder management from a headquarters perspective
is a good example of the systematic way in which stakeholder management routines are described
(Josten, 2015). Finally, Millicom codifies entrepreneurship via guiding leadership principles,
decision processes and management tools that describe and influence entrepreneurship practices
(Josten, 2015).
Proposition 4: Tacitness may raise a higher barrier to imitation for younger and smaller MNCs
operating at the rural BoP that offer a simple product due to a reduced necessity to codify
34
At this point it is important to underline that complexity as a source of causal ambiguity may be of
an organizational nature and should not be confused with social complexity as the already
introduced isolating mechanism that is fully relationship-based. In direct comparison, the results
of the interviews imply that older and larger companies selling high technology products seem to
have an advantage as the degree of complexity is increased by all those factors. For instance,
Millicom has an extensive enterprise resource planning and several IT systems involved in its
innovation process (Josten, 2015). Also partnering and stakeholder integration routines are very
complex as they involve several parties and interfaces that have to be operationalized and require
points of intersection between external partners and internal corporate functions (Josten, 2015).
Moreover, complexity is an important isolating mechanism for Millicom’s managerial
entrepreneurship routines due to its diverse reporting systems and decision making structures
(Josten, 2015). Complexity as a source of causal ambiguity appears to be less important for Leef
because its innovation process solely relies on the CEO as the only central coordinating function,
who is also the only interface towards its few external partners (Vietta, 2015). Due to its size Leef´s
managerial entrepreneurship capability is assumed to be of comparably low complexity (Vietta,
2015).
Proposition 5: Complexity may raise a higher barrier to imitation for older and larger MNCs
operating at the rural BoP that offer a complex product due to lower resource transparency
The results of the case study imply that age and size as possible proxies for the duration and number
of partner relationships may further influence the specificity of dynamic capabilities and the mutual
development of resources and routines. Millicom for instance integrates the perspectives and
opinions of several target groups and stakeholders, resulting in a high number of advanced, long-
lasting and partner specific innovation and stakeholder processes (Josten, 2015). Millicom´s long
lasting stakeholder relationships also co-developed and resulted in a high degree of specificity on
an entrepreneurship and reporting level (Josten, 2015). On the contrary, specificity is assumed to
be rather low ifor Leef, because it just started to infrequently and informally integrate partners in
its innovation and stakeholder routines (Vietta, 2015).
Proposition 6: Specificity may raise a higher barrier to imitation for older and larger MNCs
operating at the rural BoP due to more and longer partner-relationships as well as a higher
degree of mutual resource synchronization
35
7.4 Additional Findings
It is an unexpected finding of the case analysis that the BoP partners of the explored companies did
not act as opportunistic as expected (Josten, 2015; Vietta, 2015). Especially in the case of Leef
Vietta (2015) admits that not much stands in the way of copying its relatively simple business
model and dynamic capabilities. Vietta (2015) even states that most of the time openness and
cooperation were rewarded with respect and assumes that this unwillingness to defect is due to
relationship-based control mechanisms and an effective alignment of interests (Vietta, 2015). As
an example he mentions that investing in relationships and being part of local networks enable a
company to punish opportunistic behavior by damaging the reputation of the defecting partner
(Vietta, 2015). If the company is socially embedded and its interests are aligned with that of its
partners and the community, the punishment of the defecting partner might even be carried out by
third parties that benefit from the MNCs presence (Vietta, 2015). Compared to the other isolating
mechanisms, this barrier to imitation is of a behavioral nature and based on a lack of willingness
rather than a resource-based lack of opportunity because BoP partners have specific subjective
reasons not to act opportunistically.
Proposition 7: The behavior of BoP partners may be based on an unwillingness rather than a
resource-based inability to act opportunistically due to informal social control mechanisms such
as reputation
8. Discussion
This chapter develops theory based on the case study findings and comments on its theoretical and
practical implications. Further, limitations and future research opportunities are discussed.
8.1 Theory Development
This thesis attempts to develop theory towards an explanation of an observed real-world
phenomenon – the inimitability of dynamic capabilities in an environment that follows different
rules than developed markets – that is insufficiently covered by existing theory.
8.1.1 Resource-Based Isolating Mechanisms at the BoP
Based on the theoretical extension of the NRBV towards an inclusion of external socio-economic
drivers of competitive advantage, the results of the conducted case study give reason to assume
that particularly large and established MNCs with complex products and business models can rely
36
on traditional and resource-based isolating mechanisms that create barriers to imitation for their
dynamic capabilities (see figure 3). In the context of the observed cases historical development and
path dependency, resource interconnectedness, complexity and specificity seem to be rather
suitable isolating mechanisms for those MNCs. On the contrary, social complexity and tacitness
were found to create higher barriers to imitation for small and young MNCs that offer a product of
lower complexity. If Karnani, (2007), Karamchandani, Kubzansky and Frandano (2009) are right
and a majority of the MNCs that operate at the BoP are small to medium sized, there are reasonable
grounds to assume that in direct comparison to the other explored isolating mechanisms, tacitness
and social complexity are rather helpful to understand sustained competitive advantage in the
community-driven, informal and rural BoP environments this case study explored.
8.1.2 Behavioral Isolating Mechanisms at the BoP – Handicap Signaling as a
Relationship-Based Explanation of Inimitability
It was further observed that most partners, particularly those of the smaller observed MNC, tended
to be unwilling to act opportunistically although they had the opportunities and abilities to do so
(Vietta, 2015). This is in line with the scientific literature that identified trust, mutual control and
local networks to be important regulators at the BoP (Hart & London, 2005; Munir, Gregg &
Ansari, 2012; Reficco & Márquez, 2012). Therefore, the phenomenon of competitive advantage in
rural BoP environments may be better understood by integrating theories from different fields that
explain an unwillingness to defect based on an effective alignment of interests rather than an
inability based on resource characteristics. Triggered by the findings of the case analysis and
encouraged by the behavioral and relationship-based control mechanisms that characterize the
BoP, this thesis develops theory and offers a possible explanation of why partners, particularly of
small to medium sized MNCs, may be unwilling to act opportunistically by transferring a principle
from evolutionary biology to management sciences.
Handicap signaling is a theory that is rooted in evolutionary biology and behavioral sciences and
hypothesizes that a male’s handicap may increase its attractiveness to females. An example would
be the overdeveloped and colorful tail of a peacock as a handicap that requires an enormous
investment of resources in something else than survival and even makes it more vulnerable to
attacks by predators. This is because females associate the existence of a handicap with the male’s
fitness to survive despite this disadvantage (Zahavi, 1975). The fact that the handicap´s state of
development is directly linked to the amount of resources that had to be invested results in the
37
female’s perception that the male with the most developed handicap is the best survivor
nevertheless (Zahavi, 1975). From the female´s point of view his ability to survive may either be
rooted in the availability of more than enough resources or an excellent ability to defend himself
despite the handicap. However, in order to be understood as an honest signal of superiority and
strength the handicap has to be perceived as costly and resource binding (Zahavi, 1975). On a more
abstract level it is claimed that the perceived strength or fitness increases together with the
necessary costs of the resource investment (Zahavi, 1977; Grafen, 1990).
The abstracted key findings of handicap signaling could also contribute to an understanding of the
observed cooperative behavior at the BoP. For instance, the willingness of the MNC to share
resources could be perceived as a very costly signal because opportunistic behavior may result in
knowledge drain, competitive disadvantages and in the worst case bankruptcy. Therefore,
successfully signaling knowledge sharing activities as a potentially costly handicap may decrease
the BoP partner’s willingness to imitate dynamic capabilities as it may be perceived as a sign of
strength. This strength may be either rooted in the MNC´s availability of sufficient resources or its
ability to defend its dynamic capabilities even in a situation of shared resources. However, in order
to be perceived as strength, the MNC is required to successfully communicate an awareness of
those risks. This is particularly plausible in rural BoP settings for two reasons that were mentioned
by Vietta (2015). First, in a smaller and more intimate context MNCs have a better opportunity to
communicate the signal that they are willing to share resources while being fully aware of potential
risks. Second, relatively small, rural structures and the importance of local networks increase the
actual and perceived ability of the MNC to defend itself by socially punishing defecting partners.
Based on the experiences of Vietta (2015), who openly admitted towards his local business partners
that the success of his company depends on their compliant behavior, it may even be assumed that
the costliness of the signal and therefore the height of this behavioral barrier to imitation is higher
for small to medium sized MNCs with fewer financial resources that cannot afford to take major
risks. Further, MNCs that are perceived as having personhood will have an easier time tapping into
social mechanisms of regulation such as reputation, and punishment of opportunistic behavior.
Routes to obtaining this may be to actually have friendly interactions, but also to manage a friendly
brand identity, which often are characteristics of rather small companies (Vietta, 2015).
38
Figure 3: Research Model (Case Study Results)
8.2 Limitations and Future Research
As described in the methodology chapter, the findings of this thesis are based on inductive case
study research that relies on a contrasting non-probability judgment sample. Therefore, the results
are not generalizable to a whole population due to a lack of representativeness and valid statements
can only be made in the context of the two analyzed companies that are both unique in their own
ways. Moreover, the results of the thesis are not applicable to all BoP markets but focus on rural
environments in Africa and India that tremendously differ from urban areas in other parts of the
world. It might therefore be difficult to transfer the findings to an urban context because a high
degree of dispersion in rural areas emphasizes the importance of social control mechanisms as
barriers to imitation. In an urban environment, greater anonymity may imply that social control
mechanisms are as ineffective as property rights-based control mechanisms.
Concerning the size of the sampled companies the case study compared the two relatively broad
categories small to medium sized MNCs and large MNCs but did not take into consideration the
effect of more differentiated size categories on isolating mechanisms such as really small or
extremely large companies.
Content-wise, this thesis focused on potential opportunistic behavior of the BoP partner and did
not take into account that MNCs with bad intentions may take advantage of a property rights related
institutional void, for instance by egoistically commercializing ideas or discoveries that were
developed with the BoP partner. MNCs may further exploit the BoP by simply benefiting from
lower wages without contributing to sustainable local growth.
39
The results of this thesis encourage to conduct further research based on varying research methods.
First of all, empirical testing of the inductively derived propositions is recommended to validate
the thesis´ findings. In order to obtain a holistic understanding of sustained competitive advantage
at the BoP it is further suggested to broaden the sampling criteria beyond company age, size,
product and business model complexity and for instance include industry effects on the height of
imitation barriers. While this paper broadly explored how barriers to imitation are raised by
isolating mechanisms at the BoP, empirical testing would further allow to precisely evaluate the
magnitude of the relationship between each isolating mechanism and the inimitability of each
dynamic capability.
As discussed, other theories and isolating mechanisms that are not necessarily rooted in economics
or management sciences may additionally contribute to an understanding of competitive advantage
at the BoP. It seems particularly promising to have a closer look at barriers to imitation that are
more rooted in isolating mechanisms that explain a relationship- or transaction-based unwillingness
to act opportunistically than an inability to imitate based on resource characteristics. Examples are
transaction cost theory that explains the prevention of opportunistic behavior based on the
alignment of interests (Williamson, 1975), institutional theory that takes into consideration the
effect of the social and structural environment on the activities of the company (Scott, 1995) or
game theory that can be applied to explain cooperative and defective behavior based on social
decision modelling (Von Neumann & Morgenstern, 1961). Finally, behavioral theories such as the
transferred handicap principle could explain opportunistic behavior from an evolutionary-
psychological perspective.
It seems further promising to apply handicap signaling to other business-related phenomena. For
instance, the relationship between CSR activities and brand value could be explained based on this
theory because responsible behavior as a corporate citizen may also serve as an honest signal. If a
firm is willing to earn lower profits for increased sustainability, a copier who can undercut prices
by decreasing sustainability may suffer a reputational loss and might even be perceived as immoral.
8.3 Practical Implications
Practical implications are derived for large and small to medium sized MNCs operating at the rural
BoP concerning the prioritization and development of isolating mechanisms. The results of the
case exploration give reasons to assume that most of the traditional and resource-based isolating
mechanisms such as resource interconnectedness, historical conditions and path dependency,
40
complexity and specificity hold for large and established MNCs with a complex product and
business model. On the contrary, small to medium sized MNCs are assumed to find themselves in
a more challenging situation because compared to larger MNCs, tacitness and social complexity
appeared to be their only pronounced and superior resource-based isolating mechanisms. While
large MNCs can rely on how traditional isolating mechanisms raise barriers to the imitation for
their dynamic capabilities, it seems reasonable for small to medium sized MNCs to build on their
specific strengths. This means for instance to keep codification low in order to maintain a high
degree of tacitness as a source of causal ambiguity. In order to increase social complexity it is
further recommended to internally maintain a high degree of personal interactions and short
communication paths. Simultaneously it is also important to externally invest in social
embeddedness and trust-based relationships towards the BoP community. A new key finding of
the case study implies a behavioral unwillingness to act opportunistically rather than a resource-
based inability to defect, particularly for small to medium sized MNCs. Handicap signaling, which
was transferred from evolutionary biology, was identified as an opportunity for small to medium
sized MNCs to raise a relationship-based barrier to imitation. In an attempt to increase perceived
strength and avoid opportunistic behavior, a conscious willingness to share resources should
therefore be communicated to local partners and the community.
9. Conclusion
Answering the research question of how MNCs of different sizes sustain competitive advantage in
rural and informal BoP economies, this thesis closes an important research gap by focusing on
community-driven BoP settings that tremendously differ from developed markets and require a
high degree of resource sharing. Because the exploration of competitive advantage in BoP
environments is a novel field of research, theory was developed based on an extensive literature
review and a contrasting case study.
First, the dynamic capabilities perspective and the NRBV were combined and extended towards an
inclusion of the socio-economic challenges of rural and informal BoP environments. More
specifically, three clusters of dynamic BoP capabilities were included into the NRBV. Regenerative
managerial entrepreneurship, bottom-up business model innovation and partnering and stakeholder
integration are assumed to be sources of competitive advantage because they develop the required
internal resources to tackle external socio-economic challenges.
41
A contrasting case study answered the first subquestion by exploring how MNCs of different sizes
create barriers to imitation that successfully prevent imitation of the previously identified critical
dynamic capabilities in informal and rural BoP economies. The results of the case study indicate
that most of the traditional isolating mechanisms are especially applicable to large and established
MNCs with complex products and business models, whereas only two traditional and resource-
based isolating mechanisms, namely social complexity and tacitness, were found to hold for
comparably young and less complex small to medium sized MNCs.
Findings further imply, that cooperative behavior of BoP partners may not only be the result of a
resource-based inability but rather a relationship- or transaction-based unwillingness to act
opportunistically, due to an effective alignment of interests or regulating social institutions.
Therefore, answering the second subquestion – whether an extended NRBV sufficiently explains
sustained competitive advantage in rural and informal BoP economies for MNCs of different sizes
– this thesis suggests a stronger focus on relationship- and transaction-based theories in order to
sufficiently explain inimitability for small to medium sized MNCs. Exemplarily, the handicap
principle as a possible behavioral isolating mechanism describing such an unwillingness to act
opportunistically was transferred from evolutionary biology.
In conclusion, MNCs that apply mutual value creating business models have the potential to tackle
important socio-economic challenges on a global scale while addressing their own growth and
legitimacy challenges. However, success for both, MNCs and the BoP, depends on the MNCs
ability to protect and sustain their competitive advantages in an environment of shared resources
that structurally and culturally differs from developed market environments. Especially for small
to medium sized companies it is of utmost strategic importance to not only consider resource-based
but also relationship and transaction-based barriers to imitation.
42
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Appendices
Appendix 1. Five-Step Research Approach
Appendix 2. Semi Structured Interview Guide
# Categories Description
1 Company and
Business Model
Assessment of basic assumptions such as the company´s context, profit
orientation, the necessity to open up its resource base, and whether it is
pursuing a second generation BoP strategy in terms of knowledge sharing,
mutual local value creation and the transfer of capabilities. Further,
information about the company´s history and path dependent development is
conducted.
2
Market
Environment
Identification of differences between first and third world markets particularly
concerning market dynamics, informality, working conditions, the
infringement of property rights constructs and the reliability of governmental
institutions.
3 Competitive
Positioning
Evaluation of global and local competitive intensity and competitive
positioning of the company. Moreover, potential sources of competitive
advantage in the company´s market segment are identified. If mentioned by the
interviewee the characteristics of innovation, stakeholder management/
partnering and entrepreneurial management routines are discussed in detail.
4 Defense
Mechanisms
This category aims at the imitability of the company´s business model,
products and dynamic capabilities in particular. Therefore, it asks the question
of why partners do or do not imitate the MNCs critical factors of success.
Special emphasize lies on the exploration of isolating mechanisms and their
impact on the identified dynamic capabilities.
48
Italic sentences in the right column remind the interviewer of the question rationale and background and
are not directly asked to the interviewee in order to avoid suggestive questioning.
1) Company and Business Model
1.1) How big and international
is the company?
Assessment of MNC characteristics
1.2) How did the company
develop historically and what
are its growth ambitions?
Insights about historical development, path dependency and other
context information
1.3) What is the product/ service
and who is the target group?
Degree of product/ service complexity
Only production in third world market or also local generation of
growth? (BoP strategy 2.0?)
Target group rural or urban?
Target group wealthy or only poor segment of population?
1.4) How important are the local
conditions of production?
Sustainability of business model
1.5) What is the company´s
motive?
Profit oriented or philanthropic?
Only suitable unit of analysis if profit is the prevalent motive
If profit oriented, how can mutual value be created?
1.6) How is the reputation of the
company in the local
community?
How indigenous/ socially embedded is company
Is company successfully integrating community in business model?
1.7) What are the points of
intersection with the local
community?
As producers, consumers or suppliers?
Is the local population embedded in the business model (BoP
strategy 2.0)?
Degree of local capacity (BoP strategy 2.0?)
1.8) How would you describe
the interactions with the local
community?
Restricted to transaction of money for labor or deeper
commitments?
How indigenous/ socially embedded is the company (BoP strategy
2.0?)
1.9) In which way does the
company improve the situation
of the local community in
general?
Does company have a business model that integrates stakeholders
and creates mutual value
Are there any philanthropic projects/ activities (if yes, what are the
objectives)?
Position of company along the triple bottom line
1.10) How do partners benefit
from the cooperation?
Is knowledge transferred to the BoP community
1.11) Are wages of the company
above or underneath market
average
Have local partners the opportunity to adequately participate in
business success?
1.12) Do cooperations require
the sharing of production
facilities?
If yes, ask about other resources
Are MNCs required to open up their resource base and share
information with the local communities?
Assessment of resource sharing intensity and risk of knowledge
drain
2) Market Environment
2.1) What are the differences
between the first world and the
Market structures and dynamics of change/ velocity?
Working conditions and income situation?
Enforcement of law and validity of contractual agreements?
49
third world market the company
operates in?
How important are property rights constructs concerning the
protection of knowledge?
Infringement of contracts
Delivery contracts, supplier agreements and employment contracts?
Infringement of non-disclosure agreements?
Infringements of copyrights, patents and trademarks?
2.2) What is the role of
governmental institutions
concerning the enforcements of
legal constructs such as patents,
copyrights etc.?
Is it possible to successfully sue opportunistic partners that violate
contractual agreements of any kind?
Are governmental institutions willing and able to impose property
rights?
3) Competitive Positioning
3.1) How intense is local and
global direct and indirect
competition?
Market context and whether it is necessary to prevent imitation and
defend competitive advantage depends on degree of competition
3.2) What is competitive
position of the company and
why is it successful?
Perceived situation in the market and general identification of
potential (sustained) competitive advantages
3.3) What are the critical
success factors in the company´s
specific market segment?
Only ask more specifically if interviewee mentions one of the
following fields
(no suggestive questions!)
3.3.1) Innovation process Are product changes/ adaptions of a radical or incremental nature?
Top-down or bottom-up?
Complexity of process: formal or informal approach?
To which extend is the local community included concerning the
design of products/ services and who is mainly responsible/ in
charge of final decision?
Who exactly participates in innovation process (local population as
consumer, producer or supplier)?
3.3.2) Stakeholder management How large are production/ sales capacities?
How many partners/ cooperations does the company have?
How relevant/ how big is impact of product/ service from a societal
perspective (necessity to integrate a wide range of stakeholders)?
Is company cooperating with NGO´s (or other non-traditional
partners)?
Who are the company´s most important stakeholders?
To which extend does the company take into consideration the
employees, suppliers and producers needs and wants?
Are there other (fringe) stakeholders besides employees, suppliers
and producers that the company addresses?
Complexity of process: formal or informal approach?
3.3.3) Managerial
Entrepreneurship Which management tools (alignment with external environment) and
reporting structures (internal organizational institutionalization of
entrepreneurship) are in place?
How many hierarchical levels?
What do decision making process and leadership style look like
(democratic or hierarchical)?
50
4) Isolating Mechanisms
4.1) How transparent is the
company´s business model for
competitors and partners?
How complex is the product and its production/ distribution/
marketing processes?
Complexity of product as one proxy for transparency
4.2) How much do partners
learn about the company´s
internal processes and routines
during the cooperation?
Perceived closeness of cooperation and willingness to share
information
Exploration of resource sharing intensity and risk of knowledge
drain 4.3) Why are partners not
copying the business model/ the
critical success factors?
Way the question is asked depends on whether opportunistic
behavior of partners is high and on which dynamic capabilities have
been identified as critical success factors
4.4) How long did it take the
mentioned success factors to
develop and has a certain period
in time or historical conditions
been of particular importance
concerning their development?
History and path dependency as barrier to imitation
See question 1.2 for information about path dependency and
historical development
4.5) Is it always clear how
exactly some of the company´s
strengths result in business
success?
Social complexity as barrier to imitation
If yes, what exactly is unclear and what are the drivers of
complexity?
Size of company (see question 1.1) and complexity of product (see
question 1.3) as proxies for social complexity because of higher
number of involved individuals and number of interpersonal
relationships
4.6) How intimate/ trust based is
relationship with the
community, consumers,
producers and suppliers?
Social complexity as barrier to imitation
Business model intimacy and social embeddedness? (BoP strategy
2.0?)
4.7) How important are trust
based relationships with the
local community?
Social complexity as barrier to imitation
If yes, ask why it is important
How indigenous/ socially embedded is the company and business
model intimacy
4.8) Are some of the mentioned
success factors inextricably
embedded in or connected to
other processes inside and
outside the company?
Resource interconnectedness as barrier to imitation
Give some examples if necessary (e.g. relationship between sales
capabilities and distribution network)
If yes, ask about the complementing resources/ competences that the
dynamic capability is embedded in
4.9) Do you believe that a
competitor could have
difficulties understanding why
you are successful?
Causal ambiguity as barrier to imitation (general question)
4.10) Would you characterize
your everyday working routines
as formalized or unstructured?
Tacitness as barrier to imitation
To which extend are internal processes codified (learning by
doing)?
4.11) Would you generally
describe your IT-systems,
processes and structures as
complex or intuitive?
Complexity as barrier to imitation
Size of company (see question 1.1) and complexity of product (see
question 1.3) as proxies for complexity because of higher number of
involved individuals, resources and systems
51
4.11) Would the loss of
qualified personnel result in
severe knowledge drain that
endangers the competitive
advantage of the company?
Complexity as barrier to imitation
If complexity is high the individual itself does not know the sources
of competitive advantage and there is a reduced risk of knowledge
drain that is due to headhunting activities by competitors
4.12) Did you historically
develop with one or more of
your partners?
Specificity as barrier to imitation
History of company (see question 1.2)
4.13) Would losing one of your
central partners result in high
transaction and switching costs
on one or both sides?
Specificity as barrier to imitation
High interconnection of resources increases causal ambiguity
Appendix 3. Transcript Leef Blattwerk GmbH
Surname, last name Claudio, Vietta
Company Leef Blattwerk GmbH
Business address Kienitzer Strasse 98, 2HH, 12049 Berlin
Phone +49 (0)30 21 80 80 70
Age 38
Origin Italian
Position CEO and Founder
Date of the interview 18.09.2014
Duration 01:03:04
Present persons Claudio Vietta; Paul Geuting
Description
Interviewee
Claudio Vietta graduated from the Free University of Bozen with a bachelor
of Design and Art. He then worked for several advertising agencies both
nationally and internationally and finally became senior art director and
partner of Project Mandrill, an agency operating in China. Today Claudio
Vietta is the CEO of Leef and directs the business from Berlin.
Observations
Offices are located in Neukölln, a reasonably priced but increasingly
modern and young living area.
On the inside the office looks more like a stylish living room, slightly
comparable to the laid back interior of an advertising agency. The office is
centered around a comfortable kitchen with free drinks and cake, two
employees drink coffee and discuss a shipping problem. Cardboards filled
with Leef plates, packaging and flyers are standing everywhere.
Everyone is dressed casually and the atmosphere is noisy and hectic but at
the same time positive and dynamic. The same description appears to fit the
workflows and the way people work together (someone who apparently has
a call with a customer asks the whole office about the current status of an
order).
52
Evaluation of the
interview situation,
Interruptions,
Other comments
Very productive and open atmosphere
No interruptions but his cellphone is constantly vibrating (he does not
answer)
P.G = Paul Geuting (Interviewer)
C.V = Claudio Vietta (Interviewee)
Teil 1: Unternehmen und Geschäftsmodell:
P.G: Vielen Dank, dass du dir die Zeit für dieses Interview genommen hast. Ich möchte Anfangs ein paar
Fragen stellen zu Unternehmen und Geschäftsmodell, insbesondere hinsichtlich Größe und Internationalität.
Wie viele Mitarbeiter hat euer Unternehmen in Deutschland und im Ausland? #00:00:22
C.V: Wir haben hier in Deutschland jetzt gerade fünf, wobei einer von denen Freiberufler und einer
Praktikant ist und in Indien sind es mit saisonalen Schwankungen bis zu 50. #00:00:49
P.G: Wie ist das so mit der historischen Entwicklung und den Wachstumsambitionen des Unternehmens?
#00:00:55
C.V: Es gibt große Wachstumsambitionen. Blattteller für die Welt! Erst mal für Deutschland und dann für
die Welt. Wir wollen es weiter stark skalieren. Wir befinden uns noch in den Anfängen, wobei wir auch
bisher schon starkt gewachsen sind. Historisch habe ich das Unternehmen mal für den Markt in Hong Kong
gestartet, da ist aber mein damaliger Partner abgesprungen, weil er aus persönlichen Gründen weg musste.
Für mich war damals klar, dass ich in China bleiben würde wenn ich hier ein Unternehmen gründe und ich
habe für mich entschieden, dass es Zeit war zurück nach Deutschland zu gehen. Ich bin also nach
Deutschland zurück und habe hier eine Crowdfunding Inititative gestartet, weil ich kaum noch Geld hatte,
um unseren ersten Container mit Tellern zu finanzieren. Das haben wir geschafft aber das Geld ging auch
wieder schnell weg. Dann haben wir eine GmbH gegründet und erstmal Kleininvestoren reingeholt. Im
ersten Jahr war es schwierig aber in den letzten zwei Jahren haben wir einen guten Weg gefunden.
Mittlerweile verkaufen wir unsere Produkte über die großen Handelsunternehmen wir Müller und auch über
große Caterer und Festivalveranstalter wie der Fusion [großes deutschen Musikfestival]. Auch haben wir
uns nach einiger Zeit dazu entschieden neben einer reinen Gewinnorientierung noch Leef Unlimited zu
gründen. Über Leef Unlimited finanzieren wir soziale und ökologische Projekte wie den Erhalt des
Regenwaldes. Demnach sind wir auf der einen Seite mit Leef profitorienitiert bzw. finanzieren uns selbst
und verfolgen gleichzeitig über Leef unlimited einen philantropischen Ansatz zur Verbesserung der sozialen
und ökologischen Situation. Die Profitorientierung ist aber ein sehr wesentlicher Bestandteil unseres
Geschäftsmodells. Einerseits tun wir ökologisch etwas sinnvolles indem wir ein Produkt vertreiben, was
biologisch innerhalb von 3 Monaten abbaubar ist und daher einfach weggeworfen werden kann und
andererseits unterstützen wir mit einem Teil des Profits Projekte, die entweder ökologisch oder sozial einen
Mehrwert liefern, der Außerhalb unseres Kerngeschäfts liegen kann. #00:06:45
P.G: Ihr habt also Verbesserungsambitionen was Natur und Soziales angeht? Was wäre denn ein Beispiel
für ein soziales Projekt und inwieweit profitiert die lokale Bevölkerung davon? #00:07:01
C.V: Der Hintergedanke war, dass Fonds für die Kinder unserer Arbeiter in Indien aufgesetzt werden, über
die dann schulische Ausbildung, also Schulgebühren, Papier und weitere Schreibartikel finanziert werden.
Auch unsere Kunden können gezielt für diesen Zweck spenden. Es war die Idee den Menschen eine
Möglichkeit zu geben, sich für diesen Zweck zu engagieren. Allerdings gehen wir jetzt auch wieder verstärkt
in das Thema Regenwald. Wir bemühen uns jedoch auch unsere Mitarbeiter von unserem Geschäftsmodell
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profitieren zu lassen, ganz im Sinne eines Social venture Gedankens. Wir wollen einerseits Geld verdienen
aber gleichzeitig einen positiven Impact haben. #00:08:40
P.G: Welche Zielgruppe gibt es konkret national und international? #00:08:41
C.V: Unser Geschäftsmodell adressiert Menschen in der Dritten und Ersten Welt. Es gibt bei den Blatttellern
unterschiedliche Qualitätsgrade, was die Qualität der Blätter und die Qualität der Verarbeitung angeht. Es
gibt vier Stufen im Standard und Premium Bereich. Die Premium Teller werden hauptsächlich in
Erstweltmärkten verkauft und die Standardprodukte dann zu einem kleineren Preis und in kleineren
Packungsgrößen in Ländern wie Indien. Es ist aber dennoch sehr schwierig in den lokalen indischen Markt
reinzukommen. #00:10:10
P.G: Welchen Stellenwert haben vor Ort die Produktionsbedingungen? #00:10:17
C.V: Produktionsbedingungen spielen eine wichtige Rolle. Während wir dem Thema Skalierbarkeit und
Effizienz eine hohe Wichtigkeit beimessen, gibt es dennoch Dinge, die wir aus einer ethischen Perspektive
nie tun würde. So werden bei uns beispielsweise keine Kinder arbeiten. Auch wollen wir ein angenehmes
Betriebs- und Arbeitsklima ermöglichen. Bei uns gibt es eine gute Bezahlung und Kleingruppen, die eine
angenehme Arbeitsathmosphäre ermöglichen. Auch was den Einkauf von Rohmaterialien angeht, gehen wir
keine Kompromisse ein. Das liegt unter Anderem daran, dass wir die etwas teuerern großen Blätter kaufen,
um das Unfallrisiko zu reduzieren. Die Arbeiter halten das Blatt in die Dampfpresse und ein Messer
schneidet die Ränder ab. Bei kleinen Blättern ist die Verstümmelungsgefahr um einiges Größer.
Konkurrenten von uns haben bereits große Sammelklagen am Hals. Nur so ist man aber in der Lage die
Preise anzubieten, die im Discounthandel verlangt werden. Wir befinden uns absichtlich nicht in einem
solchen Niedrigkpreissegment sondern bieten ein Produkt an, dass etwas höherpreisiger aber dafür auch
fairer produziert ist. Es kann foglich nur bis zu einem bestimmten Punkt optimiert werden. #00:14:27
P.G: Und welche Schnittstellen gibt es zu der lokalen Bevölkerung? #00:14:30
C.V: Es gibt überwiegend unsere beiden lokalen Produktionen für die überwiegend ich zuständig bin und
dann auch die Rohstofflieferanten. Man wächst in diese Netzwerke rein. Es werden sehr enge Beziehungen,
fast schon Freundschaften aufgebaut über lange Zeit. Entsprechend bewegt man sich in diesen Netzwerken
und versucht auch weitere Kontakte und Geschäfte zu vermitteln. #00:15:07
P.G: Das wäre meine nächste Frage gewesen. Wie vertrauensvoll und intensiv ist diese Zusammenarbeit?
#00:15:15
C.V: Also ich habe mich voll und ganz auf diesen Ansprechpartner verlassen. Es gibt verschiedene Wege,
die man gehen kann. Man kann es zum Beispiel mit Verträgen genau fixieren, wobei Verträge häufig nicht
viel Wert sind. Auf dem Papier ist man jedoch erst mal abgesichert. In China beispielsweise ist es relativ
sicher. Da achten die sehr stark drauf, weil sonst die westlichen Gelder versiegen würden. In Indien ist das
anders. Hier ist die Regierung viel viel wackliger im Sinne von verfolgen die das und ist das sicher? Wer
wird von wem bestochen? Das ist in Indien sehr schwierig und wenn du dich hier vor ein Gericht begibst,
dann ist es hoch wahrscheinlich, dass die bestochen werden. Du musst dir dann entweder auch jemanden
aus der Politik suchen, der seine Hand über dich hält oder du ziehst den Kürzeren. Meiner Meinung nach ist
es aber sinnvoller sich in diesem Marktumfeld weniger auf Verträge als viel mehr auf den bereits
beschriebenen Vertrauensweg zu verlassen. Das ist aus zwei Gründen sinnvoll. Einerseits geht es um die
die Verlässlichkeit in der Produktion in der es aufs harte Business ankommt. Ich brauche einen Partner dem
ich vertrauen kann und der mir verlässlich, rechtzeitig und in der geforderten Qualität das liefert, was ich
benötige. Daneben gehts es noch um die Arbeitsbedingungen. Oft sourcen die Produzenten und Dienstleister
in Indien selber Teile der Produktion aus, wenn diese es nicht mehr liefern können. Deutsche Unternehmen
setzen häufig Verträge auf, in denen Themen wie Kinderarbeit und umweltfreundliche Entsorgung klar
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geregelt sind. Diese Bedingungen werden dann von den Vertragspartnern zwar meistens erfüllt, allerdings
nicht von den Unternehmen, an die die Kapazitäten in Zeiten der Spitzenausastung ausgelagert werden. Das
bedeutet, dass der direkte Vertragspartner zwar keine Kinder beschäftigt und seinen Müll sachgerecht
entsorgt, aber nur einen Bruchteil dessen herstellt, was von dem westlichen Unternehmen abgenommen
wird. Der Rest wird dann durchaus von Subunternehmern hergestellt, die Kinder arbeiten lassen und ihren
Müll in die Natur schütten. Um das zu vermeiden, ist Vertrauen wichtiger als Verträge, die dort ohnehin
nicht besonders erst genommen werden. Ich bin sehr froh und habe auch Glück gehabt einen Partner zu
finden, der das ernst nimmt. Ich habe ihm deutlich gemacht, dass ein Fehler uns in den Ruin stürzen kann.
Wir vermarkten Nachhaltigkeit und Fairness als unsere Haupt Selling Points und als absolut wichtigen
produkt differenzierenden Faktor und es muss allen klar sein, dass ein entsprechender Vertrauensverlust
unwiderrufliche Reputationsschäden zur Folge hat. Das werden wir nie wieder los. Ich habe ihm also gesagt,
dass es wirklich wichtig ist, dass er sich an diese Vereinbarung hält und dass wir ihm auch das richtige Geld
dafür zahlen. Wir können dich nicht kontrollieren aber wir vertrauen dir, dass du uns nicht hintergehst. Nicht
vertraglich, sondern zwischenmenschlich. Es gibt dann die Einen, die nur auf ihren Profit achten und die
Anderen, die verstehen worum es geht. Wir hatten wirklich großes Glück jemanden zu finden, der diesen
Weg mit uns gehen wollte und die westlichen Werte versteht, die uns wichtig sind. Das ist in Indien um
einiges einfacher als in China, wenn es um fairness und Umweltschutz geht. Die Inder sind zwar keine Engel
aber im Kopf doch etwas menschlicher und unserem Wertekodex etwas näher. #00:20:36
Teil 2: Markt und Rahmenbedingungen:
P.G: Jetzt haben wir schon einiges vorgegriffen, was thematisch schon in den nächsten Teil unseres
Interviews fallen würde, die Unterschiede zwischen erst- und drittwelt Markt und Rahmenbedingungen. Es
würde mich trotzdem noch interessieren, wie du die Marktdynamik in Indien wahrgenommen hast.
#00:20:40
C.V: Es ist um einiges schneller und dynamischer als in westlichen Märkten. Auch sind Dörfer in Indien
kleiner und weiter voneinander entfernt, was uns vor infrastrukturelle Herausforderungen stell. Die
Markteintrittsbarrieren in westlichen Märkten sind viel höher, weil alle Anfangsinvestitionen mehr kosten.
Beispielsweise braucht in Deutschland jeder Vertriebler ein eigenes Auto. Das geht in Entwicklungsländern
um einiges besser. Die Menschen und Unternehmen sind um einiges weniger zögerlich. Auch würde eine
Ladenkette mit vielen Stores viel spontaner darüber entscheiden, ob ein neues Produkt in das Portfolio
aufgenommen wird. In Deutschland würde man Produkte viel zögerlicher auf den Markt bringen.
#00:21:45
P.G: Du hasttest vorhin erwähnt, dass es korruptionsbedingt um einiges schwieriger ist, bei den lokalen
Institutionen sein Recht einzufordern. Mich würden aber besonders interessieren ob es möglich ist, durch
vertragliche Arrangements zu verhindern, dass Informationen das Unternehmen verlassen. Ihr arbeitet ja
sehr eng mit eurem Produzenten zusammen und euer Geschäftsmodell ist ja relativ nachvollziehbar.
#00:22:21
C.V: Das ist in der Tat ein schwieriges Thema. In China hatten wir häufig das Problem, dass wir etwas
produziert haben und fast zeitgleich ein fast identisches Produkt auf den Schwarzmarkt gelangen konnte.
Dort haben wir kommuniziert, dass wir bis zu einem bestimmten Punkt dieses Verhalten akzeptieren. Wir
haben eingesehen, dass wir es nicht verhindern können und daher hingenommen, dass es einige Kopien
unseres Produktes aus fremder Produktion gab. Wenn es jedoch Überhand nahm, haben wir die
Konsequenzen gezogen. Allerdings haben wir nicht auf unseren Vertrag gezeigt und den entsprechenden
Lieferanten verklagt, sondern sind auf die Händler zugegangen und haben diese davon überzeugt, keine
Produkte des entsprechenden Produzenten mehr zu kaufen. Es wäre ohnehin nicht sinnvoll gewesen sich
55
auf die chinesische Gerichtsbarkeit zu verlassen. Stattdessen haben wir den sozialen Weg der Netzwerke
gewählt und so Druck ausgeübt. So läuft es auch in Indien. Es kommt sogar vor, dass eine Sanktionierung
durch Stakeholder stattfinet, die befürchten, dass sie selber Schaden nehmen, wenn wir hintergangen
werden. Wir waren ja vorher schon zu dem Schluss gekommen, dass das Thema Vertrauen und
partnerschaftliche Beziehungen zu Zulieferern einen wichtigen Erfolgsfaktor darstellt und gerade der
Umgang mit den lokalen Partnern ist eine wichtige Erfolgsvoraussetzung, die wir über lange Zeit gelernt
und kultiviert haben und die wir nicht an die Konkurrenz verlieren wollen. Gerade weil wir ein low-tech
produkt vertreiben geht es bei uns weniger um konkrete technologische Produktinformationen sondern viel
mehr um die Art und Weise, wie wir unser Business führen. Und dabei spielt der Umgang mit den lokalen
Produzenten eine entscheidende Rolle. #00:24:46
P.G: Wie wirkt sich das auf die Möglichkeit aus Wettbewerbsvorteile zu kopieren? #00:24:49
C.V: Jeder kann das eigentlich kopieren. Aber ich muss sagen, dass wir bisher sehr gute Erfahrungen mit
der Weitergabe von Informationen gemacht haben, eben weil wir nicht auf die Verträge zeigen sondern
unsere Beziehungen auf Vertrauen und langjähriger Zusammenarbeit basieren. Ich glaube im
produzierenden oder entwickelnden Gewerbe gibt es zwei Möglichkeiten, um sich einen
Wettbewerbsvorteil zu verschaffen bzw. zu behalten. Entweder du bis so unglaublich schnell und innovativ,
dass du die ganze Zeit etwas neues machst und dich letztenlich nicht groß darum kümmerst, ob du kopiert
wirst oder nicht oder du versuchst die Sache einzumauern über beispielsweise Patente oder sonstige
vertragliche Arrangements. Ich glaube diese Einmauerung ist kein Erfolgsmodell. Man kann alles kopieren
wenn man unbedingt will. Und wenn das bedeutet, dass du dir einen Hacker besorgst, der Daten klaut.
Sobald dein Produkt auf dem Markt ist wird es ein vergleichbares Produkt geben. Es ist auch nicht
sonderlich schwierig Patente zu umgehen, indem einfach bestimmte Produkteingenschaften abgeändert
werden. Ich habe schon oft gehört, dass Patente vorsätzlich geknackt wurden. Das ist im high
technologybereich schwieriger aber insgesamt musst du schon sehr gute Verträge haben und ein gutes Patent
und das haben die Wenigsten. #00:27:38
P.G: Und wie geht ihr damit um, dass ständig erneuert werden muss, um den Wettbewerbsvorteil zu
erhalten? #00:27:40
C.V: Bisher haben wir häufig top down entschieden, welche Produktanpassungen vorgenommen werden.
Mittlerweile sind wir aber so weit, dass wir auch offen in die Disukussion gehen mit den Produzenten aber
auch mit den lokalen Kunden und Lieferanten. Auf diese Art und weise versuchen wir potentiellen Kopien
immer einen Schritt voraus zu sein. Unsere Strategie basiert also stärker auf Bewegung als auf Protektion.
Das ist ja insbesondere für unser Geschäftsmodel wichtig, weil wir uns stärker über Inhalte wie
Nachhaltigkeit anstelle von besonders günstigen Preisen differenzieren. Demnach muss man sein Produkt
immer neu denken und kommunizieren, um wettbewerbsfähig zu bleiben. Wir sind momentan bei ca. 20
Produkten. Bevor es jetzt weiter in eine stärkere Portfoliodiversifizierung geht müssen wir aber unsere
Organisation erst mal organisch nachwachsen lassen. Deshalb erweitern wir unsere Produktpalette
gegenwärtig eher inkrementell. Sobald aber mehr Mittel zur Verfügung stehen werden wir uns auch wieder
weiteren Produktinnovationen widmen. Ein konkretes Beispiel wäre eine Produktlinie, die bestimmten
Gastro Normen entspricht. Das kostet natürlich eine Menge Geld in der Entwicklung und auch der
Maschinenanschaffung aber man hat mehr Kunden, für die es einen großen Mehrwert bietet, wenn
beispielsweise die Teller in bestimmte Behälter der Gastronomen passen. Auf dieser Basis können dann
weiter die Modelle verändert werden. Die verschiedenen Teller Modelle folgen dabei fast schon gewissen
Moden. In einem Jahr werden Runde und im anderen Eckige Teller gekauft. Man muss in jedem Fall dem
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Markt immer voraus sein und das Produkt so anpassen, dass eine Produktkopie sinnlos wäre, davon hängt
Wettbewerbsvorteil ab. #00:29:01
Teil 3: Wettbewerbssituation:
P.G: Wie sieht die Wettberwerbssituation aus? Gibt es lokale und internationale direkte Konkurrenz?
#00:29:10
C.V: Es ist mittlerweile ein Markt an Konkurrenten entstanden, lokal sowie auch international. Es gibt
einige wenige lokale Unternehmen mit eigenen Produktionen, die aber meistens als Preisführer auftreten –
ein Markt, in dem wir ja nicht unterwegs sind. Wir begreifen uns eher als Qualitätsführer, der sich über
Nachhaltigkeit und Fairness differenziert. International haben wir in Europa verstärkt Konkurrenz aus dem
zuliefernden Bereich für die Gastro bekommen. Also große Websites, Caterer etc. die gebündelt alles
verkaufen. Die nehmen auch das Palmenblatt mit rein. Die machen das nicht so persönlich sondern kaufen
es einfach irgendwo. Und weil die auch funktionierende Vertriebskanäle haben und große Mengen
produzieren, können die auch harte Presiverhandlungen führen. Da sind wir natürlich etwas in Bedrängnis
mit unserem Ansatz, dass wir bestimmte Dinge aus einer moralischen Perspektive einfach nicht diskutieren.
Das führt zu einem starken Anpassungdruck, auch preislich. Das ist in der Gastronomie für den Einkäufer
sehr wichtig. Ein durchschnittlicher Caterer würde sich in jedem Fall für die Alternative entscheiden, die
zwei Cent günstiger ist. Wie bereits erwähnt ist es ein wichtiger Faktor, dass wir unsere Produkte auf der
Preis sowie auf der Nutzen Seite kontinuierlich anpassen, weil wir uns ja auf Patente nicht verlassen
könnnen. Um mit den Discountern preislich mithalten zu können und anderen Konkurrenten inhatlich
voraus zu sein versuchen wir uns unter Einbezug von Kunden, Lieferanten und Partnern immer weiter zu
entwickeln und nie stehen zu bleiben. Mit einem Partner fangen wir jetzt zum Beispiel an einen bestimmten
Laser zu kaufen, mit dem wir alle möglichen Symbole und Logos in unsere Teller lasern können. Die
Anderen sind jetzt gerade soweit, dass sie die Logos reinpressen können und in dem Moment in dem die
Konkurrenz ihren Kunden anbieten kann, dass Logo reinzupressen, was genau wie bei uns 300 EUR
Einrichtungskosten bedeutet können wir sagen, wir haben durch das Lasern keine Einrichtugnskosten mehr.
Es kostet einfach 3 Cent mehr pro Teller. Du musst immer weiter gehen und es geht bei diesem Produkt
gerade darum, wer sich mit diesem Produkt in die Köpfe der Leute befördert und sich als Marke
entsprechend platziert. Es ist oft so, dass der Erste sich am besten platziert. #00:34:16
P.G: Passiert das dann Top-Down oder habt ihr einen konkreten Innovationsprozess, der die demands des
Marktes mit eurem Offering synchronisiert? #00:34:30
C.V: Das kommt von beiden Seiten. Zum Einen ist es wichtig auf Trends zu achten und auch mal
hierarchisch zu entscheiden, was angepasst werden muss aber zum Anderen muss man auch die Meinung
der Produzenten, Kunden und ganz konkret der Arbeiter einfliessen lassen um das Produkt zu verbessern
oder Kosten zu optimieren. Es wird dann in großer Runde besprochen und von uns als Management
entschieden. Am Ende geht es darum so viele Vorschläge wie möglich einzubeziehen und solange jemand
Vorschläge auf den Tisch legt, die das Produkt verbessern oder die Kosten reduzieren, freuen wir uns
natürlich. Ein weiteres Besipiel für eine indirekte Produktänderung ist der Bereich Festivals und
Veranstaltungen, den wir mit Leef Unlimited als Non Profit Spalte angehen. Durch diese Organisationsform
haben wir die Möglichkeit Dinge zu tun, die wir als Profitorientiertes Unternehmen nicht tun können bzw.
wir können ganz anders auftreten. Dieses Nonprofit modul dient uns sozusagen als Rückzugsort und hilft
uns eine starke soziale Marke aufzubauen. Man kann das intern als Kostenstelle laufen lassen und trotzdem
gibt es einen spill-over effekt der Notforprofit Marke auf die profitorientierte Marke. Noch besser wäre eine
gGmbH. Alles was dort als Gewinn anfällt investieren wir jedoch in den Wald. #00:37:37
P.G: Was gibt es sonst noch für Projekte? #00:37:45
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C.V: Wir haben für uns herausgefunden, dass der Naturschutz als Hauptprojekt am sinnvollsten und
konsistentesten ist. Es passt einfach gut. Durch die Nutzung von Blättern werden Blätter geschützt, das
macht irgendwie Sinn. Was leider nicht geht, ist das ganze in Indien zu machen, weil das ja den Kreis sehr
gut schließen würde aber da würde die indische Regierung nicht mitspielen. #00:38:43
P.G: Wo wir wieder bei diesem institutionellen Problem wären. #00:38:47
C.V: Genau. Indien hat zum Beispiel eine ganz krasse Wachstumsökonomie und wenn irgendwo – das kann
der schönste Urwald sein, wo die letzten indischen Stämme frei leben – Kupfer gefunden wird kommt der
Minister und fragt, welche Mining Firma da rein gehen soll. Die kommen dann schnell und fragen nach den
Preisen, die zur Schürfung benötigt werden und nachdem dann ein paar Bestechungsgelder geflossen sind,
wird alles platt gemacht. Die Menschen werden weggejagt, die Wälder abgeholzt und die Mine eröffnet.
Und da haben weder die Leute ein Stimmrecht die im Wald gelebt haben noch sonst irgendwer. In dem
Moment wo du anfängst Wald zu schützen, ist die Regierung die erste, die den Geldhahn zudreht. Die findet
dann raus wie du dein Geld verdienst und verbietet dir dann dort zu produzieren. #00:39:50
P.G: Damit integriert ihr ja schon Stakeholder in eure Entscheidungsprozesse, die nicht direkt was mit
eurem Unternehmen zu tun haben. #00:39:54
C.V: Ja, es geht uns darum Stakholdern eine Stimme zu geben, wie beispielsweise der Natur oder der
Urbevölkerung und deren Mikrosysteme zu schützen. Es ist ein Grundsatzfrage der Moral. Wie willst du
dein Business führen. Aber es führt auch zu einem anderen Committment der Mitarbeiter und der lokalen
Rahmenbedingungen, in denen man sich als Unternehmer bewegt. #00:40:45
P.G: Wie stark ist das Unternehmen in die lokale Community integriert und wie ist die Reputation des
Unternehmens? #00:40:50
C.V: Wir sind sehr gut verankert und die Leute gehen lieber in unser Unternehmen zum Arbeiten als
woanders hin. Wir haben eine sehr gute Reputation und werden als fairer Arbeitgeber wahrgenommen.
Niemand hat Angst vor uns und das ist keine Selbstverständlichkeit, wenn beispielsweise ein großer
Konzern wie Bayer kommt. Das ist bei uns ganz anders. Wir haben ein sehr positives Verhältnis. Neben
fairen Löhnen und Arbeitsbedingungen zahlen auch Projekte wie das Anfangs erwähnte Projekt zur
Unterstützung der Arbeiterkinder auf eine hohe Legitimität in der Bevölkerung ein. Letzendlich führen faire
Abreitsbedingungen und Löhne sowie derartige Projekte nicht nur zu einer Verbesserung der lokalen
Situation und zu einem höheren Vertrauen sondern auch zu einer positiven Produktdifferenzierung in allen
Märkten und auch nach den Aspekten muss entschieden werden, wofür der Kunde am Ende bereit ist mehr
auszugeben. Grundsätzlich ist in Europa Umweltschutz fast einfacher als soziale Projekte. Und bei den
Sozialen Themen werden sehr viele Fehler gemacht. Beispielsweise in der Entwicklungshilfe. #00:43:50
P.G: Um noch mal auf das Kopieren von Geschäftsmodellen oder Produktideen zurückzukommen. Warum
kopiert niemand das Geschäftsmodell obwohl ihr einen so offenen Umgang mit euren Partnern pflegt?
#00:44:20
C.V: Unsere lokale Verankerung ist um einiges nachhaltiger als beispielsweise Lieferverträge. Um ein
konkretes Beispiel zu nennen, zusammen mit unserem Produzenten vor Ort sind wir Qualitätsführer. Es gibt
niemanden, der Teller auf Palmenbasis in unserer Qualität herstellt. Ich bin mir sicher, dass wir diese
Qualität nur halten können, weil wir so stark in die Community integriert sind und auch ein so inniges
Verhältnis mit unseren Geschäftspartnern haben, die uns vertrauen und die vor allem auch glauben, dass das
was wir vorhaben gut für das Land und die Menschen ist. Ich kann mir nicht vorstellen, dass jemand dieses
Committment an den Tag legen würde, einfach nur auf Basis eines Vertrags. So haben wir eine Freundschaft
aufgebaut und unterstützen uns gegenseitig. Genauso will ich auch, dass er weiter mit uns wächst und würde
den Produzenten nicht für ein paar Cents weniger Kosten wechseln. Er weiß auch, dass er sich ins eigene
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Fleisch schneiden würde, wenn er woanders verkaufen würde. Und das wird ständig versucht. Dann
bekomme ich Mails von ihm mit dem Hinweis wer versucht hat direkt bei ihm zu kaufen und er legt mir
dann nahe dort selber anzurufen und zu fragen, ob die nicht bei mir kaufen wollen (lacht). So muss es auch
laufen. Er könnte ohne Probleme mehr verdienen indem er hinter meinem Rücken verkauft. Daran ändern
auch Verträge nichts. Bis ich dem das nachgewiesen habe, dass der hinter meinem Rücken verkauft sind
Jahre vergangen. Dieses Vertrauen und die örtliche Eingebundenheit sind eindeutig wichtige Punkte was
die Verteidigung von Wettbewerbsvorteilen angeht. #00:46:40
Teil 4: Verteidigungsmechanismen:
P.G: Kannst du mir noch etwas über die Komplexität eurer Arbeitsprozesse im In- und Ausland sagen?
#00:47:00
C.V: Wir befinden uns gerade in einer Transitionphase von learning-by-doing zu etwas strukturierter. Wir
haben alle unterschiedliche Hintergründe und wir haben uns sehr unstrukturiert entwickelt. So schrittweise
und erfahrungsbasiert sieht beispielsweise auch unser Führungsstiel aus. Wir haben eigentlich alle wenig
mit diesem Business zu tun gehabt und wollten aus unseren alten Berufen heraus. Demanch mussten wir
uns verändern und anpassen. Wir haben immer wieder versucht ordentliche Strukturen zu bauen, diese
haben wir aber selber oft wieder eingerissen, weil sie uns auch wieder behindert haben, auch wenn man
flexible sein will. Letztendlich dokumentieren wir unsere Schritte nicht immer genau und wir hatten jede
Menge Chaos. Daran wollen wir arbeiten, weil wir das Gefühl haben, dass die Nachteile überwiegen. Der
Grund dafür, dass die Konkurrenz so schnell reagieren konnte und so schnell in den Markt gedrängt ist sind
bestimmte strukturelle Voraussetzungen. Die hatten schon eine funktionierende Organisation, die hatten
schon funktionierende Vertriebsnetze und da haben die das einfach nur reingegeben und haben diese
Strukturen genutzt. Wir hingegen mussten diese Strukturen erst erschaffen und haben die dementsprechend
auch nicht so professionell aufgebaut wie die. Viele Konkurrenten hatten einfach bereits vorher bestimmte
Ressourcen, die einen Markteintritt massiv begünstigt haben – insbesondere wichtig sind in diesem
Zusammenhang Vertriebsnetze und eine Online Infrastruktur. Wenn du das alles schon hast, wird alles
billiger, besser und schneller. Bis wir uns zurechtgefunden haben, ist es halt dann wurschtelig und
unstrukturiert. Jetzt wo wir es gelernt haben, können wir die Prozesse und Strukturen auch besser
beschreiben und abbilden. Ganz anders verhält es sich mit Leef Unlimited [dem Unternehmensteil,
gemeinwohlorientiert arbeitet und Festivals und Veranstaltungen beliefert]. Die Unstrukturiertheit wirkt
sich hier als Vorteil aus, da auch die Festivalbetreiber im Schnitt unstrukturierte Leute sind. Jedes Festival
ist einzigartig und es kann dort ein Vorteil sein, weil man unstrukturierte Systeme mit diesen Leuten
errichtet. Wenn da jetzt ein Zulieferer bei einem Festivalbetreiber anrufen würde und nach der Nonfood-
Abteilung verlangen würde, dann würde der Festivalveranstalter mit Sicherheit auflegen. Die können dann
auch nie so flexibel auf die Kundenbedürfnisse eingehen. #00:51:22
P.G: Wie verhält es sich mit der Komplexität der Arbeitsprozesse in der Fabrik in Indien? #00:51:33
C.V: Das gleiche gilt für unsere Produzenten vor Ort. Es war uns ja wichtig nicht ausschließlich auf
Effizienz zu achten und auch ein angenehmes Arbeitsumfeld zu ermöglichen. Demnach sind die Strukturen
zwar ähnlich improvisiert, das Ergebnis jedoch sehr gut. Wir haben schon versucht Effizienzen zu steigern
und die Abläufe sowie die Hygienestandards zu optimieren. Also Fragen wie wo braucht man Mundschutz,
wie gehen wir mit dem Wasser um, wird das gereinigt oder UV gefilter. Da haben wir schon einiges
gemacht, ich muss aber fairerweise auch dazu sagen, dass unser Partner auf einem für Inder sehr sehr hohen
Niveau war. Ich habe mich damals genau auf dem Markt der Zulieferer umgesehen und da begegnen dir
sachen, die du als Deutscher nicht ansatzweise kennst, geschweige denn ein deutscher
Sicherheitsbegutachter. Trotzdem entwickeln wir unsere Partner gezielt weiter hinsichtlich deutscher
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Sicherheits- und Qualitätsstandards. Davon profitiert er, weil er sich qualitativ verbessern kann und wir,
weil wir einen Partner entwickeln, der auf unsere Bedürfnisse zugeschnittenen ist. #00:53:45
P.G: Würdet ihr eure Systeme, Prozesse und Strukturen im Allgemeinen als Komplex oder eher simpel und
intuitiv bezeichnen? #00:53:47
C.V: Eher letzteres. Ich glaube der Komplexitätsgrad von Organisationen muss sorgfältig gewählt sein. Das
ist mir schon vorher bei anderen Unternehmen aufgefallen. Falls ein großer Auftrag kommt, muss man ja in
der Lage sein flexibel die Kapazitäten anzupassen. Wenn beispielsweise REWE morgen anruft und ein paar
Tausend Produkte bestellt, dann muss das schnell gehen. Wenn man aber von vorneherein mit hohen
Chargen rechnet und das Ganze auf Skalierung ausrichtet läuft man Gefahr sich in für die eigene Größe zu
komplexen Strukturen zu verlieren und diese gar nicht mehr zu nutzen. Wenn beispielsweise eine Bestellung
pro Tag kommt und das Bestellungssystem ist zu aufwendig, dann scheut man ja vor den Reibungsverlusten
zurück. Bisher mache unsere simplen Reports und controlling Aufgaben selber und fülle auch die Etiketten
beispielsweise selber aus aber wenn das Geschäft dann wächst kann das System die Informationen dann
später selber aus den Listen herausziehen. Ich habe mit einem größeren Konkurrenten gesprochen und es
wurde auch wieder deutlich, wie große Strukturen im Weg stehen können. So können wir im Handumdrehen
neue Produktbündel auf den Markt werfen, was die Konkurrenz nicht kann, weil es bestehende
Lieferverträge und Systeme gibt. Es wird also Flexibilität gegen Effizienz getauscht. Das funktioniert dann
wie bei Amazon. Da ist keiner mehr, der irgendwas anpassen kann. Bis die überhaupt was entwickelt haben
und die Infrastruktur etwas anzubieten, ist lange Zeit vergangen. #00:56:55
P.G: Würde die Abwerbung von zentralem Personal einen starken Wissensverlust bedeuten bzw. wären
diese in der Lage das Geschäftsmodell sofort zu kopieren? #00:57:03
C.V: Sehr feinteilige Arbeitsgliederung erzeugt natürlich Komplexität und verhindert im Falle eines
Abwerbungsversuchs den Verlust von erfolgsentscheidenden Firmeniformationen. Und für uns würde die
Abwerbung von zentralen Mitarbeitern natürlich eine starke Gefährdung bedeuten. Obwohl diese Gefahr
bei uns gegeben ist haben wir derartige Probleme jedoch bisher noch nicht gehabt. Ich führe das auf die
bereits erwähnte freundschaftliche Beziehung und das hohe Committment der Partner und Mitarbeiter
zurück. Man müsste es erstmal schaffen die abzuwerben. Meiner Meinung nach ist es eine Mischung aus
Alldem. Auch das Brandimage nach Innen, dass nur über Vertrauen aufgebaut werden kann, ist unglaublich
wichtig. Wir kommunizieren, dass wir einen positiven Beitrag leisten wollen und erzeugen dadurch auch
bei unseren Mitarbeitern einen Zusammenhalt, der über eine bloße Arbeitgeber-Arbeitnehmer-Beziehung
hinaus geht. #00:58:50
P.G: Wie geht ihr intern miteinander um und wirkt sich das auf den Unternehmenserfolg aus? #00:58:55
C.V: Also ich habe ganz klar den Eindruck, dass unsere Reputation und auch unsere Unternehmenskultur
als Berliner Start-up einen erheblichen Beitrag leisten zu unserem Unternehmenserfolg. Das kann zum einen
an der externen Wahrnehmung unseres Unternehmens als jung und dynamich liegen oder am Committment
unserer Mitarbeiter und der Bemühung einen positiven Beitrag zu leisten. Aber so genau kann das natürlich
keiner sagen. #01:00:51
P.G: Ich hätte noch eine letzte Frage: Du hast ja gesagt, dass ihr zusammen mit euren Partnern gewachsen
seid. Würde ein Ende der Geschäftsbeziehung bzw. die Suche nach neuen Partnern zu hohen Kosten auf
beiden Seiten führen? #01:01:22
C.V: Da entstehen in jedem Fall auf beiden Seiten hohe Kosten. Wir wissen beide genau, was wir
voneinander erwarten. Einerseits hinsichtlich der Produkteigenschaften aber auch bezüglich des
gegenseitigen Umgangs miteinander. Ich müsste bei einem Wechsel einem neuen Partner all das neu
beibringen und einen Modus des Umgangs finden. Darüber hinaus gäbe es natürlich auch noch
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Schwierigkeiten weil ich neue Gebäude finden und die Maschinen dort hinschaffen müsste. Auf der anderen
Seite hat natürlich auch mein Partner nichts davon eine langjährige Geshäftsbeziehung aufzugeben. Wie wir
ja vorhin besprochen haben ist es auch erfolgsentscheidend eine bestimmte Infrastruktur (beispielsweise
Vertrieb oder E-Commerce) zu besitzen, um ein Business erfolgreich skalieren zu können. Daher ist der
Erfolg ja nicht garantiert, nur weil ich theoretisch das Geschäftsmodell kenne. Vertrauen ist das A und O
und ich glaube nicht, dass einer meiner Geschäftspartner diese langfristige Geschäftsbeziehung aufs Spiel
setzten würde. #01:03:02
P.G: Vielen Dank für das angenehme Gespräch. #01:03:04
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Appendix 4. Official Statement of Original Thesis
By signing this statement, I hereby acknowledge the submitted thesis, titled:
to be produced independently by me, without external help.
Wherever I paraphrase or cite literally, a reference to the original source (journal, book, report, internet,
etc.) is given.
By signing this statement, I explicitly declare that I am aware of the fraud sanctions as stated in the
Education and Examination Regulations (EERs) of the SBE.
Place: Maastricht
Date: 07th December 2015
First and last name(s): Paul Geuting
Study program: International Business: Strategy & Innovation
Course/skill: Master Thesis
ID number: I6102371
Signature: _________________________________
Sustained Competitive Advantage of Different Sized Multinational Corporations in
Rural Base of the Pyramid Markets:
An Exploration of Isolating Mechanisms from a Combined Natural-Resource-Based View and
Dynamic Capabilities Perspective