Strategic Responses During Frugal Innovation at the Base of the Pyramid: the Case of Philips Community Life Centres
Abstract When multinational enterprises (MNEs) seek to serve the needs of base of the pyramid (BOP) environments, they are often confronted with several environmental factors, among them, severe resource constraints and institutional complexities. MNEs adopt two overarching strategic orientations to navigate these factors: the strategy to adapt to the new context, or the strategy to shape the context. This paper investigates how and when these strategic orientations are deployed in an MNE. It further explores the intra-organisational tensions and dilemmas that arise when these strategic orientations are implemented. This paper analyzes a case of frugal innovation in a primary care intervention developed and deployed in Kenya by Philips N. V., a Dutch multinational technology company. Several propositions are generated based on the case findings. The paper contributes to the frugal innovation literature which lacks rigorous, in-depth analytical case studies on organisational processes associated with new product development. It also offers managers a useful toolkit that could inform how they could strategically navigate the pressures of BOP environments.