Abstract:
The challenges that face MNPCs in making healthcare more affordable is a topic that
is being increasingly researched. These companies face challenges such as
pressure from governments around the world to lower their prices, stagnant growth in
developed markets and the failing blockbuster business model. Turning to new
markets, such as emerging markets, for growth will necessitate innovations in their
business models. The aim of this research was to understand what business models
will work in low-income patient markets, specifically in the South African base of the
pyramid context.
The investigation of four MNPCs through a case study methodology, allowed the
exploration of their current business models and ambidexterity level. Two of the four
MNPCs exhibited a purely exploitative business model and as such had very little
penetration into the BOP segment. One of the four MNPCs demonstrated a few
characteristics of ambidexterity, but applied mainly an exploitative model and had
limited access to the BOP segment. One of the four companies implemented all of
the characteristics of business models that are successful in entering BOP markets
as well as a high level of correlation to the characteristics of ambidexterity. The result
of this MNPC described was a successful entrance in the BOP segment.
The review of the literature and the findings of this research show that MNPCs can
adopt profitable business models to enter low-income markets that not only serve
consumers at the base of the pyramid but also provide sustained business benefits
to the MNPCs. The research study successfully achieved the research objectives
and provides insights to stakeholders as to which strategies are effective when
entering a low-income patient market and what are the elements that are missing
from business models that are not successful. The research also highlighted
institutional voids and barriers that are unique to the South African state health care
system.
