Supply chain inclusion in Base of the Pyramid markets: A cluster analysis and implications for global supply chains

Purpose
The purpose of this paper is to explore mechanisms of supply chain inclusion in Base of the Pyramid (BOP) settings. It distinguishes micro-, small- and medium-sized enterprises (MSME)-led local supply chains on the one hand and multinational enterprises (MNEs)-led global supply chains on the other hand. This paper aims to answer the following research question: Which mechanisms of supply chain inclusion are employed empirically by MSMEs and how can these mechanisms influence social impact creation in MNE-led global supply chains?

Design/methodology/approach
A large-scale empirical study of MSMEs operating in BOP markets is performed and a cluster analysis conducted to systematically categorize supply chain inclusion. The cluster analysis and current literature yield theory-based implications for MNE-led global supply chains.

Findings
The cluster analysis reveals three meaningful clusters of supply chain inclusion in BOP markets and highlights two main aspects. They include direct vs indirect mechanisms of inclusion and diversity in supplier relationships with local organizations aimed at either “sourcing” local capabilities needed for inclusion or “outsourcing” the inclusion. Based on these aspects, two scenarios are proposed and evaluated for local-global supply chain symbiosis.

Research limitations/implications
This study aims to contribute to the existing literature with a more fine-grained understanding of the inclusion of BOP actors in local supply chains and by proposing alternative trajectories for global supply chain inclusion.

Practical implications
The findings outline several important decisions that managers need to make to include BOP actors in supply chain activities.

Originality/value
This paper contributes a novel, combined perspective of local supply chains (MSMEs) and global supply chains (MNEs).