Frugal business model innovation in the Base of the Pyramid: The case of Philips Community Life Centres in Africa

Elsie K. Onsongo; Peter Knorringa; Cees van Beers

doi:10.1016/j.technovation.2022.102675

Frugal business model innovation in the Base of the Pyramid: The case of Philips Community Life Centres in Africa

Elsie K. Onsongo^*, Peter Knorringa, Cees van Beers

^*Corresponding author for this work

Academic staff unit

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

This paper investigates how a multinational enterprise (MNE) engages in frugal business model innovation to find the optimal balance between value creation and value capture in resource-constrained contexts in sub-Saharan Africa. Using qualitative content analysis, we analyse the case of Community Life Centres (CLC), a primary healthcare innovation developed by Royal Philips N.V., a multinational technology organisation headquartered in The Netherlands. Our findings show that an MNE can innovate by developing multiple iterations of the same business model—customising it to different geographical markets. Some aspects of the business model remain static, while others are dynamic. In this regard, the innovation process in a resource-constrained service sector is pegged on the financing model, and target markets are adjusted based on financial opportunities available, while the value proposition and costing mechanisms remain relatively static. This paper contributes new insights to the frugal innovation and business model innovation literature.

Original language	English
Article number	102675
Journal	Technovation
Volume	121
Early online date	7 Jan 2023
DOIs	https://doi.org/10.1016/j.technovation.2022.102675
Publication status	Published - Mar 2023

Bibliographical note

Acknowledgements
We would like to thank the participants of the European Academy of
Management (EURAM) Conference in Portugal in 2019 and the Africalics Conference in Tanzania in 2019 for providing valuable feedback.
We also appreciate the efforts of the editorial team and the anonymous
reviewers for taking the time and effort to review the manuscript and
provide detailed comments.
We thank the executives at Phillips NV in Amsterdam and Eindhoven, The Netherlands, and the research scientists at the Africa Innovation Hub in Kenya, staff at the Community Life Centres and at the
various County Health departments for generously giving their valuable
time for interviews and sharing information.
Finally, the authors would like to thank the Netherlands Organization for Scientific Research for supporting this research project. This
article reflects only the authors’ view, and any errors are the authors’
responsibility.

Publisher Copyright: © 2022

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title = "Frugal business model innovation in the Base of the Pyramid: The case of Philips Community Life Centres in Africa",

abstract = "This paper investigates how a multinational enterprise (MNE) engages in frugal business model innovation to find the optimal balance between value creation and value capture in resource-constrained contexts in sub-Saharan Africa. Using qualitative content analysis, we analyse the case of Community Life Centres (CLC), a primary healthcare innovation developed by Royal Philips N.V., a multinational technology organisation headquartered in The Netherlands. Our findings show that an MNE can innovate by developing multiple iterations of the same business model—customising it to different geographical markets. Some aspects of the business model remain static, while others are dynamic. In this regard, the innovation process in a resource-constrained service sector is pegged on the financing model, and target markets are adjusted based on financial opportunities available, while the value proposition and costing mechanisms remain relatively static. This paper contributes new insights to the frugal innovation and business model innovation literature.",

author = "Onsongo, {Elsie K.} and Peter Knorringa and {van Beers}, Cees",

note = "Acknowledgements We would like to thank the participants of the European Academy of Management (EURAM) Conference in Portugal in 2019 and the Africalics Conference in Tanzania in 2019 for providing valuable feedback. We also appreciate the efforts of the editorial team and the anonymous reviewers for taking the time and effort to review the manuscript and provide detailed comments. We thank the executives at Phillips NV in Amsterdam and Eindhoven, The Netherlands, and the research scientists at the Africa Innovation Hub in Kenya, staff at the Community Life Centres and at the various County Health departments for generously giving their valuable time for interviews and sharing information. Finally, the authors would like to thank the Netherlands Organization for Scientific Research for supporting this research project. This article reflects only the authors{\textquoteright} view, and any errors are the authors{\textquoteright} responsibility. Publisher Copyright: {\textcopyright} 2022",

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AB - This paper investigates how a multinational enterprise (MNE) engages in frugal business model innovation to find the optimal balance between value creation and value capture in resource-constrained contexts in sub-Saharan Africa. Using qualitative content analysis, we analyse the case of Community Life Centres (CLC), a primary healthcare innovation developed by Royal Philips N.V., a multinational technology organisation headquartered in The Netherlands. Our findings show that an MNE can innovate by developing multiple iterations of the same business model—customising it to different geographical markets. Some aspects of the business model remain static, while others are dynamic. In this regard, the innovation process in a resource-constrained service sector is pegged on the financing model, and target markets are adjusted based on financial opportunities available, while the value proposition and costing mechanisms remain relatively static. This paper contributes new insights to the frugal innovation and business model innovation literature.

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Frugal business model innovation in the Base of the Pyramid: The case of Philips Community Life Centres in Africa

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