Sourcing for the base of the pyramid: Constructing supply chains to address voids in subsistence markets
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Abstract Substantial work has described downstream distribution systems for subsistence markets, but little is known about how upstream supply chains support these efforts. We suggest that a multinational corporation (MNC) entering these markets must resolve the institutional voids in product, labor, and capital markets, as well as address issues of regulatory ambiguities and the lack of contracting mechanisms that exist at the raw material, manufacturing, distribution, and marketing stages of the supply chain. We analyze the nature of these voids and their challenges, map them onto the value chain, discuss their interconnections, and suggest that they do not impact all firms equally. We provide examples from the food, beverage, and textile industries of how four firms have addressed institutional voids in constructing their supply chains. We conclude by providing implications, both across the value chain and regarding the trade‐offs of partnering with non‐profit agencies. Our analysis highlights the importance of going beyond the broad impact of the institutional environment to understanding its more nuanced and multi‐faceted effect on supply chains.
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- Authors
- Parmigiani, A., & Rivera‐Santos, M.
- Affiliations
- University of Oregon (US)
- Babson College (US)
- Venue
- Journal of Operations Management
- Publisher
- Wiley
- Published
- 2014-10-31
- Volume
- 33-34
- Issue
- 1
- Pages
- 60-70
- ISSN
- 0272-6963 (ISSN-L)
- 1873-1317
- OpenAlex
- W2056040218
- Cited by
- 192
- References
- 64
- Citations by year
- 2026: 7 · 2025: 17 · 2024: 15 · 2023: 18 · 2022: 18 · 2021: 26 · 2020: 19 · 2019: 26 · 2018: 20 · 2017: 13 · 2016: 6 · 2015: 7
- FWCI
- 24.34
- Type
- journal article
- Language
- en
- Open access
- green
- papers.ssrn.com
- Licence
- Locations
- Journal of Operations Management (publishedVersion)
- SSRN Electronic Journal (submittedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Business and International Management › Innovation and Socioeconomic Development
- Social Sciences › Business, Management and Accounting › Strategy and Management › Sustainable Supply Chain Management
- Social Sciences › Business, Management and Accounting › Strategy and Management › Global trade, sustainability, and social impact
- Keywords
- bottom of the pyramid, supply chain construction, institutional voids, subsistence markets, multinational corporations, value chain, raw material procurement, labor market, capital markets, regulatory ambiguity, contracting mechanisms, nonprofit partnerships, food industry, beverage industry, textile industry
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