Strategies for Tackling Institutional Voids at the Bottom of the Pyramid in Egypt

Multinational companies (MNCs) identify various profitable opportunities in subsistence and Bottom of the Pyramid (BOP) markets, due to continuous population growth and changing lifestyle. However, MNCs experience institutional voids in BOP markets, such as the lack of qualified labor, poor infrastructure, the inability to access quality suppliers, and others. In order to tap into those opportunities, MNCs choose to tackle such voids by integrating the BOP population into their value chains to access local experience and knowledge, and thus the BOP become partners and not just consumers. This paper focuses on studying the strategies embraced by MNCs to face persistent institutional voids across the different constituencies of their supply chains. The focus of the study is on Egypt as one of the understudied African countries. A multiple case study research is employed involving four companies from the Fast-Moving Consumer Goods (FMCGs) sector in Egypt. Interviews are carried out with ten managers from the four MNCs, where two to three managers were drawn from each company. This is in addition to interviewing four managers from MNCs' partner NGOs. Furthermore, four focus groups with distributors, sellers, and consumers in BOP areas were employed; involving 10 individuals per focus group. The results of the research show the various strategies adopted by MNCs across their value chains, how they resolve voids addressed, and the possible impacts on BOP stakeholders and MNCs.