In the upcoming years, consumers and businesses face an array of challenges, with rising income inequality being among the key ones. Nevertheless, addressing the income inequality through catering to the Bottom of the Pyramid and the Middle Class consumers also presents growth opportunities. This briefing shortlists strategies for companies that act proactively and address rising inequality early on.
This report comes in PPT.
Rising inequality has the potential to polarise the market into a high-income consumer segment at the top and a low-income segment at the bottom. It has serious consequences for social stability and economic growth, constraining the consumer base and consumer spending.
The bottom of the pyramid (BoP) is not all about developing countries. In developed markets, the size of the BoP is significant and has in recent years been expanding due to rising income inequality. By addressing the needs and wants of the low-earning consumers companies unleash this untapped potential.
Rising income inequality reduces the size and purchasing power of the middle class, but doubling down on meeting the changing needs of middle-class consumers can help businesses boost revenues.
Businesses have a critical role in reducing inequality, not only because of their capacity to drive positive change but also because addressing income inequality positively impacts business reputation and directly benefits the corporate bottom line.
Some specific actions for businesses to take to effectively tackle income inequality include adopting fair and inclusive business practices within the workplace, marketplace and supply chain, and developing a comprehensive CSR strategy that aligns with the company’s core values.
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