Paper short abstract:

BoP business by Japanese MNCs has yet to be successful, stuck in a dilemma between securing profits and achieving social agenda. Expanding the role of BoP to make their business more inclusive will increase the potential to overcome the dilemma, which will also be key to the success of SDG business.

Paper long abstract:

Many BoP businesses by Japanese MNCs that began by providing affordable products or services have yet to be successful. We show that the fundamental cause of their failure lies in a dilemma between securing profitability as a private company and achieving the social agenda of poverty alleviation at the BoP and that the MNCs are stuck in the middle, unable to achieve either of the two agendas. Next, we discuss BoP’s shift from its role as a mere marketplace to a production base or source of innovation, as Japanese MNCs have established global production networks. This is transforming the BoP business into an inclusive one that incorporates local communities into the value-chain of MNCs, which has the potential to balance the two challenges in a dilemma at a higher level through providing employment opportunities and increasing consumption by higher incomes, and through increasing productivity by strengthening and empowering human capital.

For Japanese MNCs to truly succeed in the BoP business, they need to address not only social challenges at the BoP but also environmental challenges in both emerging and developed countries. To reconcile such overall SDG-related challenges with their interests, Japanese MNCs will be increasingly required to redefine their role from a sustainability perspective.