Scaling up social businesses in developing markets

• Published in: Journal of cleaner production Vol. 139; pp. 295 - 308
• Main Authors: Bocken, Nancy M.P., Fil, Alison, Prabhu, Jaideep
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 15.12.2016
• Subjects: Business models; Business strategy; Developing markets; Earth and Related Environmental Sciences; Environmental Sciences; Geovetenskap och miljövetenskap; Miljövetenskap; Natural Sciences; Naturvetenskap; Social business; Social entrepreneurship; Sustainable growth; Business strategy; Social entrepreneurship; Business models; Developing markets; Sustainable growth; Social business
• ISSN: 0959-6526; 1879-1786
• DOI: 10.1016/j.jclepro.2016.08.045

Most of the world's poor live in developing markets and face unmet needs in core areas such as education, health, energy, sanitation and financial services. This offers businesses a vast opportunity for growth as these economies emerge from low-income to middle-income status. Social businesses in particular address a social need while generating profits typically reinvested into the business itself, but there is limited understanding of the ways through which social businesses achieve scale. This paper investigates how social businesses can scale up. First, we define scaling up as “increasing the number of customers or members of a business as well as expanding its offer and maximising its revenues until it reaches millions of people.” Second, using three in-depth case studies of social businesses that successfully scaled up according to these definitions, BRAC, Aravind and Amul, we identify scaling up strategies for social businesses. We identified market penetration, market development, product development and diversification as key strategies at different stages of business maturity. We find that there are two ways of increasing income generated that are linked to these four strategies: increasing revenue per stream and diversifying revenue streams. Our findings give insight to companies aiming to pursue social businesses and adds to the sparse literature on scaling up social businesses. A fruitful future research avenue would be to investigate the best sequence for applying these scaling strategies across companies and sectors over time. [Display omitted] •Social businesses address a social need while generating profits.•Key aims are increasing the number of customers and expanding the service/offer.•We identify social scaling up strategies building on three cases and literature.•Market penetration, Market development, Product development and Diversification.•It shows the importance of focusing on income generated to ‘finance social impact’.