Developing sustainable business models within BOP contexts: mobilizing native capability to cope with government programs

Respective literatures on sustainable business models (SBMs) and the bottom of the pyramid (BOP) share the assumption that organizations can contribute to value creation for both business and society. The premise of a win-win solution for multiple stakeholders relies mostly on market-oriented solutions, giving little attention to the role that government programs and regulations may have in promoting such initiatives. At best, literature considers government as an obstacle to the development of SBMs in the BOP context. In this paper, we challenge that view by presenting the case of the Ecoelce project, an SBM developed in the BOP context of Northeastern Brazil. We show that this project transformed a coercive pressure from the Brazilian government into a strategic opportunity and a source of shared value. We argue that the mobilization of native capability was key in this process.