Empirical Evidence towards an Inclusive Business Model: Lessons Learned from Aquaculture in Tanzania

Based on a thorough literature review of Base of the Pyramid (BoP), this chapter investigates how foreign firms, local firms, and small-scale farmers can form an inclusive business model for the development of aquaculture in Tanzania. The chapter follows an embedded, single case study design, using semi-structured interviews with key informants and case firms. Empirical evidence from this study challenges part of the BoP literature, as the literature to a high extent emphasizes co-creation and bottom-up innovations with the BoP. However, it is found that co-creation is very difficult to perform within aquaculture in Tanzania due to the significant lack of knowledge and diffusion of aquaculture practice, and also due to the severe constraints faced by small-scale fish farmers. Instead, this study has developed a framework for aquaculture development, referred to as the hub model, to demonstrate how small-scale fish farmers can be integrated into the local value chain through a hub firm which possesses the resources and capabilities of a foreign and a local firm. Meanwhile, our data suggest that due to a lack of legitimacy in Tanzanian aquaculture, there is a slow development and diffusion to a certain extent, where the current BoP literature has not addressed this legitimacy issue when implementing BoP businesses. The fact that co-creation is very context-dependent and, despite its prevalence in the literature, has limited relevance in its widest application within important sectors such as agriculture, is a theoretical contribution of this study. From an international business perspective, this study draws attention to the constraints that exclude many farmers from the potential value of export and provides a clear example of how foreign firms contribute eliminating those constraints and increase productivity by transferring resources and capabilities through a local joint venture. Additionally, the constraints identified and solutions suggested in this study have significant managerial implications.