Product development and innovation: dynamic capabilities in base of the pyramid off-grid energy market in India

Dynamic capability is an emerging area in strategic management. It draws its strength from behavioural and evolutionary economics. The importance of dynamic capability in the area of strategy has been realised in multiple contexts. Recently, the authors researching the base of the pyramid (BoP) have been conscious of the need for the special capability to overcome resource scarcity and information opacity to enter and work in BoP markets. The paper through a case-based approach, identifies dynamic capability to be an important strategic management process that fits well with the special capability to overcome BoP barriers. The research traced product development and innovation capability as two important dynamic capabilities in three firms providing decentralised energy access to Indian rural poor. The paper ends with a suggestion on managerial and policy prescriptions and underlines the importance of such dynamic capabilities for firms to sustain business in BoP markets.