4.1. The concept of micro-enterprises

Both concepts, micro-enterprise, and micro-finance were pioneered in 1976 by Nobel Prize recipient Muhammad Yunus, founder of the Grameen Bank (Bank of the Rural), in Bangladesh. The bank was established to make small loans to the poor (predominantly women) to help them obtain economic self-sufficiency. The fundamental principle behind the Grameen Bank is that credit is a human right. This strategy was highly effective as the bank grew exponentially; from fewer than 15,000 borrowers in 1980, Grameen Bank has over 23 million people with better access to microloans, saving accounts and other financial services, more than 80 social enterprises supporting 170,000 micro-entrepreneurs improving the lives of more than 3 million poor beneficiaries, etc. ^{(Grameen, 2019)}.

Both terms, micro-business and micro-enterprise often have the same meaning, and internationally, most micro-enterprises are family businesses employing one or two persons. Most micro-enterprise owners are primarily interested in earning a living to support themselves and their families. They only grow the business when something in their lives changes and they need to generate a larger income. See Table 1.

Thereby, is necessary to describe the concept of business model.

4.2. Business Model

A business model is a model of a business. A generally accepted definition of the term “business model” has not emerged yet but we can say that it describes the logic of a “business system” for creating value that lies behind the actual processes ^{(OECD, 2018a)}. A model, on the other hand, is only an artificial representation of reality. It, therefore, has to detract focus from certain aspects while concentrating on others; it is impossible for all the variables that comprise reality to be adequately and consistently represented, particularly if the goal is to control for effect of certain factors over others. Due to a model can be descriptive or predictive, you would not rely on the outcomes of the model only in your making decisions. This is because a model cannot (and should not) be a complete and precise representation of reality (even for very simple social systems). A business model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts ^{(Osterwalder & Pygneur, 2010)}. Moreover, what is considered to be important for the model depends on the position of the observer ^{(Petrovic et al. 2001)}. The essence or core competency of the company’s business model is to know how it attracts, creates, storage, transform and deliver value. This logic influences important decisions, although in many cases it is very difficult to clearly and simply communicate their knowledge. This logic of the system, the business model, is based upon a complex mental model and that can only be really changed if the mental representation of the real world is altered first. The mental model can be described as a network of facts and concepts, and its content and structure contain our understanding of social and physical phenomena ^{(Morecroft, 1994)}. The focus is on internal processes and the design of infrastructure, which enables the firm to create value. The decision elements include product or service delivery, administrative processes, resource flows, knowledge management, and logistic streams. A business model describes how an organization (enterprise, business unit) creates, delivers, and captures value. The process of business model construction is part of the business strategy. The business model must be evaluated against the current state of the business ecosystem ^{(Korpela et al., 2013)}.

4.3. The Base of Pyramid

The term Base of the Pyramid (BOP) is used to describe people living in poverty in the broad sense in which the poor themselves understand and experience it ^{(Prahalad & Hammond, 2005)}. In this segment, consisting of two thirds of the population worldwide, there is great potential to earn money, offering sectors poor access to goods and services that they currently cannot access.

In the BOP there is a transformation: the need as a business opportunity ^{(Iturbide & Quintal, 2020)}. In 20,000 interviews conducted for the World Bank study Voices of the Poor, the poor describe not only a lack of income, but more fundamentally: a lack of access to goods, services, and economic opportunities ^{(Jenkins et al., 2010)}. Too often, people living at the BOP cannot get key products at the levels of quality and affordability that others rely on. They may lack steady jobs, business opportunities, clean water, electrical power, good roads, modern communications, healthcare, education, or financial services; or, in the absence of efficient, formal markets, they pay more for such services than those living at the top of the pyramid (a phenomenon known as the poverty penalty. Many people view those at the BOP as responsibilities of the state or subjects of charity. But if we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up ^{(Jenkins et al., 2010)}.

4.4. Inclusive Business as Business Innovation

According to ^{OECD (2018a, p. 21)}, business innovation is: a new or improved product or business process (or a combination thereof) that differs significantly from the firm’s previous products or business processes and that has been introduced on the market or brought into use by the firm.

However, there is a lack of academic consensus on the elements determining a superior business model and the underlying factors influencing the degree of business model innovation in inclusive business ^{(Sánchez & Ricart, 2010)}. Thus, we aim to contribute to the current debate on business model innovation from a perspective that permits us to systematically observe the set of interactions performed in the firm’s business activities. This aspect is especially critical in inclusive business because the firm’s ecosystem can have a decisive influence on the business model configuration ^{(Sánchez & Ricart, 2010)}. Hence, we begin by reviewing the inclusive business model to determine the indicators and factors that are involved, reasoning out their applicability to the Mexican context. Finally, we discuss the main implications in the interaction of such factors to propose a final conceptual model of inclusive business for the micro-enterprises. The IB is interesting for companies because it can offer new opportunities for innovation, growth, and competitiveness at the same time as positive social and development impact. It is interesting for bilateral and multilateral donors, foundations, governments, and civil society organizations because it has the potential to drive development impact in self-sustaining, self-multiplying ways that do not require continuous infusions of grant funding. And it is interesting for the poor because it brings greater access, choice, and opportunity in their lives and future ^{(Jenkins et al. 2010)}.

4.5. Inclusive Business definition

An IB model is a commercially viable model that benefits micro-enterprises by including them in a company’s value chain on the demand side as clients and consumers, and/or on the supply side as producers, entrepreneurs or employees in a sustainable way ^{(UNDP, 2008)}. The ^{SNV-WBCSD (2011)} defines the IB, as: “…an economically profitable, environmentally and socially responsible entrepreneurial initiative, which integrates low-income communities in its value chain for the mutual benefit of both the company and the community. It seeks to improve the livelihoods of low-income populations while increasing returns to the company. An IB offers the company an opportunity for sustainable development and expansion of its market segment to include low-income populations. IB offers poor families a chance to take the opportunities offered by the market and profit from the dynamic nature of the business sector. It involves a relationship between a company (anchor company) and groups of local entrepreneurs or consumers and strives to maximize both the social and economic value of the opportunity. This is where IB differs from other schemes such as philanthropy, which tends to be separate from business activities and does not necessarily seek to generate financial returns or create long-term economic sustainability”. The IB link the companies with all in two ways: 1). By inclusion of groups of micro-enterprises segment within the company value chain as suppliers of raw materials or services or distributors or business partners. Such an inclusion allows the generation of additional employment, incomes, and it accelerates the transfer of capacities to the micro-enterprises. By integrating micro-enterprises populations in the value chain of the companies as consumers by making it possible for them to access the services or products they need at prices they can afford ^{(SNV-WBCSD, 2011)}. Hence, there are several benefits for each part (company-micro-enterprise) based on different approaches. See Table 2.

As you can see, IB has several opportunities to promote development led by the private sector ^{(SNV-FORD-OMIN, 2015)}. However, many businesses are not taking advantage of them because market conditions surrounding the micro-enterprises can make doing business risky, difficult, and expensive. Where poverty prevails, the foundations for functional markets are often lacking, excluding the poor from meaningful participation and deterring companies from doing business with them. ^{UNPD (2008)}, identifies five major market constraints and successful strategies to overcome them (see Table 3).

Poverty reduction is a pending issue in Latin American societies. The concept of IB has been formulated to describe and systematize a set of experiences arisen in the 2000. It is aimed at generating social inclusion through the creation of micro-enterprises as associations of poor people. These micro-enterprises are incorporated into the business value chain, establishing the “need for new conceptual frames regarding poverty is as urgent today as ever” and its impact on poverty alleviation ^{(Lateh et al., 2017}; ^{Austin & Chu, 2006)}. Traditionally, poverty has been conceptualized as a “lack of resources materials” ^{(Gutiérrez & Lobo, 2006)}. Consequently, the strategies designed to face it they have based on actions aimed at providing those resources to the poor or to develop skills so that they can get them on their own ^{(Gutiérrez & Lobo, 2006)}. The first type of action, predominantly, by the way, has materialized through various forms of assistance, which currently find their maximum expression in the social plans that are being massively implemented in several Latin American countries. Among the actions of the second type stand out the great training programs for labor insertion, technical assistance aimed at the creation of micro-enterprises or the development of microcredits ^{(Licandro, 2013)}. In the late 1990s, poverty began to be conceived as the inability to control one’s circumstances, rather than as the lack of material resources. This way of defining it serves to identify the main factors that generate it. In addition to the lack of material resources, the poor have serious difficulties to 1) organize and carry out actions collective 2) network and 3) interact in the public spaces of negotiation, in particular with government institutions ^{(Gutiérrez & Lobo, 2006)}. It is about a socio-cultural approach, complementary to the economic, in other words, “social inclusion is not possible without economic inclusion”. Hence, the IB consists in ^{(Licandro, 2013)}: 1) social inclusion requires the transformation of the poor into economic agents integrated within the market economy; 2) becoming integrated economic agents implies that these segments have the possibility of accessing goods and services that improve their quality of life (visualize the poor as consumers) or incorporate to existing production and marketing systems (view the poor as employees or entrepreneurs); 3) to turn them into economic agents integrated, it is necessary to lift the socio-cultural restrictions that limit the ability of these segments to act within the parameters of the market economy (traditional forms of production, work resistance associative, low-quality standards, etc.) and 4) participation of the private sector is essential as the engine of this inclusion process, either through the development of goods and services aimed at improving the quality of life of the poor, as through the incorporation of micro-enterprises to their value chains: suppliers, actors that add value to their products, agents within the distribution chain, etc. The concept of IB has been proposed to designate various experiences of social inclusion, based on the incorporation of BOP people to economic activity by launching a business, starring groups of these segments. These ventures are integrated into productive chains in which they can play various roles: suppliers, agents that add value or commercial agents (sellers and dealers). According to ^{Iturbide & Quintal (2020)}, in Latin America, the IB is aimed mostly in food.

4.6. Our Inclusive Business Scope

It is often argued that the success at low income markets (BOP) requires innovative and inclusive business models. However, research findings on this have been quite descriptive and generic ^{(Danse et al., 2020)}. ^{Kaminski (et al., 2020)} made a study based on 36 papers about a review of IB models. The scope to which these models helped poor actors overcome specific barriers was evaluated, focusing on how they may ensure or be a risk to inclusiveness through the relations and upgrading opportunities evident in their make-up. The majority of the models focused on economic upgrading over social upgrading. Providing opportunities for the latter is key to achieving the inclusive objectives of IB models. They conclude that greater horizontal coordination among actors can create further economic upgrading opportunities under vertical coordination with other nodes upstream and downstream in a value chain.

As far as social value is concerned, there are experiences that have included the Bottom-of-Pyramid approach, involving low-income customers and/or low-income business partners. However, persists a need to apply multiple-criteria approaches to map, for instance, several kinds of models, such as ecological inclusive business models, and structure their main features in terms of sustainable development ^{(Norese et al., 2020)}.

Hence, in the fruit sector context, our research’s scope is to design an IB conceptual model for micro-enterprises that gather all horizontal and vertical coordination nodes and several multi-criteria approaches to achieve rather social benefits than economic benefits.

Therefore, our problem is described in to achieve the following general objective (GO): “To determine indicators proposed for an IB model, able to be incorporated in the fruit sector micro-enterprises of Mexico”.

To solve this, it is necessary to propose an IB conceptual construct based on the latest business models related to fruit sector micro-enterprises. To characterize and describe the final model based on qualitative tools, such as a Delphi Panel method and the Analytic Hierarchy Process (AHP) to business’ models’ experts, to achieve the following specific objectives (SO):

SO1: “The definitions and main indicators mentioned in the literature review”

SO2: “A final design of the IB questionnaire”

SO3: “To determine an accumulative effect of the new groups of variables in the model”.

4.7. Searching for the IB conceptual model

To understand better the indicators by author involved in the IB definitions, we gathered in the following Table 4.

5.1. Searching for the final conceptual model of IB

At this moment, it was started the quantitative analysis to prove the suggested indicators groups as a result of Table 5. This quantitative stage involved the application of a questionnaire asking for the indicators and groups perceived for 60 IB fruit sector experts (30 consultants and 30 micro-enterprises leaders). To accomplish it, it was applied an Exploratory Factor Analysis (EFA) based on Rotation Method: VARIMAX with Extraction Method: Principal Component Analysis. The result was the grouping of the indicators as support of the IB theoretical framework as a final approach, detailed as follows:

5.2. Reliability and Validity test

According to the methodology, the Cronbach’s Alpha reliability test result, using SPSS 20 IBM software, is at an adequate level ^{(Hair et al., 2019)}, shown in Table 6.

The validity test is based on the content shown in the theoretical framework. To measure the validity is necessary to apply a Confirmatory Factor Analysis (CFA) to determine: convergent, discriminant and nomological validities ^{(Hair et al. 2019}; ^{Mejía-Trejo, 2019a)}. These measurements’ purposes are beyond the scope of this article.

5.3. Exploratory Factor Analysis (EFA)

We proceeded to apply the EFA, as a variable reduction tool to determine the variance contribution of each component, variable or (indicator) and hence, demonstrate how these variables (or indicators) are reduced. The use of EFA is looking for the variability in one common variable to another variable. The aforementioned means, that they are linked by an underlying variable. To achieve it, the IBM SPSS 25 assumes (in a principal component analysis mode) that 100% of the variance of each variable is in common variance, so gives each variable a commonality of 1.000. However, when they have extracted the variables, it works out how much of the variability of each variable really can be explained by the extracted elements, and gives an updated value of communality ^{(Hinton et al., 2004, p. 349}; ^{Mejía-Trejo, 2019c}; ^{Mejía-Trejo, 2019d)}.

Because of the 66 variables, communalities analyses show values in the range of 0.40 <0.91; we decided that the variables meet acceptable explanation levels. Because of this, the researchers decided to omit the communalities table and proceed with the analysis of total variance explained and rotated component matrix analysis ^{(Hair et al. 2019, 156)}. Using our criterion of selecting eigenvalues over 1, we can see from the highlighted numbers in the Total Variance Explained table with a group of components, variables (or indicators) have been produced that have eigenvalues greater than this amount ^{(Hinton et al. 2004., p.350}; ^{Mejía-Trejo, 2019c}; ^{Mejía-Trejo, 2019d)}. Finally, we obtained 12 underlying factor groups using the ^{Hair (et al.,2019)} criteria. See Table 7.

The % of the “Variance” column shows how much variance each factor can explain. The “Cumulative % column” shows the amount of variance accounted by each consecutive variable added together. From our example, we can see that factor 1 has an eigenvalue of 15.105, which accounts for “22.886% of the variance”. Our criterion for factor selection is eigenvalues greater than 1, so we, therefore have twelve factors that can explain a cumulative 92.781% of the variance in the data. You can see that the “Extraction Sums of Squared Loadings” values are the same as the “Initial Eigenvalues”, however only the twelve indicators (factors) that have been extracted are shown ^{(Mejía-Trejo, Juan 2019c}; ^{Mejía-Trejo, 2019d)}.

One final result is the rotation method that changes the eigenvalues and variances explained by each factor but keeps the total variance the same. The extracted factors are shown in the “Rotation Sums of Squared Loadings” columns. The rotation has shown that different variables load onto different factors. The factor loading minimum level is from 0.3, and it is selected to be grouped (Hair et al., 2014). See Table 8 the shading rectangles.

We can now look at the highest values of the variables loading onto each factor and choose suitable names for each one of the twelve factors. Hence, each one of the indicators were weighed and compared obtaining the first list of them as a second approach. See Table 9.

5.4. The final ex-post or Post hoc IB conceptual model

Hence, the final ex-post or post hoc reduced empirical model comprises seven underlying variables and 66 items that point out to IB factor is showed in Figure 2.

Source: own.

Figure 2 The final ex-post or Post hoc IB conceptual model based on EFA. Notes: IB. Inclusive Business Model; AWN. Awareness of Needs; MKS Marketing Strategy; SEP. Social Entrepreneurship; SEV. Social Environment; RFR. Regulatory Framework; NPD. New Product Development; ATF. Access to Finance; KPI. Key Performance Indicators. 

6.1. Theoretical Implications

Hence, the final ex-post IB conceptual model variables, are explained as follows:

6.2. Practical implications and limitations

This paper aims to propose a conceptual model of inclusive business. It is designed based on experts (30 consultants, 30 micro-enterprises leaders) of the fruit sector micro-enterprises in Mexico experts. It is an attempt that includes all the actors that represent a chance for business, government, and civil society to join together in a common cause. According to ^{Prahalad & Hart (2008)}, and based on the model, we are pursuing strategies that dissolve the conflict between proponents of free trade and global capitalism on one hand and environmental and social sustainability. This model awaits to be complemented in future studies having several limitations about the coordination of the fruit sectors, the budget, the legal identification of the participants, etc.