This is the page where you can put your Bottom of Pyramid stories across the world. It is interesting to learn how people are doing different things to serve the rural poor.
Monitor is a management consulting and merchant banking group with over 1000 professionals in 22 offices across the globe. It was conceived by legendary Professor Michael Porter and a group of his colleagues at the Harvard Business School. The goal of Monitor group has been to provide facilities and services that sustain and enhance the performance of their client, which can be any of the three sectors, the private, public and non-profit sector. In 2006, Monitor began its Inclusive Markets Practice in India to develop market based solutions that benefits the B60 (Bottom 60% of the pyramid) segment. Their projects have either engaged the B60 in the form of customers or have involved them as producers/suppliers in the value creation process. For the past four years their main focus has been on developing the housing market that provides good quality houses for the lower-income segment i.e. between Rs. 7,000 – 25,000 in urban cities of India.
The Beginning
Rural exodus has saturated the urban areas and has increases the population of these areas beyond what they can support. Because of the aforesaid phenomena it has become very difficult for the low income people to find good quality houses at affordable cost in India’s cities. Following were the highlights of the study conducted by Monitor Inclusive Markets, in 2006-7, for National Housing Bank: • The cheapest houses costs were so high that they can be borne by only the top 15% of the urban population. • The next 30% income seg¬ment generally resided in low income neighborhood and slums which has poorly constructed houses with deplorable sanitary conditions (shared toilets, bad drainage and water-logging) and lacking basic neighborhood amenities (few common spaces or gardens, unsafe alleys, open gutters). Rents for these tiny houses were very high and were dependent on whims and fancies of the landlord. They aspired to live in and could afford to buy houses between 250-400 square feet in suburban areas at current market prices. Despite the huge demand from low income segment, the supply of houses was very low and with near zero access to mortgages from traditional financial institutions. • Because of the economic slowdown and lucrative low income housing (LIH) market, estimated to be $238 billion, many developers started looking for alternate business models to support the huge demand. In 2010 there were more than 25 developers across 7 states building houses for low income segment.
Novartis India Limited is the first pharmaceutical MNC that decided to expand its operations to the rural market. They started a rural healthcare initiative called Arogya Parivar Yogna (AP) targeting the bottom of the pyramid (BoP) in July 2007.
This initiative targets to address issues pertaining to the diseases commonly found in the rural areas like TB, skin diseases, gynaecological and pregnancy related problem, gastrointestinal diseases and paediatric problems.
Arogya Parivar meaning ‘Happy Family’ strikes a chord instantly with the villagers. Over the years AP has established itself in 11 states which cover more than 200 districts. As the hinterlands of the country are not exposed to the usual communication media, one-to-one interaction is the band public events are the best way to reach the masses.
The problem with rural healthcare is not only about the availability of the medical care but it is also about the affordability of it. Novartis didn’t alter the pricing of the drugs instead they have launched in smaller packages (small SKU). With their 4A initiative they made sure proper promotion and channelling of the project.The objective of Arogya Parivar Yogna is listed out through the 4A approach -
Awareness,Adaptability,Accessibility and Affordability
They set up teams that talk to doctors, village NGO’s and SHG’s, suppliers formed a team and set up health camps which lead to patient linkages which they can transform into ongoing relationship.
For the promotion of the event they used mediums like audio/video – video based on real life events, distributing free goodies like T-Shirt, bags, caps etc. after the community meetings. And the results were terrific, with a very short span of time they have reached around 20 million villagers and by 2011 they touched lives of 50 million villagers and projects to reach 350 million by next 10 years.
As said by Anuj Pasrija, Head of Social Business-Novartis, Public Private Partnership need to make some investment in rural sector for the development of health alliances which in turn is the development of the market i.e. market creation for rural hence penetrating the rural sector. This leads to a win-win situation for everyone.
LifeSpring Hospitals, a 50-50 joint venture between HLL Hifecare and Acumen Fund (a global venture philanthropy fund), has proved to be a boon for the bottom of the pyramid customers in the field of maternal care. It has a total of 9 facilities (all in Andhra Pradesh) with 6 being in Hyderabad. LifeSpring follows a model of 20-25 bed hospitals and specialize in areas like pre-natal care, deliveries and post natal care. These hospitals are strategically located in densely populated low income neighborhoods to specifically cater to groups which cannot afford expensive private hospitals. The customer base of LifeSpring is predominantly the bottom 60% of the Indian population with an average monthly income of Rs 3000 to Rs 7000.
LifeSpring has been able to achieve a high success rate in its target audience by significantly reducing costs by standardization and specialization. Specialization helps them to reduce a whole lot of expenses while at the same time maintaining acceptable levels of quality. They operate the hospitals at the most basic level to keep costs low since their patients pay on their own and do not rely on insurance.
Each hospital is equipped with private consultation rooms, labor ward, an operating theater, diagnostic services and a pharmacy. They offer a clean and hygienic environment for the baby and mother with transparent pricing. LifeSpring also has a special way of advertising themselves through the “community outreach programme”. This programme is aimed at educating the nearby communities about women’s health. Representatives from the hospitals go door-to-door to educate pregnant women and other key decision makers about maternity issues and also distribute discount vouchers. They also encourage follow-up visits to the LifeSpring doctors thus ensuring good post-natal care.
LifeSpring follows standard clinical and operational protocol and engages in rigorous processes to maintain quality and safety. LifeSpring has been able to create an impact in the very first year of its operation with 2,000 deliveries and almost 23,000 outpatient visits. It has been a success which is demonstrated by the 43% market share held by its flagship hospital located on the outskirts of Hyderabad. As of July 2011, more than 12,000 babies were delivered across their chain of hospitals.
VOLTIC GHANA Rural Marketing - Assignment 1 - Submitted By: Namrata Singh – FT12139 Shoib Rehman – FT12101 Water issues in Ghana have always been a lingering problem. There were many companies across the countries that wanted to take advantage of this lingering problem. The solution was not simple. It required an altogether different treatment of the problem to achieve desired results. Water is an entity that was to be the basic right to every human and it becomes absolutely essential to make sure it is available at affordable costs if not free to all the people concerned. Be it the BOP or the rich urban customer. In 2000’s the problem with Voltic Ghana was no different from those faced by the beverage companies in the country. “How to make sure everybody gets water. How to sell water to the BOP market”? The problem was that there were already hundreds of sellers and vendors who are already selling water in sachets at very minimum prices. The BOP water market was considered to be a high volume market, but it had very less value. The potential at the BOP water market was quite significant but the main issues targeting the BOP market would be 1. Low prices 2. Switching brand loyalty Voltic during this time was known for its high value business. Voltic Ghana sold water in a half -liter bottles at $0.70 to all the hotels, travelers, tourists and some of the upper high income Ghana population. Rethinking strategy: For Voltic to tap the high volume BOP market, it had to rethink its overall business strategy altogether. It had to do a lot with designing the overall supply chain of distribution and the logistics that were associated with the traditional model. This was because Voltic realized that transporting water to the corresponding markets from its centralized facility was very costly. In other words, Voltic was looking at a high transportation cost per liter because of the sachets that it was thinking about transferring it to the BOP market. Lack of good infrastructure and transport facilities only alleviated the problem further. So Voltic decided to decentralize its overall bottling facility so that water can be brought closer to the market.
By Revathi B Saurabh Srivastava Bolivian Water Problem Bolivia is located in South America. In the year 2000 there was a social conflict in the city of Cochabamba that brought a grinding halt to the privatization process of the basic services in Bolivia. Cochabamba’s population hovers around 500,000 residents and the city is blessed with a moderate climate, colonial buildings and houses several informal street bazaars. In Bolivia water resources form the backbone of the peasants and other groups. Therefore when an attempt to privatize and commoditize water was made , it went against the concept of social management of water that the country was accustomed to. Smaller suburban holes of drinking water were exploited in order to establish the monopoly of Aguas del Tunari-Becthel. Bechtel is an American Water Company. The two multinationals had a vested interest in the drinking water of Cochabamba. Political leaders had a stake in these companies. The contract to privatize was sealed in 1999. An attempt to raise the prices of water was made. It was as exponential as 300%. People and Peasant communities took to roads and a full blown civil war soon emerged. These communities wanted to preserve their water and did not have the monetary strength to pay for water that was anyway rightfully theirs. Soon a coalition of like minded residents that opposed the taking over by the multinationals formed and they called their entity "Coordinadora de Defensa del Agua y de la Vida de Cochabamba". The war for water resulted in several injuries and infrastructural damage. The dollar loss was pegged at $150 million dollars. The organization eventually achieved its objective in 2000 and the water law was modified substantially in favor of the people. Following their victory a public drinking water company called SEMAPA was formed in Cochabamba. Ever since the victory of the Water War by the people of Cochabamba , the American Transnational, Bechtel Company has been trying to retrieve a damage compensation of 25 million dollars from Bolivia despite investing far lesser in the project. Since the parties that makeup the government in Bolivia have a vested interest, they delay the approval of the bylaws for any new water law that kills their interests in privatization. They do this by tarnishing the public water company SEMAPA’s attempts to manage water, killing the spirit of the social protests and refuse to open trials against the protesting leaders. The water war in Bolivia has taken on a new flavor. Political parties are trying to export water from the Misicuni River, to Chilean Mining companies. If the government and the multinationals achieve this objective of exporting water their attempts at privatization would successful. The Scenario Now "Coordinadora" is therefore trying to address the very root cause and fighting for a Democratic Assembly, so that people can democratically decide without having political parties who have vested interests represent them on water issues.
Global Green was set-up in the year 1992 in Bangalore as a JV between India’s Thapar group & a European company. In 1996, the Thapar acquired 100% stake, & renamed as The Global Green Company Limited. It has been the pioneer and leader of the pickled cucumber business out of India. The various strategic acquisitions like VST-Natural Products Ltd., Intergarden N.V. or Puszta Konzerv Kft have helped the organization become an established player various categories like pickled cucumber to condiments and are in line with their current portfolio.
As a horticulture product company in India it grows, manufactures , distributes & sells pickled cucumbers (gherkins, cornichons, pickles and relish), sweet-corn, silver skin onions, peppers (jalapeño and paprika), cherries, capers and mixed vegetables. The company’s also offers relish, a mix of chopped and diced pieces of vegetables, such as cucumbers, onion, tomatoes, jalapenos, cabbage, and red chilies; and spices, including ground & crushed red peppers, turmeric powder and whole, and spice. It is a private label supplier to some global food retailers in addition to exporting products under its own brand name Eden Garden. In India, the Company retails under the brand name Tify.
The company aims to empower Indian farmers to produce internationally acceptable crops along with other products. The basic concentration is on small and marginal farmers and is done by educating the farmers about efficient cultivation techniques (particularly gherkins) and modernizing the process with the help of technology by developing an excellent package of agricultural practices as part of its contract farming techniques. It is ISO 9002 certified for excellence in processing &marketing of preserved foods & vegetables. It also focuses on stepping-up productivity, making assured supply of inputs, constant improvement of production through rigorous research and development techniques. The company’s business model is evident at various levels i.e. agricultural inputs, cultivation, harvesting, processing, packaging, delivery & customer care. Contract farming in gherkins, a non-traditional crop grown mainly for the export market, is very successful in India. Gherkins are a labor-intensive crop (250-300 labor days per hectare of crop) and lead to more employment opportunities and reduced labor migration by providing wage labor during off season.
Global Green works with 31,000 farmers in Karnataka, Tamil Nadu and Andhra Pradesh. The company has been contracting with farmers to supply processed gherkins in the global market. It has tied up with about 10,000 farmers in Karnataka, Andhra Pradesh, and Tamil Nadu. It has two processing plants in Zaheerabad in Andhra Pradesh (50 tons/day capacity) and at Bangalore in Karnataka (30 tons/day capacity). Farmers are offered different prices depending on the quality of the produce. In order to sustain the contracting relation, the company also purchases produce that is not fit for export and sell it in the domestic market. Apart from buying the produce, the company provides technical support and agricultural inputs (seed, fertilizer, and pesticides) on credit to farmers, with the cost adjusted in the final purchase transaction.
Freeplay Energy Ltd. manufactures and distributes portable electrical/electronic products like lights and radios. They are either powered by solar energy or by hand cranked generators that work to recharge the batteries. Their aim is to create an international market for self sufficient energy products. They hope to promote education and information access in emerging and developing nations.
The Radio • As big as a paperback book i.e. about 7” long by 4” tall • It has 3 different energy supply facilities o A carbon steel spring which is the hand crank o Solar panel o NiCd rechargeable battery which can be powered by either the above two ways or directly using electricity • It has AM and FM radio • Built in flashlight • Headphone plug and speakers • Frequency Range o FM - 88 to 108 MHz o AM - 520 to 1700 KHz
This radio is creating a rage in Africa. While Freeplay’s aim is to make money, it has also established a non-profit foundation to bring the radios to the people who will be able to benefit from them the most in rural Africa. This technology has huge potential. What is right now being used to run radios in dusty villages can be used to turn the lights back on during blackouts. In times of emergencies, this can give preparedness.
WIRES – THE WOMEN’S INFORMATION RESOURCE ELECTRONIC SERVICE
Emancipation of women has been the buzz word. While there are many organizations that claim to work towards the empowerment of women, there are only a few that have done noticeable work in this arena. In this context, we discuss a program was in 1999 by the Council for the Economic Empowerment for Women of Africa (CEEWA) in Uganda and is called the Women's Information Resource Electronic Service (WIRES) initiative.
Many women in Uganda are the primary bread-earners of the family who engage in agricultural work or run small businesses. Men walk away with all the advantages of credits & business transactions despite the women working to earn the living. It was then that the CEEWA decided to reach out and lend a helping hand to this class of women. This led to the emergence of the WIRES program.
What CEEWA strove to achieve through the WIRES initiative is a means to facilitate the growth of women entrepreneurs and organizations led by women who have the ability to use Information and Communications Technologies (ICTs) for economic and social development.
Their primary focus was on enhancing the skill sets of their women entrepreneurs to utilize the services of ICTs that set up telecentres in various areas. The WIRES program also emboldens the use of a central information system on the internet. With the muscle of technology provided by databases, which mostly contain information stored & used for analysis and market research, the women can now obtain information necessary to run their businesses. This information encompasses information on the market structure, the prices of various tradable items, tips on how to run their businesses more effectively & best practices in various fields, especially agriculture since that happens to be a large source of income in rural Uganda. The vast amount of information also includes animal husbandry, information on other women’s groups & trade. Thus, by bringing information technology to the aid of women empowerment, WIRES is now a success model that has made it one of a kind.
With the success of this model, similar programs have been launched in 6 other places. Although the government and various other NGOs are trying their best to reach out the needy and help them in every way possible, there is still more that could be done.
Background Established in the year 1980 (by Robert Enthoven), Hollard Group is the largest privately owned insurer in South Africa. The company deals in two insurance licenses: short term and life Life Insurance business at the BOP level is barely considered a successful model. This is due to the fact that the demand for Insurance in this market is low whereas the distribution costs are high.
An old age tradition in Africa is to hold expensive and elaborate funerals; however the costs for these funerals were highly burdensome on poor families. Hence for the provision of funeral coverage services, people often relied on informal burial societies. So the demand for affordable funeral insurance was immense however it was being hit due to the unattractive schemes under existing insurance models. Thus the market was highly under supplied.
This gave a room for opportunity for Hollard group who in 2006 decided to tap this large potential market in joint venture partnership with PEP (a high volume, low volume popular clothing retail store with 1100+ outlets across South Africa) through an innovative business model. The partnership contributed significantly to the success as PEP had a well established distribution network as well as an existing customer base whereas Hollard had expertise in underwriting and product design along with administrative support. As part of the deal, PEP is entitled to 10% commission per sale (on sales of 5 funeral products by Hollard Life Insurance Company) as well as generated insurance profits.
Product Offerings The product offerings of Hollard are primarily targeted at families having monthly incomes ranging from $350 - $600. These offering have gone through multiple phases of tailoring to suit the needs of the target segment.
Yeshasvini is a health insurance scheme launched in the year 2002 which the goal of providing health insurance coverage to the poor and the working class who didn’t have the capacity to pay for simple medical treatments. This scheme was the brain child of Dr. Devi Prasad Shetty the founder of Narayana Hrudayalaya. The entire scheme of conceptualized by Narayana Hrudalaya. After Intense research, their team found that the average occupancy rate of hospital beds was 35 % & most of the operation theatres across hospitals in Karnataka were underutilized. They also found rural patients don’t go to hospital for most of the common illness. The root cause for all these problems were identified as the lack of capacity among the poor who could not afford the medical treatment. The study concluded that by providing an insurance scheme with low premium and covering all the costs of hospitalization, surgery and other costs associated with it for the rural poor could solve the problem. Also Dr Shetty felt that by covering large number of people under this scheme he would be able to mitigate the basic financing problem which was a major challenge in similar schemes in the past. But there were other challenges that this insurance scheme had to overcome which otherwise could dent the entire aim of this scheme. Scope of Coverage For the insurance scheme to be successful the scheme had to find ways to gather all the dispersed farmers and informal workers and ensure everybody became a member of this scheme. This was achieved by a three step action plan. • Communicate the scheme to the farmer • Creating infrastructure to Issue of identity cards for the policy holders & • Collect insurance premiums Restricted benefits problem Rupees 90 was charged as a premium per person per year. This was based on a research which concluded that rural poor could afford an annual premium ranging anywhere between 75-85 Rupees. Also the government for political reasons provided a subsidy to this scheme where the government accepted to pay one third of the premium amount for the enrolled members (Rs 30 per person would be paid by the government). Creation of Health care infrastructure For the successful implementation of the scheme both private as well a government hospitals were included in the network of hospitals that were covered under this scheme. Initially 30-40 hospitals agreed to participate but after seeing the success of the scheme and due to the rising number of patients grew the number of hospitals that participated under the scheme increased. By 2004, 92 hospitals have joined in this scheme to provide medical care to members of Yeshasvini and by end of 2004, this number grew by 118 A trust was set up to administer the insurance scheme. The Yeshasvini trust has 11 board members from the medical community and the Department of Cooperation. Based on the mandate of Insurance Development Regulatory Authority (IRDA) the trust appointed a third party administrator Family Health Plan Limited (FHPL), which is a division of Apollo hospital. The scheme has been successful in providing coverage for patients from the rural population who could not afford these lifesaving medical treatments. But a major drawback of the scheme is that it does not cover all health related issues, but like diagnostic tests, and medicines which is still heavy burden on poor rural families. Another major problem is most of the subscribers were forced to join the scheme. The health insurance scheme’s long term can only be successful only when the individuals freely chose to join than being forced to join the scheme. Also there is a lack of knowledge among the policy holders on what is exactly are covered by the policy. Unless the rural population is properly educated this would still be a problem and may threaten the success of such a scheme in long term.
Hariharn Ganeshan – FT12430 Raghavendra B – FT12243
Monitor's Housing Project
ReplyDeleteIntroduction
Monitor is a management consulting and merchant banking group with over 1000 professionals in 22 offices across the globe. It was conceived by legendary Professor Michael Porter and a group of his colleagues at the Harvard Business School. The goal of Monitor group has been to provide facilities and services that sustain and enhance the performance of their client, which can be any of the three sectors, the private, public and non-profit sector.
In 2006, Monitor began its Inclusive Markets Practice in India to develop market based solutions that benefits the B60 (Bottom 60% of the pyramid) segment. Their projects have either engaged the B60 in the form of customers or have involved them as producers/suppliers in the value creation process. For the past four years their main focus has been on developing the housing market that provides good quality houses for the lower-income segment i.e. between Rs. 7,000 – 25,000 in urban cities of India.
The Beginning
Rural exodus has saturated the urban areas and has increases the population of these areas beyond what they can support. Because of the aforesaid phenomena it has become very difficult for the low income people to find good quality houses at affordable cost in India’s cities. Following were the highlights of the study conducted by Monitor Inclusive Markets, in 2006-7, for National Housing Bank:
• The cheapest houses costs were so high that they can be borne by only the top 15% of the urban population.
• The next 30% income seg¬ment generally resided in low income neighborhood and slums which has poorly constructed houses with deplorable sanitary conditions (shared toilets, bad drainage and water-logging) and lacking basic neighborhood amenities (few common spaces or gardens, unsafe alleys, open gutters). Rents for these tiny houses were very high and were dependent on whims and fancies of the landlord. They aspired to live in and could afford to buy houses between 250-400 square feet in suburban areas at current market prices. Despite the huge demand from low income segment, the supply of houses was very low and with near zero access to mortgages from traditional financial institutions.
• Because of the economic slowdown and lucrative low income housing (LIH) market, estimated to be $238 billion, many developers started looking for alternate business models to support the huge demand. In 2010 there were more than 25 developers across 7 states building houses for low income segment.
Arogaya Parivar Yogna – Novartis India Ltd
ReplyDeleteNovartis India Limited is the first pharmaceutical MNC that decided to expand its operations to the rural market. They started a rural healthcare initiative called Arogya Parivar Yogna (AP) targeting the bottom of the pyramid (BoP) in July 2007.
This initiative targets to address issues pertaining to the diseases commonly found in the rural areas like TB, skin diseases, gynaecological and pregnancy related problem, gastrointestinal diseases and paediatric problems.
Arogya Parivar meaning ‘Happy Family’ strikes a chord instantly with the villagers. Over the years AP has established itself in 11 states which cover more than 200 districts. As the hinterlands of the country are not exposed to the usual communication media, one-to-one interaction is the band public events are the best way to reach the masses.
The problem with rural healthcare is not only about the availability of the medical care but it is also about the affordability of it. Novartis didn’t alter the pricing of the drugs instead they have launched in smaller packages (small SKU). With their 4A initiative they made sure proper promotion and channelling of the project.The objective of Arogya Parivar Yogna is listed out through the 4A approach -
Awareness,Adaptability,Accessibility and Affordability
They set up teams that talk to doctors, village NGO’s and SHG’s, suppliers formed a team and set up health camps which lead to patient linkages which they can transform into ongoing relationship.
For the promotion of the event they used mediums like audio/video – video based on real life events, distributing free goodies like T-Shirt, bags, caps etc. after the community meetings. And the results were terrific, with a very short span of time they have reached around 20 million villagers and by 2011 they touched lives of 50 million villagers and projects to reach 350 million by next 10 years.
As said by Anuj Pasrija, Head of Social Business-Novartis, Public Private Partnership need to make some investment in rural sector for the development of health alliances which in turn is the development of the market i.e. market creation for rural hence penetrating the rural sector. This leads to a win-win situation for everyone.
LIFESPRING HOSPITALS
ReplyDeleteLifeSpring Hospitals, a 50-50 joint venture between HLL Hifecare and Acumen Fund (a global venture philanthropy fund), has proved to be a boon for the bottom of the pyramid customers in the field of maternal care. It has a total of 9 facilities (all in Andhra Pradesh) with 6 being in Hyderabad. LifeSpring follows a model of 20-25 bed hospitals and specialize in areas like pre-natal care, deliveries and post natal care. These hospitals are strategically located in densely populated low income neighborhoods to specifically cater to groups which cannot afford expensive private hospitals. The customer base of LifeSpring is predominantly the bottom 60% of the Indian population with an average monthly income of Rs 3000 to Rs 7000.
LifeSpring has been able to achieve a high success rate in its target audience by significantly reducing costs by standardization and specialization. Specialization helps them to reduce a whole lot of expenses while at the same time maintaining acceptable levels of quality. They operate the hospitals at the most basic level to keep costs low since their patients pay on their own and do not rely on insurance.
Each hospital is equipped with private consultation rooms, labor ward, an operating theater, diagnostic services and a pharmacy. They offer a clean and hygienic environment for the baby and mother with transparent pricing. LifeSpring also has a special way of advertising themselves through the “community outreach programme”. This programme is aimed at educating the nearby communities about women’s health. Representatives from the hospitals go door-to-door to educate pregnant women and other key decision makers about maternity issues and also distribute discount vouchers. They also encourage follow-up visits to the LifeSpring doctors thus ensuring good post-natal care.
LifeSpring follows standard clinical and operational protocol and engages in rigorous processes to maintain quality and safety. LifeSpring has been able to create an impact in the very first year of its operation with 2,000 deliveries and almost 23,000 outpatient visits. It has been a success which is demonstrated by the 43% market share held by its flagship hospital located on the outskirts of Hyderabad. As of July 2011, more than 12,000 babies were delivered across their chain of hospitals.
VOLTIC GHANA
ReplyDeleteRural Marketing - Assignment 1 - Submitted By:
Namrata Singh – FT12139
Shoib Rehman – FT12101
Water issues in Ghana have always been a lingering problem. There were many companies across the countries that wanted to take advantage of this lingering problem. The solution was not simple. It required an altogether different treatment of the problem to achieve desired results. Water is an entity that was to be the basic right to every human and it becomes absolutely essential to make sure it is available at affordable costs if not free to all the people concerned. Be it the BOP or the rich urban customer. In 2000’s the problem with Voltic Ghana was no different from those faced by the beverage companies in the country. “How to make sure everybody gets water. How to sell water to the BOP market”? The problem was that there were already hundreds of sellers and vendors who are already selling water in sachets at very minimum prices.
The BOP water market was considered to be a high volume market, but it had very less value. The potential at the BOP water market was quite significant but the main issues targeting the BOP market would be
1. Low prices
2. Switching brand loyalty
Voltic during this time was known for its high value business. Voltic Ghana sold water in a half -liter bottles at $0.70 to all the hotels, travelers, tourists and some of the upper high income Ghana population.
Rethinking strategy:
For Voltic to tap the high volume BOP market, it had to rethink its overall business strategy altogether. It had to do a lot with designing the overall supply chain of distribution and the logistics that were associated with the traditional model. This was because Voltic realized that transporting water to the corresponding markets from its centralized facility was very costly. In other words, Voltic was looking at a high transportation cost per liter because of the sachets that it was thinking about transferring it to the BOP market. Lack of good infrastructure and transport facilities only alleviated the problem further. So Voltic decided to decentralize its overall bottling facility so that water can be brought closer to the market.
By
ReplyDeleteRevathi B
Saurabh Srivastava
Bolivian Water Problem
Bolivia is located in South America. In the year 2000 there was a social conflict in the city of Cochabamba that brought a grinding halt to the privatization process of the basic services in Bolivia. Cochabamba’s population hovers around 500,000 residents and the city is blessed with a moderate climate, colonial buildings and houses several informal street bazaars.
In Bolivia water resources form the backbone of the peasants and other groups. Therefore when an attempt to privatize and commoditize water was made , it went against the concept of social management of water that the country was accustomed to.
Smaller suburban holes of drinking water were exploited in order to establish the monopoly of Aguas del Tunari-Becthel. Bechtel is an American Water Company. The two multinationals had a vested interest in the drinking water of Cochabamba. Political leaders had a stake in these companies. The contract to privatize was sealed in 1999. An attempt to raise the prices of water was made. It was as exponential as 300%.
People and Peasant communities took to roads and a full blown civil war soon emerged. These communities wanted to preserve their water and did not have the monetary strength to pay for water that was anyway rightfully theirs. Soon a coalition of like minded residents that opposed the taking over by the multinationals formed and they called their entity "Coordinadora de Defensa del Agua y de la Vida de Cochabamba". The war for water resulted in several injuries and infrastructural damage. The dollar loss was pegged at $150 million dollars.
The organization eventually achieved its objective in 2000 and the water law was modified substantially in favor of the people.
Following their victory a public drinking water company called SEMAPA was formed in Cochabamba.
Ever since the victory of the Water War by the people of Cochabamba , the American Transnational, Bechtel Company has been trying to retrieve a damage compensation of 25 million dollars from Bolivia despite investing far lesser in the project.
Since the parties that makeup the government in Bolivia have a vested interest, they delay the approval of the bylaws for any new water law that kills their interests in privatization. They do this by tarnishing the public water company SEMAPA’s attempts to manage water, killing the spirit of the social protests and refuse to open trials against the protesting leaders.
The water war in Bolivia has taken on a new flavor. Political parties are trying to export water from the Misicuni River, to Chilean Mining companies. If the government and the multinationals achieve this objective of exporting water their attempts at privatization would successful.
The Scenario Now
"Coordinadora" is therefore trying to address the very root cause and fighting for a Democratic Assembly, so that people can democratically decide without having political parties who have vested interests represent them on water issues.
GLOBAL GREEN COMPANY
ReplyDeleteGlobal Green was set-up in the year 1992 in Bangalore as a JV between India’s Thapar group & a European company. In 1996, the Thapar acquired 100% stake, & renamed as The Global Green Company Limited. It has been the pioneer and leader of the pickled cucumber business out of India. The various strategic acquisitions like VST-Natural Products Ltd., Intergarden N.V. or Puszta Konzerv Kft have helped the organization become an established player various categories like pickled cucumber to condiments and are in line with their current portfolio.
As a horticulture product company in India it grows, manufactures , distributes & sells pickled cucumbers (gherkins, cornichons, pickles and relish), sweet-corn, silver skin onions, peppers (jalapeño and paprika), cherries, capers and mixed vegetables. The company’s also offers relish, a mix of chopped and diced pieces of vegetables, such as cucumbers, onion, tomatoes, jalapenos, cabbage, and red chilies; and spices, including ground & crushed red peppers, turmeric powder and whole, and spice. It is a private label supplier to some global food retailers in addition to exporting products under its own brand name Eden Garden. In India, the Company retails under the brand name Tify.
The company aims to empower Indian farmers to produce internationally acceptable crops along with other products. The basic concentration is on small and marginal farmers and is done by educating the farmers about efficient cultivation techniques (particularly gherkins) and modernizing the process with the help of technology by developing an excellent package of agricultural practices as part of its contract farming techniques. It is ISO 9002 certified for excellence in processing &marketing of preserved foods & vegetables.
It also focuses on stepping-up productivity, making assured supply of inputs, constant improvement of production through rigorous research and development techniques. The company’s business model is evident at various levels i.e. agricultural inputs, cultivation, harvesting, processing, packaging, delivery & customer care.
Contract farming in gherkins, a non-traditional crop grown mainly for the export market, is very successful in India. Gherkins are a labor-intensive crop (250-300 labor days per hectare of crop) and lead to more employment opportunities and reduced labor migration by providing wage labor during off season.
Global Green works with 31,000 farmers in Karnataka, Tamil Nadu and Andhra Pradesh. The company has been contracting with farmers to supply processed gherkins in the global market. It has tied up with about 10,000 farmers in Karnataka, Andhra Pradesh, and Tamil Nadu. It has two processing plants in Zaheerabad in Andhra Pradesh (50 tons/day capacity) and at Bangalore in Karnataka (30 tons/day capacity).
Farmers are offered different prices depending on the quality of the produce. In order to sustain the contracting relation, the company also purchases produce that is not fit for export and sell it in the domestic market. Apart from buying the produce, the company provides technical support and agricultural inputs (seed, fertilizer, and pesticides) on credit to farmers, with the cost adjusted in the final purchase transaction.
Saloni Goel FT12455
Shashank Shekhar FT12460
Freeplay Hand Crank Radio
ReplyDeleteFreeplay Energy Ltd. manufactures and distributes portable electrical/electronic products like lights and radios. They are either powered by solar energy or by hand cranked generators that work to recharge the batteries. Their aim is to create an international market for self sufficient energy products. They hope to promote education and information access in emerging and developing nations.
The Radio
• As big as a paperback book i.e. about 7” long by 4” tall
• It has 3 different energy supply facilities
o A carbon steel spring which is the hand crank
o Solar panel
o NiCd rechargeable battery which can be powered by either the above two ways or directly using electricity
• It has AM and FM radio
• Built in flashlight
• Headphone plug and speakers
• Frequency Range
o FM - 88 to 108 MHz
o AM - 520 to 1700 KHz
This radio is creating a rage in Africa. While Freeplay’s aim is to make money, it has also established a non-profit foundation to bring the radios to the people who will be able to benefit from them the most in rural Africa.
This technology has huge potential. What is right now being used to run radios in dusty villages can be used to turn the lights back on during blackouts. In times of emergencies, this can give preparedness.
WIRES – THE WOMEN’S INFORMATION RESOURCE ELECTRONIC SERVICE
ReplyDeleteEmancipation of women has been the buzz word. While there are many organizations that claim to work towards the empowerment of women, there are only a few that have done noticeable work in this arena. In this context, we discuss a program was in 1999 by the Council for the Economic Empowerment for Women of Africa (CEEWA) in Uganda and is called the Women's Information Resource Electronic Service (WIRES) initiative.
Many women in Uganda are the primary bread-earners of the family who engage in agricultural work or run small businesses. Men walk away with all the advantages of credits & business transactions despite the women working to earn the living. It was then that the CEEWA decided to reach out and lend a helping hand to this class of women. This led to the emergence of the WIRES program.
What CEEWA strove to achieve through the WIRES initiative is a means to facilitate the growth of women entrepreneurs and organizations led by women who have the ability to use Information and Communications Technologies (ICTs) for economic and social development.
Their primary focus was on enhancing the skill sets of their women entrepreneurs to utilize the services of ICTs that set up telecentres in various areas. The WIRES program also emboldens the use of a central information system on the internet. With the muscle of technology provided by databases, which mostly contain information stored & used for analysis and market research, the women can now obtain information necessary to run their businesses. This information encompasses information on the market structure, the prices of various tradable items, tips on how to run their businesses more effectively & best practices in various fields, especially agriculture since that happens to be a large source of income in rural Uganda. The vast amount of information also includes animal husbandry, information on other women’s groups & trade. Thus, by bringing information technology to the aid of women empowerment, WIRES is now a success model that has made it one of a kind.
With the success of this model, similar programs have been launched in 6 other places. Although the government and various other NGOs are trying their best to reach out the needy and help them in every way possible, there is still more that could be done.
Hollard Group (Part - 1)
ReplyDeleteBackground
Established in the year 1980 (by Robert Enthoven), Hollard Group is the largest privately owned insurer in South Africa. The company deals in two insurance licenses: short term and life
Life Insurance business at the BOP level is barely considered a successful model. This is due to the fact that the demand for Insurance in this market is low whereas the distribution costs are high.
An old age tradition in Africa is to hold expensive and elaborate funerals; however the costs for these funerals were highly burdensome on poor families. Hence for the provision of funeral coverage services, people often relied on informal burial societies. So the demand for affordable funeral insurance was immense however it was being hit due to the unattractive schemes under existing insurance models. Thus the market was highly under supplied.
This gave a room for opportunity for Hollard group who in 2006 decided to tap this large potential market in joint venture partnership with PEP (a high volume, low volume popular clothing retail store with 1100+ outlets across South Africa) through an innovative business model. The partnership contributed significantly to the success as PEP had a well established distribution network as well as an existing customer base whereas Hollard had expertise in underwriting and product design along with administrative support. As part of the deal, PEP is entitled to 10% commission per sale (on sales of 5 funeral products by Hollard Life Insurance Company) as well as generated insurance profits.
Product Offerings
The product offerings of Hollard are primarily targeted at families having monthly incomes ranging from $350 - $600. These offering have gone through multiple phases of tailoring to suit the needs of the target segment.
Yeshasvini is a health insurance scheme launched in the year 2002 which the goal of providing health insurance coverage to the poor and the working class who didn’t have the capacity to pay for simple medical treatments. This scheme was the brain child of Dr. Devi Prasad Shetty the founder of Narayana Hrudayalaya. The entire scheme of conceptualized by Narayana Hrudalaya. After Intense research, their team found that the average occupancy rate of hospital beds was 35 % & most of the operation theatres across hospitals in Karnataka were underutilized. They also found rural patients don’t go to hospital for most of the common illness. The root cause for all these problems were identified as the lack of capacity among the poor who could not afford the medical treatment. The study concluded that by providing an insurance scheme with low premium and covering all the costs of hospitalization, surgery and other costs associated with it for the rural poor could solve the problem. Also Dr Shetty felt that by covering large number of people under this scheme he would be able to mitigate the basic financing problem which was a major challenge in similar schemes in the past.
ReplyDeleteBut there were other challenges that this insurance scheme had to overcome which otherwise could dent the entire aim of this scheme.
Scope of Coverage
For the insurance scheme to be successful the scheme had to find ways to gather all the dispersed farmers and informal workers and ensure everybody became a member of this scheme. This was achieved by a three step action plan.
• Communicate the scheme to the farmer
• Creating infrastructure to Issue of identity cards for the policy holders &
• Collect insurance premiums
Restricted benefits problem
Rupees 90 was charged as a premium per person per year. This was based on a research which concluded that rural poor could afford an annual premium ranging anywhere between 75-85 Rupees. Also the government for political reasons provided a subsidy to this scheme where the government accepted to pay one third of the premium amount for the enrolled members (Rs 30 per person would be paid by the government).
Creation of Health care infrastructure
For the successful implementation of the scheme both private as well a government hospitals were included in the network of hospitals that were covered under this scheme.
Initially 30-40 hospitals agreed to participate but after seeing the success of the scheme and due to the rising number of patients grew the number of hospitals that participated under the scheme increased. By 2004, 92 hospitals have joined in this scheme to provide medical care to members of Yeshasvini and by end of 2004, this number grew by 118
A trust was set up to administer the insurance scheme. The Yeshasvini trust has 11 board members from the medical community and the Department of Cooperation. Based on the mandate of Insurance Development Regulatory Authority (IRDA) the trust appointed a third party administrator Family Health Plan Limited (FHPL), which is a division of Apollo hospital.
The scheme has been successful in providing coverage for patients from the rural population who could not afford these lifesaving medical treatments. But a major drawback of the scheme is that it does not cover all health related issues, but like diagnostic tests, and medicines which is still heavy burden on poor rural families. Another major problem is most of the subscribers were forced to join the scheme. The health insurance scheme’s long term can only be successful only when the individuals freely chose to join than being forced to join the scheme. Also there is a lack of knowledge among the policy holders on what is exactly are covered by the policy. Unless the rural population is properly educated this would still be a problem and may threaten the success of such a scheme in long term.
Hariharn Ganeshan – FT12430
Raghavendra B – FT12243