Business Model Innovation - מעלה - עסקים מנהיגים אחריות ... cars New markets...
Transcript of Business Model Innovation - מעלה - עסקים מנהיגים אחריות ... cars New markets...
© Confederation of Indian Industry
Business Model
Innovation
Sustainable & Inclusive
© Confederation of Indian Industry
25% of 100 global companies surveyed by AMR Research said that
commodity cost volatility/availability is the biggest risk challenge facing their
company today. Source: The Global Poverty Project
We live in an increasingly volatile world
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Population footprint
Poverty footprint Ecological footprint
We live in an increasingly disfigured world
Consumption footprint
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Though incremental population is on
decline, most people will be added in
less developed countries
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Scramble for
basic needs
will only get
complex
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Consumption will rise with increase in
urbanisation; less than 50% people now
live in rural areas
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There aren’t more
Earths to support
human footprint in a
BAU scenario
= f ( # of People) X (Quality of Life)
7 Billion Food, Energy, Water, Housing,
Transportation, Lifestyles
9 Billion Respectable QoL for All
Pressure on
the Earth
= f ( # of People) X (Quality of Life) Pressure on
the Earth
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Radical
Incremental
Transformative
Business Value
+++
+++
+
+
Alignment with business Renewables Community initiatives Resource conservation Policies & systems
Solutions for the poor IT@help Resource saving Electric cars
New markets BoP Energy positive buildings Mobility solutions
Sustainability Value
Reacting to outside pressure in an ad-hoc way
Reactive
Create value through transformation
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NEW OPPORTUNITIES
NEW MODELS
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What?
Why? 1stW solns ≠ 3rdW needs India, a
world in itself
potential = gap + challenge
Poverty in the EU & the US
New biz models
Affordability thru scale for penetration
Energy, health, jobs
Show the way (process)
Meet unmet needs (soln)
Energy, health, sanitation, water, education
Drivers
Shortages/deficits – scramble
Entrepreneurship
Market opps
Infrastructure
Experience
Networks
Institutions
Collaborations
Recognition
Finance
Successes
HUL-Shakti
Selco
NDDB
HITW
ITC
H2O purifier
M-banking
Next big export
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"I shall have to defend myself on one point, namely,
sanitary conveniences. I learnt 35 years ago that a
lavatory must be as clean as a drawing-room.”
24 May 1925
India is ranked as the second worst country for sanitation
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2.6 bn without facilities
is good business
Shit
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Four characteristics of SI2
• add value to the life of the people much beyond
the immediate use of the product or service
• create a product or service of an
uncompromising quality at a price that is
affordable
• address the challenge of resource use efficiency
to manage drastically low cost structures
• scalable and replicable to suit requirements of
local circumstances and complexities
© Confederation of Indian Industry
Often, constraints to growth lie within
• Project approach
• Iterative & not linear
• Detached business
strategy/ model
• High costs/ overheads
• Need based
• Policies/ regulations
• Infrastructure deficit
• Finance scarcity
• Customer knowledge
• Cultural differences
Internal External
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Why is BMI important?
Constant need to find new ways to grow and remain competitive
New competition comes with radically different business models
Industry structures are transforming
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In which industry is
© Confederation of Indian Industry
What industry are they in?
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© Confederation of Indian Industry
© Confederation of Indian Industry
01 / Shaadi.com >>
For proving that marriage, Indian-style, works online as well as off. This year,
the world's largest matrimonial site plans to open retail sites for marriage
counselors for its 20 million registered users.
02 / Tata Motors
For leveraging its knowledge of the Indian market. Since the launch of the
Indica in 1999, Tata Motors has launched products such as the Nano, Aria,
Indigo and a host of commercial and utility vehicles that meet the particular
transport needs of Indian consumers and businesses.
03 / HarVa
For expanding India's outsourcing industry to rural areas. Created to "harness
the value of rural India"--and head off the loss of outsourcing businesses to
even lower-cost locations than Bangalore or Mumbai--HarVa is one of India's
first rural business process outsourcing (BPO) operation. HarVa trains young
rural people, especially women, to develop technical skills, from data entry to
software testing.
04 / Apollo Telemedicine Networking Foundation
For scaling telemedicine. With more than 150 telemedicine centers across the
globe, Apollo offers mobile telemedicine units in areas where there are no
hospitals, remote consultations, and ICU monitoring. Its web-enabled
telemedicine app, Medintegra WEB, allows doctors, nursing homes, and
hospitals to better treat patients in rural areas.
05 / Gram Vaani (Village Talk)
For making community radio possible in villages and small towns. Gram Vaani's
simple server and software helps rural communities create their own radio
stations. Twelve are broadcasting today, with even more in the queue.
01 / Shaadi.com
For proving that marriage, Indian-style, works online as well as off. This year, the world's largest
matrimonial site plans to open retail sites for marriage counselors for its 20 million registered users.
02 / Tata Motors
For leveraging its knowledge of the Indian market. Since the launch of the Indica in 1999, Tata Motors
has launched products such as the Nano, Aria, Indigo and a host of commercial and utility vehicles that
meet the particular transport needs of Indian consumers and businesses.
03 / HarVa
For expanding India's outsourcing industry to rural areas. Created to "harness the value of rural India"--
and head off the loss of outsourcing businesses to even lower-cost locations than Bangalore or Mumbai--
HarVa is one of India's first rural business process outsourcing (BPO) operation. HarVa trains young rural
people, especially women, to develop technical skills, from data entry to software testing.
04 / Apollo Telemedicine Networking Foundation
For scaling telemedicine. With more than 150 telemedicine centers across the globe, Apollo offers mobile
telemedicine units in areas where there are no hospitals, remote consultations, and ICU monitoring. Its
web-enabled telemedicine app, Medintegra WEB, allows doctors, nursing homes, and hospitals to better
treat patients in rural areas.
05 / Gram Vaani (Village Talk)
For making community radio possible in villages and small towns. Gram Vaani's simple server and
software helps rural communities create their own radio stations. Twelve are broadcasting today, with
even more in the queue.
© Confederation of Indian Industry
06 / Invention Labs
For giving a "voice" to speech-impaired children. The company's AVAZ device interprets the gross motor
movements of a child and uses predictive software to help users form sentences, which it then reads
aloud. It also includes a portable touch-screen voice synthesizer, which can be easily mounted on a
wheelchair.
07 / A Little World
For taking banking to the remotest of villages in India. Relying on biometric authentication, it connects
more than 3 million customers to 25 major banks, which allows them to expand without branches. It also
provides a means for disbursing various government payments to the poor.
08 / Digital Green
For crowdsourcing instructional videos. To reach the legions of Indian farmers that ignore instructional
media from the agriculture industry, Digital Green turned the camera over to a more trusted teacher: their
peers. The company lets select villagers film themselves demonstrating new agricultural techniques.
Then, after checking for accuracy, it screens them for the farmers using handheld projectors.
09 / Fabindia
For connecting more than 40,000 traditional craftspeople with the world's growing urban middle class.
Through its website and 136 retail stores (including one each in Rome, Kathmandu, and Dubai),
Fasbindia sells clothing and products for the home, all of which are sourced from villages across India.
10 / Godrej Group
For introducing refrigeration to India's rural masses. The Godrej ChotuKool costs roughly $70, does not
have a compressor and runs on batteries.
© Confederation of Indian Industry
WHAT IS A BUSINESS MODEL?
© Confederation of Indian Industry
What is a business model?
Simplest form
What
Who How
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Business model for the next gen enterprise
Value Creation
Return
Target
Segment
Delivery
Investme
nts
Enablers
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What is business model innovation?
• Change of two or more components
• Redefine a company’s basis for competition
• Lead to a superior value creation
© Confederation of Indian Industry
What is business model innovation?
• Single function’s innovation
• Uncoordinated functional innovation
• Internal efficiency improvement
• Mere product, service or technological innovation
not
© Confederation of Indian Industry
Business model for next gen enterprise
Value Creation
Return
Target
Segment
Delivery
Investme
nts
Enablers
© Confederation of Indian Industry
Business model for next gen enterprise
Value Creation
What is the impact “beyond the job to be
done”
Which “job to be done” is offered?
Return
Target
Segment
Delivery
Investme
nts
Enablers
Who’s the customer? Who
are the beneficiaries?
What is the channel? What’s
the brand image? How do
you engage?
Which are the cost centres?
Who’s investing? What are
the values?
What are the revenues &
margins? What is the impact?
What are the key
competencies, capabilities,
and capacities?
© Confederation of Indian Industry
Twitter challenge
Value creation statement in 140 characters
© Confederation of Indian Industry
Non-poor, asset holders, credit worthy
Mainstream loan portfolio
Strong risk management
Huge profit focus
Profits shared with shareholders
Unbanked poor, little/ no assets
Micro loans, no collaterals
High repayment
Community ownership
Profit reinvestment
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Value Creation
Return
Target
Segment
Delivery
Investme
nts
Enablers
BMI of a typical MFI
Unbanked poor,
mainly women
Direct / branches
Entrepreneurship training Low fixed costs
Micro-finance
Income generating
Communities, women
Entrepreneurship training
Interest payments
Financial access – loans,
savings, pensions
Capital costs
Government
© Confederation of Indian Industry
© Confederation of Indian Industry
BMI for virtual micro-lending
Value Creation
Return
Target
Segment
Delivery
Investme
nts
Enablers
Online payment platforms
Local MFIs
Risk management
Online platform
Screening Local MFIs
Resourceful urbanites
Rural / urban poor
Global
Interest or service charge
Donations
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Value Creation
Return
Target
Segment
Delivery
Investme
nts
Enablers
Village poor
Airtime bills to GP
Service charge to
Grameen Bank
Village phone
Cellular services @ 50%
discount
Grameen Phone
Grameen Bank
Village phone
operators
Service charge
from GP
Grameen branches
Women entrepreneurs
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Solar
Panel
Solar Drive
Submersible
Pump
Output: 30 ltr/ watt
Upto 1000 watt
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Solar Panel Solar Drive
Domestic lighting in night time
12/24 V, 40 Ahr
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The Period Industry
Source: "Sanitation protection: Every Women’s Health Right," a study by AC Nielsen.
buying sanitary napkins meant no milk for the family
girls who attain puberty in rural areas either miss school for a
couple of days a month or simply drop out altogether
Indian market size: $ 35 mn / year
Annual growth rate: 16%
resort to using dirty rags, newspapers, dried leaves, and ashes
~500 mn women in India do not use sanitary napkins
© Confederation of Indian Industry
Value Creation
Low-cost sanitary napkins
Women entrepreneurs
Better health
Return
Target
Segment
Delivery
Investme
nts
Enablers
Women entrepreneurs as
producers & sellers
Rural women as users
Small-scale production
system; SHG model; women
salespersons
Small-scale sanitary napkin
machine = $2,500
© Confederation of Indian Industry
© Confederation of Indian Industry Source: IFC
• Increased income by $300-400 / acre for onion farmers
• Increased net incomes by $100-$1,000 / acre due to efficiency gains
• Estimated reduction of 500 million cubic meters of water per year as
compared to flood irrigation
• 35,000 tons of onions procured from 1,800 contract farmers in 2008,
of which 90% are small farmers
© Confederation of Indian Industry
Jain Irrigation
• Ensured market and increased income by $300-400 per
acre for onion farmers
• Increase in net incomes by $100to $1,000 per acre due
to efficiency gains
• Estimated reduction of 500 million cubic meters of water
per year as compared to flood irrigation
• 35,000 tons of onions procured from 1,800 contract
farmers in 2008, of which 90% are small farmers
Source: IFC
© Confederation of Indian Industry
© Confederation of Indian Industry
© Confederation of Indian Industry
Low-cost & high standardisation
• Hospitals are taken on long leases (15-20 years) from
those who could not run them
• Focus on a particular niche – maternal and child care
– cuts down on the need for many specialist doctors
and also on the range of equipment needed
• Standardisation in clinical procedures and kits brings
down costs too
– 8 times more procedures than other private clinics.
– operating theatres accommodate 22-27 procedures
each week compared to 4-6 in a private clinic
© Confederation of Indian Industry
Skill-based deliverables
• Doctors, on an average, perform 17-26 surgeries per
month, which is 4 times compared to others
• Earn fixed salaries rather than the variable consulting
fees of their private clinic peers
• Less qualified auxiliary nurse midwives (ANMs) rather
than graduate nurse midwives (GNMs)
– ANMs are trained as birth attendants; cost much less
than GNMs
© Confederation of Indian Industry
© Confederation of Indian Industry
Process re-engineering
• 30 surgeries / day compared to 4-5 by other major
hospitals
– Doctors: vertical approach towards specialisation
– Deskilling: train high school qualified women to take
echocardiograms
• Mortality rate – 2%
• Wider reach – partnership with ISRO, Indian Post
Services, SANA
© Confederation of Indian Industry
“Goal: wipe out needless blindness”,
Aravind’s founder, D G Venkataswamy
• 60% of patients treated for free, even as it remains a
profitable venture
• disaggregated course of care
• surgical eye-care process is the key
• minimises the demands on doctors’ time: the doctor
performs only the preliminary examination, final
diagnosis, and surgery
• rest is done by paraskilled paramedics
• doctors at are highly productive and patient throughput is
high; 2,400 surgeries / doctor / year compared to 300 in
standard Indian clinics
© Confederation of Indian Industry
© Confederation of Indian Industry
Leveraging technology for diagnosis
ReMeDi (remote medical devices) set up kiosks in
villages
An integrated patient-record centre helps doctors in
recording all health-related issues of a patient
Basic set of parameters include:
Stethoscope, thermometer, blood pressure meter,
webcam, and ECG
Patient readings are transmitted to the doctor who make
preliminary diagnoses and issue prescription
© Confederation of Indian Industry
© Confederation of Indian Industry
1A. Rent
rooftops
2. Channel water to tank:
50% household use
3. Collects in small
community tanks
1B. Get
harvesting rights
4. PRI leases for free
10,000 M2 area
Water used for
horticulture
Akash Ganga:
10,000 villages & still scaling
© Confederation of Indian Industry
© Confederation of Indian Industry
Micro-distribution
Aim is to provide eye care and eyeglasses to people in
developing countries that might not otherwise have
access
Vision entrepreneurs sell door-to-door spectacles
Vision entrepreneurs are community members, sell
health products to low income households
© Confederation of Indian Industry
© Confederation of Indian Industry
© Confederation of Indian Industry
The next gen enterprise model
Value Creation
Return
Target
Segment
Delivery
Investme
nts
Enablers
Rural poor;
Rs 2000 / mth
Energy service
centres
RRBs, NGOs, farmer
cooperatives, SHGs
Customised solar
energy solution;
livelihood linked
Design, services and
finances solar systems
Manufacturing, servicing,
training
System sales, RE,
livelihood creation
© Confederation of Indian Industry
Beyond the job-to-be-done
• Longer business hours - higher monthly
incomes
• Cleaner, healthier environments, both at
work and at home
• Increased safety for mobility and protection
from animals
• Reduced dependence on kerosene/LPG -
reducing monthly energy costs
• More time for children to study after sunset
• More quality time spent with families
(television, dinner)
• Increased possibility of use of televisions,
computers, and cellular phones