Envirofit india case study presentation
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Transcript of Envirofit india case study presentation
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CASE 1: ENVIROFIT India
Sandra Romero Ruiz May 27th, 2014 -‐ Phnom Penh
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• Development of quesAonnaires (Value Chain Analysis) ✓
• Individual interviews (program managers, business units of the value chain) ✓
• Visits to the field ✓ • Focus group discussions ✗ • Desk review ✓
• Preliminary findings presentaAon ✗
Methodology Used
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Where?
ENVIROFIT India main office in Pune, and Partners in Tamil Nadu state When?
Third week of April 2014 What kind of interviewees?
Program managers, field staff, partners (MFIs & NGOs), users
INTERVIEWS & FIELD VISITS
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What is ENVIROFIT India? A social enterprise established in 2008 as a subsidiary of ENVIROFIT InternaAonal.
INTRODUCTION & HISTORY
India
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1. OrganizaAonal CharacterisAcs 2. Business Strategies Employed
a) ENVIROFIT India Value Chain
3. Financial Model
4. Market access and trends
5. Channel Strategy
STUDY FINDINGS
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ORGANIZATIONAL CHARACTERISTICS
• Type of organizaCon: Social enterprise established in 2008
• Aims to develop and distribute clean technology soluAons that improve health, livelihoods, and the environment while enhancing energy efficiency across Asia. • Design is done in collaboraAon with engineers at Colorado State University, the Clean Cook Stove was tested in their labs and in the field to ensure that it reduced emissions.
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ORGANIZATIONAL CHARACTERISTICS
OWNERSHIP OF THE MEMBERS – Business Units
• ENVIROFIT India outsources all services of the value chain from different partners. All partners are legally registered businesses or organizaAons, and ENVIROFIT India signs MoUs billaterally with all of them.
• They are specialized in their field of work (manufacturing, logisAcs, Microfinance, Savings Groups, etc.)
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ORGANIZATIONAL CHARACTERISTICS
WHERE THEY WORK
-‐ Andhra Pradesh -‐ Assam -‐ Bihar -‐ Gujarat -‐ Karnataka -‐ Kerala -‐ Maharashtra -‐ Manipur -‐ Orissa -‐ Rajasthan -‐ Tamil Nadu -‐ Uear Pradesh -‐ Uearakhand -‐ West Bengal
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ORGANIZATIONAL CHARACTERISTICS
NGOs M
FIs CSR
End users India
• Reliable organizations • Market intelligence • Embedded services • Finance Facilities
International
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ENVIROFIT India Value Chain
BUSINESS STRATEGIES EMPLOYED
Production Distribution & Commercialization Inputs End User
PRODUCTION FLOW
FINANCIAL FLOW
INFORMATION FLOW
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BUSINESS STRATEGIES EMPLOYED
ENVIROFIT formalizes agreements with all
business units of the V.C
• Copyright • Centralized VALUE CHAIN
(1 industrial manufacturer & 1 distributor)High quality control
• 400,000 ICSs sold from January 2008 to April 2014
• Channel strategy: solid partnerships with reputable NGOs, MFIs and Private Sector (CSR), retailers, cooperaAves of producers
End Users
NGO
s (IVDP)
MFIs
(Fullerton)
Industrial Producer
(x1)
Distributor (x1)
CSR CooperaA
ves
VALUE CHAIN
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BUSINESS STRATEGIES EMPLOYED
VALUE CHAIN
Industrial Producer (x1)
Distributor (x1)
End Users
Independent RETAILERS
• ENVIROFIT INDIA has tested numerous forms of channeling their product
• Internet Based sales (Amazon)
• Working with retailers has been one of them, it is not currently the main channel, but it will be strengthen once the bu s i n e s s m o d e l i s mature
PROSPECTIONS FOR THE FUTURE :
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FINANCIAL MODEL
ACCESS TO FINANCIAL CAPITAL
• Carbon finance – Carbon Credits, registered in 2012 & Carbon Offsets – VERs, CERs & Gold Standard
• Profit from sales. Stove pricing strategy – Price fixed along the Value Chain
• Loan from IntelleGrow (18 months period) • End User microfinance scheme – through partnerships with
MFIs (Fullerton), through Saving & Credit schemes • Agreements with CooperaAves of Producers – Dairy Industry
and Tea PlantaAons – parAally financed for the End User with a CSR model
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Origin of the Capital invested: • Profit from sales: re-‐invested in the Value Chain • Loan
Mainly in: • Monitoring, reporAng and verificaAon (Carbon Credit) • ENVIROFIT India Officer siing in the Unit of ProducAon -‐
Manufacturer (quality standards and quality control) • Training to the Officers of the MFIs and NGOs – IncenAve
mechanism, they become promoAon officers • ENVIROFIT India facilitates the supply chain, outsourcing all
services
FINANCIAL MODEL
INVESTMENTS
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FINANCIAL MODEL RETURN ON INVESTMENTS
• Efficiently made throughout the Business Units in the Value Chain
• Of the total price 30,5 USD • 15 – 20 % covers manufacturing costs • 55% operaAons cost and distribuAon • 25% channel margin
• Turnover revenues mainly spent currently covering operaAonal costs – the VC is sustainable. Soon in Business scaling
• There will be some retailing units in the future some return at that level
• Growing sales – promising naAonal market (middle and low income households from rural areas)
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• ENVIROFIT enters markets where there are already other industry players and exists certain Market Development – Not Market pioneer
• Low investment in markeAng or awareness. Low
visibility • IncenAve mechanism for Field Officers of partner
organizaAons who promote the ENVIROFIT ICS
MARKET ACCESS & TRENDS
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• Strategic partnerships with reliable and popular NGOS and
MFIs with high reach out to rural communiAes, corporates and government – high number of partnerships
• ENVIROFIT is exploring online sales (Amazon, Evan's Outdoor Store (hep://www.evansoutdoorstore.com)
• Retail sales – will be re-‐launched when the business model reaches maturity
• Centralized channel strategy, copyrighted product
• Amer sales support & 2 years warranty
CHANNEL STRATEGY
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SWOT ANALYSIS
STRENGHTS WEAKNESSES
OPPORTUNITIES THREATS
ENVIROFIT Case
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RECOMMENDATIONS
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RECOMMENDATIONS
• “Bring addiAonal financial support for naAonal awareness and visibility of the industry”
• “AddiAonal funds should be invested in developing quality protocoles”
• “Financial support should be devoted to educate the end user on those protocoles and levels of quality”
• “No subsidies” • “Boost regional opportuniAes and
cooperaAon, enabling environment for the ICS industry in the region”
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RECOMMENDATIONS
• “ The key to scalability is changing the habits of the exisAng user. Just giving the stove does not help. We need to ensure she uses the stove 100% and not intermieently between the mud stove/ tradiAonal stove and ENVIROFIT stove”
• “Stronger role of coordinaAon plaporms -‐ GACC (awareness, quality validaAon, etc.) needed”