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© Confederation of Indian Industry

Business Model

Innovation

Sustainable & Inclusive


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


Population footprint

Poverty footprint Ecological footprint

We live in an increasingly disfigured world

Consumption footprint


Though incremental population is on

decline, most people will be added in

less developed countries


Scramble for

basic needs

will only get

complex


Consumption will rise with increase in

urbanisation; less than 50% people now

live in rural areas


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


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


NEW OPPORTUNITIES

NEW MODELS


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


"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


2.6 bn without facilities

is good business

Shit


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


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


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


In which industry is


What industry are they in?


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.

http://www.fastcompany.com/most-innovative-companies/2011/profile/shaadi-com.php




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.


WHAT IS A BUSINESS MODEL?


What is a business model?

Simplest form

What

Who How


Business model for the next gen enterprise

Value Creation

Return

Target

Segment

Delivery

Investme

nts

Enablers


What is business model innovation?

• Change of two or more components

• Redefine a company’s basis for competition

• Lead to a superior value creation


What is business model innovation?

• Single function’s innovation

• Uncoordinated functional innovation

• Internal efficiency improvement

• Mere product, service or technological innovation

not


Business model for next gen enterprise

Value Creation

Return

Target

Segment

Delivery

Investme

nts

Enablers


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?


Twitter challenge

Value creation statement in 140 characters


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


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


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


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


Solar

Panel

Solar Drive

Submersible

Pump

Output: 30 ltr/ watt

Upto 1000 watt


Solar Panel Solar Drive

Domestic lighting in night time

12/24 V, 40 Ahr


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


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 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


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


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


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


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


“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


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

http://www.neurosynaptic.com/index.html


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


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


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

http://www.selco-india.com/index.html


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

http://www.selco-india.com/img_gallery_images_final/image5.jpg





http://www.selco-india.com/index.html


THANK YOU

Sachin Joshi

[email protected]

business model innovation - מעלה - עסקים מנהיגים אחריות ... cars new markets...

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