Busines Model Innovation

Business Model
Innovation
Sustainable & Inclusive

© Confederation of Indian Industry

We live in an increasingly volatile world

25% of 100 global companies surveyed by AMR Research said that
Source: The Global Poverty Project commodity cost volatility/availability is the biggest risk challenge facing their
company today.

Consumption footprint

Population footprint

We live in an increasingly disfigured world

Poverty footprint Ecological 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

Pressure on = f ( # of People) X (Quality of Life)
the Earth 7 Billion Food, Energy, Water, Housing,
Transportation, Lifestyles

Pressure on = f ( # of People) X (Quality of Life)
the Earth 9 Billion Respectable QoL for All

Create value through transformation

+++
Transformative
New markets
BoP
Energy positive
buildings
Mobility solutions

Radical
Solutions for the
Sustainability poor
Value IT@help
Resource saving
Incremental Electric cars
Alignment with
business
Renewables
Reactive Community initiatives
Reacting to Resource conservation
outside pressure Policies & systems
in an ad-hoc way
+

+ Business Value +++


NEW OPPORTUNITIES
NEW MODELS


What? 1stW solns ≠ 3rdW needs India, a
Why? world in itself

potential = gap + challenge

Next big export

Poverty in the EU & the US
Show the way (process)
New biz models
Meet unmet needs (soln)
Affordability thru scale for penetration
Energy, health, sanitation, water, education
Energy, health, jobs

Successes
Infrastructure
HUL-Shakti
Experience
Drivers Selco
Networks
Shortages/deficits – scramble NDDB
Institutions
Entrepreneurship HITW
Collaborations
Market opps ITC
Recognition
H2O purifier
Finance
M-banking


"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

Shit
is good business


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

• Policies/ regulations • Project approach
• Infrastructure deficit • Iterative & not linear
• Finance scarcity • Detached business
• Customer knowledge strategy/ model
• Cultural differences • High costs/ overheads
• Need based

External Internal


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.

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

How Who


Business model for the next gen enterprise

Return

Target
Enablers
Segment

Value Creation

Investme
Delivery
nts


What is business model innovation?

• Change of two or more components
• Redefine a company’s basis for competition
• Lead to a superior value creation


not
What is business model innovation?

• Single function’s innovation
• Uncoordinated functional innovation
• Internal efficiency improvement
• Mere product, service or technological innovation


Business model for next gen enterprise

Return

Target
Enablers
Segment

Value Creation

Investme
Delivery
nts


Business model for next gen enterprise

What are the revenues &
margins? What is the impact?
Return

What are the key
competencies, capabilities,
and capacities? Value Creation Target
Enablers
What is the impact Segment
“beyond the job to be
done” Who’s the customer? Who
are the beneficiaries?
Which “job to be done”
is offered?

Investme
Delivery
nts
Which are the cost centres?
What is the channel? What’s
Who’s investing? What are
the brand image? How do
the values?
you engage?


Twitter challenge

Value creation statement in 140 characters


Non-poor, asset holders, credit worthy Unbanked poor, little/ no assets

Mainstream loan portfolio Micro loans, no collaterals

Strong risk management High repayment
Huge profit focus Community ownership
Profits shared with shareholders Profit reinvestment


BMI of a typical MFI

Interest payments
Financial access – loans,
Return savings, pensions

Government
Target
Enablers
Segment
Communities, women Value Creation Unbanked poor,
Entrepreneurship training mainly women
Micro-finance
Income generating

Investme
Delivery
Capital costs nts
Direct / branches
Low fixed costs Entrepreneurship training


BMI for virtual micro-lending

Interest or service charge
Return

Resourceful urbanites
Online payment platforms
Target
Enablers Global
Local MFIs Segment

Value Creation Rural / urban poor

Local MFIs
Screening Investme
Delivery
nts
Risk management
Donations
Online platform


Service charge
from GP
Return

Grameen Phone
Grameen Bank
Village phone Enablers Target
operators Segment

Value Creation Village poor
Village phone
Cellular services @ 50%
discount
Grameen branches
Investme
Delivery
nts

Airtime bills to GP Women entrepreneurs
Service charge to
Grameen Bank

Upto 1000 watt

Output: 30 ltr/ watt

Solar Submersible
Panel Pump
Solar Drive

Domestic lighting in night time

Solar Panel
Solar Drive

12/24 V, 40 Ahr

The Period Industry

~500 mn women in India do not use sanitary napkins

resort to using dirty rags, newspapers, dried leaves, and ashes

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%

Source: "Sanitation protection: Every Women’s Health Right," a study by AC Nielsen.


Small-scale sanitary napkin
machine = $2,500
Return

Value Creation Target
Enablers
Low-cost sanitary Segment
napkins
Women entrepreneurs as
Women entrepreneurs producers & sellers
Better health Rural women as users

Investme
Delivery
nts
Small-scale production
system; SHG model; women
salespersons


• 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

Source: IFC

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

Akash Ganga:
10,000 villages & still scaling
3. Collects in small
community tanks

1A. Rent
rooftops

1B. Get
harvesting rights
Water used for
horticulture

4. PRI leases for free
2. Channel water to tank: 10,000 M2 area
50% household use


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

System sales, RE,
Return
livelihood creation

RRBs, NGOs, farmer
cooperatives, SHGs
Target
Enablers
Segment
Design, services and
finances solar systems Value Creation Rural poor;
Rs 2000 / mth
Customised solar
energy solution;
livelihood linked

Investme
Delivery
nts
Energy service
Manufacturing, servicing,
centres
training


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


THANK YOU

Sachin Joshi
sachin.joshi@cii.in


Busines Model Innovation

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (14)

Andere mochten auch

Andere mochten auch (20)

Ähnlich wie Busines Model Innovation

Ähnlich wie Busines Model Innovation (20)

Mehr von maalacsr

Mehr von maalacsr (10)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Busines Model Innovation

Hinweis der Redaktion