Post on 17-Dec-2015
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Masisa BOP Benchmarking & Performance AssessmentHaas Project TeamMargot KaneLorin May
April 25, 2007
GrupoNueva/Masisa Project TeamAlejandro EspinosaKatherine RahalRodrigo TorresCristián ValenzuelaRenato Daziano
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Agenda
Introduction & Methodology Bottom of the Pyramid
Benchmarking Performance Assessment Strategic Recommendations
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GrupoNueva/Masisa
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GrupoNueva/Masisa Set an Ambitious Goal to Engage the BOP Market“GrupoNueva has established an ambitious goal: by 2008, 10% of its sales will come from ‘socially inclusive business,’ by which we seek to offer our customers opportunities through the market to break the vicious cycle of poverty.”
– GrupoNueva website
“If we stop thinking of the poor as victims or as a burden and start recognizing [the poor] as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up… What is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win-win scenarios where the poor are actively engaged and, at the same time, the companies providing products and services to them are profitable”
– C.K. Prahalad
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Masisa Chile Commissioned Haas to Assess its Performance Against That Goal
1) Conduct benchmarking to identify key success factors for BOP projects.
2) Assess the feasibility of Masisa’s BOP initiative in Chile.
3) Review pilot project, including social and operational impacts
4) Provide strategic recommendations.
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Agenda
Introduction & Methodology Bottom of the Pyramid
Benchmarking Performance Assessment Strategic Recommendations
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Haas Team Conducted In-Depth Review of 6 Companies’ BOP Strategies
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Case Studies Selected by Relevance to Masisa
Company
Geography
Industry
Product
Innovation
Description
Casas Bahia Brazil Manufacturing/Retail
Furniture/ Electronics/ Appliances
Credit/ Counseling
‘Carne’ is a credit and counseling service to help low-income consumers buy products. Among products is high quality, low-cost furniture.
CEMEX Mexico Cement Home Improvement Kits
Credit/Training
‘Patrimonio Hoy’ offers “complete solution” to home improvement via credit schemes, bundled savings, training and technical support.
Hindustan Lever Limited
India Consumer Products
Various Distribution/ Training/ Education
‘Shakti’ is an integrated program that organizes self-help groups and micro-financing schemes to provide rural women with income-generating opportunities, health and hygiene education and market access.
Natura Brasil
Brazil Consumer Products
Health & Beauty
Sustainable Development/ Integrated CSR
Natura Brasil employs extensive network of direct salespersons, along with an integrated approach to CSR and focus on natural products.
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Key Success Factors Identified from Case Studies
Shape AspirationsShape Aspirations
Tailor Local Tailor Local SolutionsSolutions
Create Buying Create Buying PowerPower
Improve AccessImprove Access
Build Build InfrastructureInfrastructure
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Agenda
Introduction & Methodology Bottom of the Pyramid
Benchmarking Performance Assessment Strategic Recommendations
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Masisa Well-Positioned to Make a Considerable Impact GrupoNueva respected as a CSR leader First-mover advantage Ability and resources to enable
functioning pilots to get to scale Supportive management, leadership
and strong commitment to objectives within Masisa Chile
Partners expressed motivation and excitement around BOP initiative
Inclusive business model/priority can have real impact on poverty reduction
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The Pilot Model is Very Complex
Masisa Role: conduct market research, design RTA furniture, provide commercial support; ensure competitive cost of wood boards
PlacacentrosRole: manufacture RTA furniture; ensure competitive cost; provide credit to agrupación social
Agrupación Social (EME/SIRREMA)Role: provide legal structure for group of entrepreneurial womenBOP Consumer
FUNDESRole: provide training; assess agrupación social performance
AVINARole: identify participants, local group to oversee projects and source of seed capital
Domos/ EduceresRole: Oversee day-to-day functioning of agrupación social
IAFRole: provide seed capital
Banco de DesarolloRole: identify entrepreneurs to participate in program; provide microcredit
Boards/design
RTA boards and credit
Training
Credit
Vendedoras
Support
Funding
Support
NGO partners, vendedoras
RTA furniture and credit
Credit
Note: model is intended to represent Haas consultants’ understanding of how the program functions based on interviews with various stakeholders. It may or may not reflect the structure as initially defined by Masisa.
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Pilot 1: EME in Conchalí
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Pilot 2: SIRREMA in Puente Alto
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Key Challenges
Strategic partnerships not effectively managed
Lack of strategic competitive positioning 10% goal ambitious and not clearly defined No metrics for success other than 10%
sales goal Distribution, logistics and channel conflict Product not designed specifically for BOP
market
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Key Challenge: Masisa’s 10% BOP Sales Goal is Ambitious
A, B, C
D, E
7,905.767 people (49% of population)
25,700m3 (7.3% of market) USD23,500,000 (3.8% of market)
Size of the BOP
Demand at the BOP
Note: numbers represent Masisa’s estimates
10% of domestic sales in Chile = USD10,000,000, or nearly half the entire BOP market!
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Agenda
Introduction & Methodology Bottom of the Pyramid
Benchmarking Performance Assessment Strategic Recommendations
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Summary of Strategic Recommendations
Set clear and understandable goals Engage stakeholders and strategic
partners Build upon core competencies Map current operations Innovate within product mix Understand the “audience,” including
target market, competitors, future market forces
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Internal Identify Priorities of BOP Initiative w/ Respect to
Sales vs. Inclusive BusinessDevelop Clear ‘Success’
MetricsMap Current BOP Activities
PartnershipsConduct Stakeholder Engagement/Analysis
Assess Core Competencies & Value-AddBuild TrustExternal
Evaluate Strategic Positioning/Competitive Landscape
Understand Consumer Needs & Preferences
Immediate Next Steps: Assess Operating Environment
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Immediate Next Steps: Explore Alternative Models & Conduct Feasibility Analysis Solicit partner feedback and ideas on alternative
models through inclusive dialogue. Assess pros and cons of various strategies,
including: Core competencies Tradeoff between inclusive vs. non-inclusive
business Costs and risks (e.g. building infrastructure,
holding inventory, credit) Channel conflict Scalability
Conduct feasibility analyses on alternative models proposed, and select one to three based on strategic alignment, feasibility, and impact for the BOP – some experimentation will be needed
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A Few Examples From Our Discussions… Re-Engage SERVIU, public housing
developers, libraries and schools to meet sales goal
Create ‘Placa-Barrios’ or board warehouses in BOP neighborhoods; reduce number of layers in value chain
Include furniture-makers and current BOP customers in value chain
Identify alternative existing distributors (i.e. semaneros) and housing savings committees through Banco de Desarrollo
Imitate Venezuela’s school-based training model
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Our Recommendation on a Feasible Model Focus on reaching out to existing BOP
customers and distributors through current retail channels
Shift idea of Masisa’s value add from furniture to core competency – boards and access to services
Enable BOP customers to gain design and technical skills to design and build high-quality furniture to sell to higher income segments
Work closely with retail channel to improve BOP customers’ access and buying power
Recruit partners to extend credit, encourage savings, manage training, and form cooperatives and sales forces
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Project Value
To Haas Team: Working with an
established CSR leader Exploring an exciting
emerging issue Experiencing the
challenge of global business
Learning from a welcoming, engaged, open-minded, international client
C’mon… Chile?
To Masisa: Forum to ask tough
questions… and get honest answers
Initiating important new dialog with and increased feedback from stakeholders
Receiving a thorough performance assessment and actionable recommendations
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Conclusion: A Promising Start… Understand that it will take time to
build civil sector partnerships Take some risks and innovate Stay committed!
Masisa’s 10% goal is ambitious… … But a strong commitment from
management and partners presents a real opportunity to make a lasting contribution to poverty reduction in Chile.
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THANK YOU!