Taking Stock of MAP’s Portfolio

Agenda/ActivitiesObjective: To accelerate the breadth and depth in all systems targeted by MAP to catalyze inclusive growth

Activities:1. Take Stock of Progress to Date:

Review MAP current offers to market actors Compare expected with actual results to date Prepare timeline of major changes in MAP offers over time

2. Formulate a Scale-Up Plan for the next 12 months Assess strength/weakness of key drivers required for scale Identify strategic options to accelerate scale up Set targets for more system breadth and depth

Getting an effective facilitator’s offer Basic Principles

FRAMING AN OFFER RATIONALE

1. WHO IS IT AIMED AT?• Core• Support Function• Rules

• Leverage Point in System

2. WHY SHOULD SOMEONE WANT WHAT WE’VE GOT? • A compelling business case for upgrading

• Growth driven by customer value

3. WHAT COULD THEY EXPECT TO GET?• Buy Down Risk• Better, Faster, Smarter

• First mover advantage

4. WHAT DO WE EXPECT TO GET IN RETURN• Evidence of benefits of system

improvement• Better, Faster, Smarter

• Constant upgrading as system norm

Selecting Market Actors

Momentum Potential2. Indicates support for/or resistance to desired change

3. Indicates competence 4. Indicates influence onbroader system change

Leverage Potential1. Point for achieving large-scale change

WILL

SKILL

high

high

low

low

Capacity problem?

Incentive problem?

Why aren’t they doing it

already?

Can’t avoid them?

Why aren’t they inluencing the

system ?

HIGH WILL | LOW SKILL HIGH WILL | HIGH SKILL

LOW WILL | LOW SKILL LOW WILL | HIGH SKILL

What is the focus of MAP’s offer of support?

WILL

SKILL

high

high

low

low

Capacity problem?

Incentive problem?

Why aren’t they doing it

already?

Why work with them?

Build ability to operate outside current comfort

zone

Reduce incremental risk associated with

change

???

Why aren’t they influential in the system?

Work beyond partner to

address external obstacles

What actors get?1. Less risk while

learning2. More, faster

learning & linkages

Why want our support?1. Advance their

strategy2. Create customer

valueWhat do we get?1. System Pressure

for Upgrading

2. Information for decision making

MAP’s Offer to Ag Input Retailers/DistributorsMAPS Offer to Ag Input Market System

FRAMING AN OFFER RATIONALE

1. WHO IS IT AIMED AT?• Agro Retailers/Distributors

• Retail function a leverage point

2. WHY SHOULD SOMEONE WANT WHAT WE’VE GOT? •New business model with sales and services

• Advance their growth strategies• Growth thru customer value

3. WHAT COULD THEY EXPECT TO GET? • Buy down first mover risk (time + resources)• Knowledge and Skills

• First mover advantage• Business management skills• Solution Seeking Reputation

4. WHAT DO WE EXPECT TO GET IN RETURN• Profile of early adopter• Information to adjust offer

• Evidence of benefits of change• Knowledge of system drivers for

change

Market Actor Assessment at Program Entry

SKILL high

low

low

HIGH WILL | LOW SKILL HIGH WILL | HIGH SKILL

LOW WILL | LOW SKILL LOW WILL | HIGH SKILL

high• Multiple rural shops -no

services/offers• Stocking a range of brands• No info on consumer needs• Trading experience but no

efficient retail functions – inventory /customer/financial management

• Owner = manager

- Good trading experience- Lacks incentives to invest

in marketing - No engagement with

distributors/inputs firms

We did not encounter any retailer here…

In Makueni, 1 agrodealer – Gistof- Sees farmers as very

poor/lacks interest to market to them

- No previous inputs retail experience

MAP’S INITIAL OFFER TIME

A BUNDLE OF CASH SUBSIDY AND LINKAGES:– 75% cost share 10 promos– 100% support manager salary– 50% cost share for soil testing– 100% inventory management– 100% SMS service integration– 80% motorbike purchase

Retailers Response to MAP Offer Up to Date

SKILL high

low

low

HIGH WILL | LOW SKILL HIGH WILL | HIGH SKILL

LOW WILL | LOW SKILL LOW WILL | HIGH SKILL

highLessons• Delegate tasks to skilled manager• Inventory mgmt system operating• Forecasting next season sales• Incentive systems for staff, stockists, agents, farmers• Strategic alliances (soil testing)• Investing in various distribution strategies

Lessons:• Reducing financing requirements (pre-paid cash flow)• Investing in outreach & and research (promotional events)• Repeat customers and referrals from small farmer market• Confidence in small holder market

Lessons:• Distorted expectations (NGO’s)• Believe small farmers have no cash• No track record in this business (may run other businesses)

Support Services

Lessons:

SKILL high

low

low

HIGH WILL | LOW SKILL HIGH WILL | HIGH SKILL

LOW WILL | LOW SKILL LOW WILL | HIGH SKILL

high

Player: Inputs distributors

Lessons:

- Are in comfort zone – sees no need in shifting operations

Player: Soil testing, Marketing, ICT

Lessons- Strategic alliances working;

soil testing + retailers- Joint co-branding between

retailers + stockists- Retailers purchasing branded

gifts for loyal customers

CHANGES IN MAP OFFER OVER TIMEINITIAL OFFER TO END 2012

WHAT: ONE SIZE FITS ALL; 75-80% SUBSIDYWHOM: AGRO-DEALERS WITH HIGH WILL/LOW SKILLHOW MANY: 2 AG RETAILLINKAGES: 3 SERVICE FRIMS IN SOIL TEST, INVENTORY MGMT, SMS

ADJUSTED OFFER TO MID 2013

WHAT: SAME BUNDLE. AVG SUBSIDY 50% FOR NEW ENTRANTSWHOM: SAME PROFILE OF AGRO-DEALER W/ ONE EXCEPTION—HIGH SKILL/LOW WILLHOW MANY: 2 EXISTING 3 NEWLINKAGES: SAME BUT 2 MORE ICT; 1 INPUTS

SELF-SELECT BEFORE OFFER (TO END 2013)

WHAT: MULTIPLE OFFERS; DIFFERENT BUNDLE; CASH SUBSIDY RANGES FROM 0 – 50%WHOM: RETAILERS OF AG AND AQUAHOW MANY: 9 RETAILERS 8 SERVICESLINKAGES: MORE ICT & MARKETIN FIRMS.

INSIGHTS:BIGGER SKILL GAPS

INSIGHTS:WHOSE PLAN?

INSIGHTS:DEALS WITHOUT MAPANY SYSTEM CHANGE?

Group Task (1)In sector teams:1. Summarize your offer to support to a specific market

system? – Consider all key players you have targeted/worked with

2. What was your assessment of the different type players selected at entry?– Will/skill to foster firm and system change

3. What is your current assessment of those partners selected?– Will/skill to foster firm and system change

4. What do we know about other key system players with whom we are not yet working?– Will/skill matrix to position other key system players

5. What have we learned about our offers over time?– Timeline of key changes in MAP offers over past 20 mths

Drivers of System Change:Competition and Cooperation

What are some patterns of behavior in market systems?

Bad

Best

Better

Bad

Best

Better

Competition

Cooperation

Degree of Market System Effectiveness

LOW

HIGH

HIGH

HIGH

Transparent rulesEmbedded Services

Collusion

Zero-sum tactics Political Favoritism

Joint response to opps. & threats

Norm: Constant upgrading

Anti-compete rules

Joint Marketing

Norm: Constant upgrading

Competitive response internalised

Specialised ServicesInnovation/Differentiation

Inclusive + Durable Growth (based on constant upgrading)

Benchmarking Targets

A.EARLY ADOPTERS

(change works)

B.EARLY MAJORITY

(tipping point)

D.SOLUTION SEEKING

(effective problem ID & solving capacity)

C.ADAPTATION

(better, faster, cheaper)

Buy-in Track Record DeepenRe-investDiversifyExpand

Create More ValueCom

pete

+ C

oop

Pres

sure

Norm for all actors

Nor

m U

pgra

ding

Adop

ter m

eet/

exce

ed

qual

ified

ado

pter

s

BR

EAD

TH

(nu

mb

ers)

LESS

MORE

DEPTH (behaviors + beliefs)

MORE

Inclusive + Resilient Market System GrowthConditions and their Interpretation

A.EARLY ADOPTERS

B.EARLY MAJORITY

BR

EAD

TH

DEPTH

D.SOLUTION SEEKING

C.ADAPTATION

More breadth and depth needed

LESS

MORE

MORE

Systemic capacity to be inclusive and durable

More depth needed

More breadth needed

Group Task (2)1. What has been the system response to MAP’s

interventions?• Is competitive pressure driving more adoption?

– Yes, By whom? By Whom. No, Why• Is cooperative pressure driving more adoption

– Yes, By whom? By Whom. No, Why

2. What do you see as the strategic options to advance MAP goals of inclusive + resilient markets?– More of the same offer but better, faster, cheaper– New offers to new players in same or different function

3. Rank options against relative importance and resource use– Set breadth and depth targets.

17

Strategic Options:1. Same function/players2. Different functions/players3. Some Combination

Creating More System Pressure for Inclusive Growth

Implications for MAP1. Setting Targets2. Sector/Cross Sector Teams3. Monitoring/Adjusting4. Resource (Time + Money)

Demand Supply

SUPPORTING FUNCTIONS

RULES

InformationServices

Infrastructure

Informal rules & norms

Laws

Standards

Regulations

CORETARGETED SECTOR

Coordination

Inclusive + Resilient Growth (CONTINUOUS UPGRADING)

Benchmarking Targets

A.EARLY ADOPTERS

B.EARLY MAJORITY

BR

EAD

TH

(nu

mb

ers)

DEPTH (behaviors)

D.SOLUTION SEEKING

C.ADAPTATION

Create More Customer Value

Com

petiti

ve &

Coo

pera

tive

Pres

sure

Norm for all actors

Nor

m U

pgra

ding

LESS

MORE

MORE