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What is an inclusive business?
ADB-IDB Inclusive Business Workshop
9:45 a.m. 10:45 a.m., Tokyo, Feb-Mar 2013
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In this session well focus on the questions below
WHATISANINCLUSIVEBUSINESS?
WHYSHOULDLARGECOMPANIESCHANGETHEIRBUSINESSMODELTOBECOMEMOREINCLUSIVE?
WHATARETHECHALLENGESTOINCLUSIVITY?
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What is an inclusive business?
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Are these inclusive businesses?
Source: Coca Cola case study from the Global Compact Network and Kennan Institute Asia; Nike case study courtesy internet med ia reports; Nestle case study courtesy ADB market scoping; Dalberg
research
Coca Cola is a major consumer of water
resources in Vietnam, leaving it open to
criticism, consumer boycotts and brand risk
Coca Cola invested USD 100,000 in the
Clean Water for Communities project to
provide clean water access to schools and
communities in 3 Vietnamese districts
The project resulted in a more positive
brand image for Coke, and broadly positive
press coverage
The project also provided access to clean
drinking water to 10,500 students and 1,000families
Now with the clean water project, we benefit
from clean qualified water. We are so happy; we
can use it directly for cooking and drinking.
There are two fountains, one for cooking and
drinking and another one for cleaning.
Beneficiary villager in Dao Xa Village
Nike experienced hyper competition and
falling demand, causing significant pressure
to increase margins through cost savings
As a result, Nike decided to sub-contract
product manufacturing to secondary
manufacturers in emerging markets such as
Cambodia and Vietnam
Benefits to Nike included cost savings due to
reduced wages, as well as reduced capital
expenditures
Low-income workers receive employment,
and small businesses get integrated into aglobal supply chain, resulting in higher
quality and standards
25% ofNestles global revenues depend on
coffee exports from Vietnam; investing in
capacitating coffee farmers is imperative to
secure a steady and robust supply of beans
Nestle directly purchases coffee beans from
farmers; additionally, to increase farmer
retention, Nestle provides important
technical training and assistance to promote
sustainable agriculture
Nestle was able to expand its supplier base,
and secured the supply of high quality beans
Benefits to the farmers included higheryields, better prices, and increased access to
training and finance
COCA COLA NIKE
The facts on the ground suggest there are still
enormous problems with these supply chains
and factories ... what is Nike doing to change the
picture and give workers more rights?.
Michael Posner, Human Rights First
NESTLE
Nestles plans, [of] improving post-harvesting
techniques like drying, are a good step in
promoting economic stability. If these are
addressed successfully, then the investment could
be very positive for Vietnamese coffee producers.
Pablo Dubois, International Coffee Organization
CORPORATE SOCIAL RESPONSIBILITY OUTSOURCING INCLUSIVE BUSINESS
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What are inclusive businesses?
Source: 1ADB definition of BoP; Dalberg research
PROFIT-MAKINGBUSINESSESTHATENGAGETHE BASEOFTHE PYRAMID (BOP) AS
SUPPLIERS, EMPLOYEES, DISTRIBUTORSANDCONSUMERS, INAMANNERTHATRESULTSINA
MEASURABLEIMPROVEMENTINLIVINGSTANDARDSOFTHOSEPOPULATIONS,
CONTRIBUTINGTOASYSTEMICREDUCTIONOFPOVERTY.
DEFINITION
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Who are inclusive businesses attempting to include?
BOP
USD 4/day or
less
TOP-TIER
BOP ISDEFINED1ASTHELARGEST, BUTALSOTHEPOORESTSOCIO-ECONOMICGROUPIN
THEWORLD, COMPRISINGINDIVIDUALSEARNING USD 4/DAYORLESS.
BASEOFTHE PYRAMID
Source: 1ADB definition of BoP; Dalberg research
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What does it mean to be inclusive?
Source: Dalberg research and analysis
Inclusive models seek to engage BoP actors across the business value chain in a manner that generates
positive financial and social returns
SUPPLIERS
EMPLOYEES
DISTRIBUTORS
CONSUMERS
1
2
3
4
VALUECHAIN FORTHE BUSINESS FORTHE BOP
Transparent, reliable supply chains
Cost savings due to local sourcing
Jobs and income
Stable prices for products
Training and skill development
Supply of talent at lower cost thanexists in developed wage markets
Secure, safe jobs and income Opportunity for social mobility,
where possible
Cheaper, more flexible, more
responsive distribution chains
Secure jobs, increased income,
better livelihood opportunities
Additional markets and revenue
streams
Increased access to safe, innovative
and affordable products
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How do you make businesses inclusive?
Source: Icons from www.thenounproject.com
MANUFACTURING
/ PRODUCTIONPROCUREMENT CONSUMERSLOGISTICSANDDISTRIBUTION
MARKETING /
AWARENESS AFTER SALES
Can we buy directly from local BoP
suppliers? Can we help increase vendor capacity by
investing in training?
Can we provide/facilitate access to finance
to vendors?
Are there non-traditional actors that can
help in raising awareness generation andmarketing efforts (E.g. government, civil
sector, NGOs, etc.)?
How do we use technology to provide better
aftersales support to the BoP? Can we work with BoP entrepreneurs to
help with aftersales support and consumer
feedback?
How can we optimize energy usage?
How can we build employee capacity by
investing in training and professional
development?
How can we customize benefits to suit low
income employees?
How can we minimize any negative impact on
the environment?
How do we provide access to information to our
logistics partners to help them become more
efficient?
Are there local networks that we can tap into
and develop for transportation and distribution?
Can we reorganise the business to enable work
with small orders/inventory sizes?
How do we make products more affordable?
How do we provide financing to BoP
consumers who cannot afford high up front
payments?
How do I ensure effective tailoring of
products to suit the BoP needs?
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Inclusive businesses are different from existing businesses
1Positive externalities encompass impact measure along Human Development Indicators
Source: Dalberg analysis and research
Market
returns
Below
market
Above
market
returns
Low HighPositive externalities 1
Inclusive
business
Mainstream
business
Large businesses can generate profit and
impact poverty by accessing new markets,
adapting products for BoP & reconfiguring to
an ethical, greener, more efficient supply chain
Social enterprise
Social enterprises and small
businesses seeking longer term and
scalable impact can better attract
capital and grow with a focus on
financial sustainability
COMPARINGDIFFERENTTYPESOFBUSINESSESACROSSMARKETANDSOCIALRETURNS
Market returns on the X-axis; Social returns on the Y-axis
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and also differ from CSR initiatives
Source: Dalberg research and analysis
Effective management of economic, social and
environmental impact
Brand-building and risk management
Employee and customer engagement
Investor relations
Profitability and long-term sustainability,
taking into account social and environmental
concerns
Engaging in new markets with a license to
operate
Does not generate any direct financial returns
Requires consistent on-going funding
Inclusive businesses aim to meet or exceed
cost of capital
Each activity is specifically designed to
generate social impact
Impact is limited by scale of investments and
donations
Social impact may be the objective, or simply
an outcome of the business activity, but must
be explicitly measured
Impact is achieved by scale which is directly
related to the success of the business
PURPOSE
FINANCIALRETURNS
SOCIALRETURNS
CORPORATESOCIALRESPONSIBILITY INCLUSIVEBUSINESS
A pharmaceutical company that donates
medicines to the government for
free/subsidized distribution to BoP
communities
A pharmaceutical company selling medicines
in affordable unit sizes, utilizing community
health workers to reach BoP populationsEXAMPLE
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Why should large companies change their business model to become more inclusive?
B b i i l i ki ith i t l 57% ( 3 9B
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BECAUSE being inclusive means working with approximately 57% (~3.9B
people) of the worlds population that otherwise remains poorly engaged
35%
65%
PRESENCEOF BASE OF THE PYRAMIDPOPULATIONS1INTHEWORLDIN 2012 (ESTIMATES)
Population in millions; Top-two countries in each region; Poverty line in 2005 PPP
Source: World Bank PovCalNet analysis tool accessed on 11 February, 2013; Dalberg research
EAST ASIAAND PACIFIC (BOP: 1251M)
Non - BoPBoP
88%
12%
EUROPEAND CENTRAL ASIA (BOP: 54M)
35%
65%
MIDDLEEASTAND N.AFRICA (BOP: 175M)
10%
90%
SUB-SAHARAN AFRICA (BOP: 778M)
68%
32%
LATIN AMERICAANDTHE CARIBBEAN (BOP: 196M)
6%
94%
SOUTH ASIA (BOP: 1544M)
The Base of the Pyramid populations identified here earn USD 4/day or less
Turkey: 13m
Russia: 8m
China: 831m
Indonesia: 217m
India: 1100m
Pakistan: 165m
Nigeria: 159m
Ethiopia: 80m
Brazil: 56m
Mexico: 29m
Egypt: 59m
Iraq: 22.7m
B S th l i k t h b t ti l di
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BECAUSE these low-income markets have substantial spending
power and are growing rapidly
45%
1,580B
34%
21%
Source: Regional market sizes from The Bottom 4 Billion, World Resources Institute (2008); Total household spending and growth from World Bank country-
level data; Dalberg research
REGIONAL MARKET SIZESAND BOP MARKET SHARE
Market sizes in USD billion (2008)
CHINA
INDIA
BRAZIL
USD 4/day and lessUSD 4/day - USD 8/dayUSD 8/day and more
718B
49%
36%15%
66%
974B
13%21%
14%15%
17%
Brazil IndiaChina
GROWTHINCONSUMERSPENDINGINSELECTEDECONOMIES
CAGR (2008-2012)
INDICATIVE
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BECAUSEtraditional markets are getting saturated
1 Figures are adjusted for cost of living variations across countries; only wage earners are counted; average world salary estimated for 72 countries on which
data was collected
Source: ILO; Dalberg research
AVERAGEMONTHLYSALARYACROSSCOUNTRIES1
USD (PPP), 2012
GROWTHINSPENDINGONCONSUMERDURABLES
CAGR
India
(2003-2009)
10%
USA
(1999-2009)
3.8%
3,263
3,065
2,903
2,522
778
609
295
279Philippines
Korea
1,480
India
Mexcio
UK
Japan
USA
Brazil
EMERGING
DEVELOPED
World
average
BECAUSE there are large opportunities in several BoP markets that I
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BECAUSE there are large opportunities in several BoP markets that
businesses can invest in and capitalize across the world
NOTE: Measures here are not comprehensive. Sizing the entire BoP market for impact investments is very difficult; thus only selected businesses within five
sub-sectors were analyzed in the JP Morgan report
Source: Survey of global impact investors and funds, Impact Investments: An Emerging Asset Class, JP Morgan (2010); Dalberg research
INDICATIVE
Housing
790210200190180100
Health
Education
Water and Sanitation
Finance
210 79010 190180 2000
Not measured
POTENTIALINVESTEDCAPITALREQUIREDTOFUNDSELECTED BOP BUSINESSESOVERTHENEXT 10 YEARS
All amounts in Billion USD
POTENTIALINVESTEDCAPITALREQUIRED (BILLION USD) POTENTIALPROFITOPPORTUNITY (BILLION USD)
$ 214B-$ 786B $ 177B-$ 648B
$ 5.4B-$ 13B $ 2.9B-$ 7B
$ 0.4B-$ 2B $ 0.1B-$ 1B
USD 176B
$4.8B-$ 10B $ 2.6B-$ 11B
NOTEXHAUSTIVE
BECAUSE engaging the BoP can spark innovation that not only overcomes
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BECAUSE engaging the BoP can spark innovation that not only overcomes
emerging market barriers
Source: Images from company websites; Dalberg research
SELECTEDEXAMPLESOFINNOVATIONATTHE BOP
PRODUCTS
Problem:
Electricity is expensive for BoP
Supply of electricity is unreliable
for majority of the BoP
population
Innovation:
Products and appliances that are
not dependent on grid
connectivity to operate
Products and appliances that
emphasize energy efficiency, and
entail minimal running costs
Examples include low-voltage
tablets (Aakash), LED lights
(Nokero 200), and refrigerators(GodrejsChotu kool)
SERVICES
Problem:
Up front ability to pay is low
Access to financial services is
limited or non-existent
Innovation:
Pay-per-use models that
prioritize increased access overasset ownership. E.g. Sarvajal for
drinking water, Ecotact for
sanitation
Mobile money platforms that use
local networks and mobile
technology to provide basic
banking services (deposits,
withdrawals, loan payments,
transfers, etc.) to under-coveredBoP. E.g. Safaricoms mPesa in
Kenya
BUT ALSO drives development of products with significant potential in richer
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BUTALSOdrives development of products with significant potential in richer
markets
Source: www.gehealthcare.com ; www.grameenamerica.com ; Dalberg research
LOW-COST ECG MACHINEBY GE
GE Medical Systems developed an
affordable, portable EKG machine
specifically for rural India to overcome
infrastructure and access challenges
The machine costs $2,500, compared to
$10,000 for standard machines in
developed markets
The new product has now been
successfully marketed in developed
markets
MICRO-LOANSIN AMERICABY GRAMEEN BANK
Grameen Bank pioneered the concept of
providing group-based micro-loans to
low-income households in rural
Bangladesh
The group-lending model for small loans
was replicated in urban America by
Grameen America, in 2008
Grameen America has reached 12,500
families and disbursed over USD 60m in
micro-loans
SELECTEDEXAMPLESOFREVERSEINNOVATION
INDICATIVE
http://www.gehealthcare.com/http://www.grameenamerica.com/http://www.grameenamerica.com/http://www.gehealthcare.com/7/29/2019 Dalberg_130214 ADB IB workshop - Introduction to IB models_vF
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BECAUSE markets have begun to reward inclusivity
Source: 1DJSI Review Results, 2012; 2NSE India, S&P equity indices 2012; http://www.ftse.com; Bloomberg; Dalberg research
PERFORMANCEOFGOOD COMPANIESONSUSTAINABILITY INDICES
Y-axis: Total return, USD
INDICATIVE
20
40
60
80
100
120
140
160
180
Jun-07
Jan-08
Aug-08
Mar-09
Oct-09
May-10
Dec-10
Jul-11
Feb-12
Sep-12
DJSI Sustainability Asia Pacific
MSCI Asia Pacific
DJSI Asia Pacific
20
40
60
80
100
120
140
160
180
200
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
Dec-11
Jun-12
Dec-12
S&P ESG India (USD)
S&P CNX Nifty (USD)
S&P ESG India
50
60
70
80
90
100
110
120
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
FTSE All world Index
FTSE4Good Global Index
FTSE4Good - Global
AND FINALLY BECAUSE for many large multinational companies being inclusive is
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ANDFINALLY, BECAUSE for many large multinational companies, being inclusive is
not a choice, its simply good business
1 The Economist (April 2010)
Source: McKinsey Quarterly; www.wikipedia .com; Dalberg research
COSTSAVINGS
EMPLOYEE
RETENTION
Inclusive business practices help build relationships and trust within the local community; this
provides the company with access to local pools of labor that are otherwise hard to find and
work with, enabling the company to save costs in the long run
The pool of qualified talent in developing markets is shallow there is strong demand and weak
supply of capable and skilled employees; losing talent is bad for business as recruiting (to refill
existing positions) and re-training are expensive
Businesses that adopt inclusive practices enhance their reputation and credibility within the
community, and inspire loyalty within their workforce, thereby increasing retention
LICENSETO
OPERATE
Protests and instability in the market hurts business; by taking substantive voluntary steps toinvest in the local environment and community companies can reduce reputational risks and
persuade governments and the wider public to allow business operations without interference or
obstruction
The worlds leading companies expect emerging markets to generate approximately 70% of global economic growth over the next few years1
companies that seek to effectively include underserved populations in these countries in their business models will benefit the most
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What are the challenges to inclusivity?
Companies face two important sets of challenges when trying to engage with
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Companies face two important sets of challenges when trying to engage with
the BoP
EXTERNALCHALLENGES
External factors including inadequate infrastructure and transportation, dispersed consumers, poor access to
information, products and finance, and lack of market information affect business growth and scale.
INTERNALCHALLENGES
Developing an inclusive business can challenge the existing operations, capacities and processes within a
business. This may lead to internal tension and opposition to change.
There are five critical market-based challenges that limit business EXTERNAL
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g
growth and scale
Source: Dalberg research
CHALLENGE IMPLICATIONSFOR BUSINESSES
Limited purchasing power, nofinancial access
Even inexpensive products and services may be unaffordable for the average BoPconsumer
BoP businesses find it difficult to increase capacity or achieve scale (including as
suppliers to other businesses)
Low education, awareness
and skills
Consumer willingness to pay suffers as they there is limited access to product
information, including availability, quality, usability, prices, etc
Suppliers, distributors and retailers may lack the knowledge and skills to deliver
quality products and services, consistently, and cost effectively
Hard to reach Standard distribution models are very costly and ineffective in reaching BoP
populations
Disaggregated, low-quality
supply chains
Procurement is inefficient, with presence of several intermediaries
Procurement is unreliable given poor infrastructure and limited capacity of SMEs
Poor market data andinformation
Businesses know very little about poor peoplewhat they prefer, what they canafford, and what products and capabilities they have to offer as employees, producers
and entrepreneurs
Innovative inclusive business models have tried to address market EXTERNAL
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barriers (1/2)
Source: Internet research; Company websites; Dalberg research
Limited
purchasing
power, no
financial
access
Purchase finance Focus on lowering transaction costs of consumer finance
and provide micro-loans to individuals/groups for small-
ticket purchases
Pay-per-use
Sachet model
Implement alternate payment models in which customers
pay for each use of the product, instead of owning it
Sell product in smaller unit sizes and lower prices
Supplier finance Incorporate B2B financing within IB models that engage the
BoP as suppliers, including trade finance, partnering with
commercial banks, etc.
Low
education,
awareness
and skills
Marketing /
awareness
Partner/co-invest with government bodies, donors, local
bodies to implement awareness and education campaigns
Up-skilling
De-skilling
Invest in technical training / professional development to
fill staffing needs
Disaggregate operations into discrete tasks that can be
performed by low or un-skilled BoP populations
BUSINESSMODELS DESCRIPTIONCHALLENGES EXAMPLES
MEKONG BAMBOO
Innovative inclusive business models have tried to address market EXTERNAL
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barriers (2/2)
Source: Internet research; Company websites; Dalberg research
BUSINESSMODELS DESCRIPTION
Hard to reach
Micro-entrepreneur/
micro-franchise
Partnerships
Increase points-of-sale in hard-to-reach areas by hiring and
developing the BoP as micro-level entrepreneurs andfranchisees
Build linkages with SMEs, rural NGOs and other businesses
etc. that are local to the target market, to leverage proven
networks and systems and reach BoP consumers
CHALLENGES
Disaggregated,
low-quality
supply chains
Direct purchase Purchase directly from BoP producers, and develop their
capacity through training and investment
BoP-owned
cooperative
Third-party
aggregator
Purchase from cooperatives or other apex organizations of
BoP producers, and collaborate with them to improve /
increase production capacity
Purchase from intermediaries that aggregate supply from
BoP producers
Poor market
data and
information
Various Emphasize establishing linkages and relationships with local
individuals and organizations in the business model, in
order to gain context and key market information.
EXAMPLES
Sarvajal uses a PAY PER USE model to provide low income and rural
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WHATWASTHEPROBLEM?
Rural access to clean drinking water is very poor, leading to a vast majority of all diseasesin India; Sarvajal wanted to develop a low-cost, market-based solution to increase access.
HOWWASITSOLVED?
Sarvajal used a franchisee-based model in which village-level entrepreneurs operated
solar-powered water purifiers for community access to clean drinking water
Community members used a pre-paid card to buy water from the entrepreneur; the card
is re-chargeable via the mobile phone
WHATWERETHEOUTCOMES?
Sarvajal supplies clean drinking water to more than 150 cities, towns and villages in
India at Rs. 0.25 0.50 per liter
Sarvajal has provided employment and income-generation opportunities to water
entrepreneurs in Indian villages
WHATWASLEARNT? Challenges of operating in rural environments can be overcome by innovatively and
effectively incorporating technology into the business model, e.g. for cashless payment
and re-charge, for aftersales servicing and quality monitoring, etc.
Identifying high-capacity entrepreneurs/franchisees is difficult and can often make or
break the business
Sarvajal uses a PAY-PER-USE model to provide low-income and rural
communities access to safe and clean drinking water
Photo courtesy www.images.google.com
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WHATWASTHEPROBLEM?
Guangshas construction workers were poorly trained, which led to a number of costlyon-site accidents
HOWWASITSOLVED?
Guangsha created free-tuition vocational schools at each construction site of more than
50,000 meters
Semi-permanent day laborers are required to pass four training exams in order to get
official Guangsha contracts
Training certificates are only valid for one year and must be renewed annually or at thestart of each project, whichever is sooner
WHATWERETHEOUTCOMES?
In 2005, Guangsha had net profits of $19 million and an output value of $670.7 million
90% of students receive training certificate on their first attempt
WHATWASLEARNT?
Providing training for BoP employees can reduce costs, mitigate risks, and improve
employee retention
Training programs for BoP employees often require large upfront investments (e.g.
Guangsha invested $3.65 billion to start schools)
Guangsha Construction invested in UP-SKILLING its workers in China
Photo courtesy www.images.google.com
Nestle established a network of MICRO-DISTRIBUTOR FRANCHISEES to expand
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WHATWASTHEPROBLEM?
Nestl could not reach BoP consumers because its typical distribution model using a full
truck would not work infavelas with narrow streets
HOWWASITSOLVED?
Nestl identified a network of distributors and micro-distributors who would buy
products and assemble assortments appropriate for distribution to micro-retailers in
favelas
Distributors also assembled pre-packaged kits for direct sales to families in their homes,
using trusted direct sales agents from local communities
WHATWERETHEOUTCOMES?
Nestl increased sales among BoP consumers infavelas
Nestl created jobs by recruiting informal workers to become direct sales agents and
micro-distributors
WHATWASLEARNT?
BoP can be effective distributor of products to hard to reach communities
Hiring local staff (e.g. direct sales agents) with relationships of trust within the
community can increase direct sales to BoP consumers
Nestle established a network ofMICRO-DISTRIBUTORFRANCHISEESto expand
their reach among the urban poor in Brazil
Photo courtesy www.images.google.com
Intel partnered with the Government of Vietnam to SPREADAWARENESSAND
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WHATWASTHEPROBLEM?
Intel wanted to increase penetration of its low-cost laptops within low-income
households in Vietnam
Poor awareness of IT and IT products among low-income households in Vietnam
HOWWASITSOLVED?
Intel worked with the Vietnamese Government to increase awareness of information
technology through programs on digital literacy, and by working directly with schools,
hospitals and offices, and by targeting small businesses and farmers in rural areas
WHATWERETHEOUTCOMES?
Intel provided more than 100,000 affordable PCs to young Vietnamese people via a
government program
Increased technology access and IT awareness in more than 200 community centers
Adoption of Intel provided laptops in schools, hostpitals and government offices
WHATWASLEARNT?
Working with the Govt can be an effective means of encouraging product adoption,
while increasing awareness of potential benefits
Working with the Govt can open new doors to working with local product/service
providers, banks, etc .
EFFECTIVELYMARKETits affordable laptops within target populations
Photo courtesy www.images.google.com
Starbucks secured its supply of quality coffee beans in Latin America by
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WHATWASTHEPROBLEM?
Consumers demand coffee with various combinations of the following characteristics:high quality, sustainable production, fair trade, traceability, and improved social
conditions in farming communities.
HOWWASITSOLVED?
Starbucks created the C.A.F.E. practices, which guide farmers to produce higher-quality,
environmentally friendly, sustainable coffee
Conservation International and other agencies help farmers implement C.A.F.E. practices Starbucks commits to purchase coffee from farmers who have a sufficiently high C.A.F.E.
score
WHATWERETHEOUTCOMES?
By fiscal year 2007, Starbucks made 65% of its purchases from C.A.F.E. approved
suppliers and hopes to increase that percentage to 80% by 2013
WHATWASLEARNT?
Even without greater interaction, a commitment to purchase can serve as a powerful way
to engage BoP suppliers
Consumers in developed countries are increasingly interested in products that engage
the BoP in sustainable ways
Starbucks secured its supply of quality coffee beans in Latin America by
PURCHASINGDIRECTLYfrom smallholder farmers, and by investing in training
Photo courtesy www.images.google.com
Companies face two important sets of challenges when trying to engage with
h
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the BoP
EXTERNALCHALLENGES
External factors including inadequate infrastructure and transportation, dispersed consumers, poor access to
information, products and finance, and lack of market information affect business growth and scale.
INTERNALCHALLENGES
Developing an inclusive business can challenge the existing operations, capacities and processes within a
business. This may lead to internal tension and opposition to change.
Companies need to be internally aligned around key elements of
h i l i b i i
INTERNAL
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the inclusive business opportunity
Source: Dalberg research
INCLUSIVE
BUSINESS
Ensure leadership
recognizes the value
of a broader set ofreturns from an IB,
and is committed to
a long term horizon
with respect to
investment and
impact
LEADERSHIP
Identify a social
need that intersects
with the companys
core capabilities,
and that can
generate an
acceptable rate of
return
BUSINESS
OPPORTUNITY
Ensure that all
sources of value are
identified andmeasured, and right
expectations are set
on time horizons
and incentive
structures
BUSINESS
CASE
Seek out
opportunities for
leveraging localproduct, services
and talent often via
key partnerships
RESOURCES
& CAPACITY
Understand and
manage local
perceptions andregulations; dont
over promise
RISK
Measure and
monitor
performance acrosspredefined financial
and social metrics
MONITOR /
EVALUATE
STRATEGY EXECUTION
There are some critical questions companies should ask
th l b f i ith B P k t
INTERNAL
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themselves before engaging with BoP markets
Source: Dalberg research
Is the senior management fully invested in the inclusive business opportunity, including
support for innovation and long-term view on profitability?
What are the core capabilities of the existing business that match to important BoP
needs and gaps?
Can we partner with the right organizations/networks to gain market knowledge,
access to supply chains and expertise, and to develop any additional skills, capacity
necessary to operate the IB?
Does the business plan incorporate a long-term view on profitability and include new
performance metrics and incentive structures aligned to the IB?
Are there any risks to the existing business (brand, reputation, product cannibalization)
arising from the inclusive business opportunity?
Leadership
1
Business
opportunity
2
Resources and
capacity
3
Business case
4
Risk analysis and
mitigation
5
Monitoring and
evaluation
6 What are the best and most transparent ways in which to collect and analyze data on
the predefined financial and social performance metrics, so as to effectively capture
and convey the broad range of IB impact?
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End of Session
Questions?
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