CASE ANALYSIS: INDIEKRAFT VILLAGE

CASE OBJECTIVE

• To create a new business portfolio focused on Product and services mix being socially responsible, economically sustainable and generate value to the community
• Connecting rural India to Urban & Global markets
•  Participation of customers / tourists to village's economic, leisure and educational activities

BUSINESS MODEL:

A.    SWOT ANALYSIS 

   

STRENGTH -        Presence in all Indian major cities -        Presence in Middle east, Europe & North America -        Online retailing facility -        links over 50,000 craft based rural producers to modern urban markets -        Existing POC (producer owned companies) model -        Existing customer base -        Strong value foundation of responsible development and inclusive capitalism	WEAKNESS -        Acquiring new skills and competencies for customer service -        New entrants to hospitality & service industry -        Infrastructure  availability/ logistics
OPPORTUNITY -        Untapped niche segment of tourism -        Latent need of the customer to visit the rural Indian community, to learn traditional lifestyle, crafts and culture -        Untapped and  large no  of authentic non traditional rural areas in India -        Demand for eco tourism	THREAT -        Acceptance of the new business portfolio for the community -        Acceptance of the artisan & craftsman -        Impact on environment -        Competition may enter market -        ROI

B.    PESTN ANALYSIS

POLITICAL:  The rural craft Industry and development of Indian crafts and culture is supported by Government through various ways as this contributes to village economy.

ECONOMIC:   

-        Rising Interest of International communities on India being the emerging economy in the world.

-        Increase income groups of middleclass Indian population creates an opportunity for domestic tourism

-        Increasing global business opportunities for Indian crafts

SOCIAL:

-        New segments of Customers interested in visiting and the rural communities that produce various crafts to experience the authentic Indian culture

-        Growing aspirations of artisan and craftsman towards new lifestyles

-        Improving awareness and education

TECHNOLOGICAL:

-        Increasing Global connectivity through internet, and increase in online marketing.

-        Availability of technology to enhance the quality of village produce

NATURAL:

-        Most of the village artisans live in natural environment and a simple life. While the global environment is deteriorating, the fresh, unpolluted and healthy environment of rural India attracts tourism.

3.     STRATEGY :

Establishing IndieKraft Village:

                

To begin with Model IndieKraft Village will be started in 5 regions in India (South, North, East, West, and North East)

An IndieKraft Village will be created taking 5 to 10 villages as a cluster which is primarily engaged in designing traditional Indian crafts like traditional apparel, home products, organic personal care products etc.  The cluster consists sizable number of professional artisans.

Building Stakeholders:

IndieKraft will build 10 fully furnished rooms in each IndieKraft Village. One of the artisans will be assigned as Mukhia of the IndieKraft Village, who will be taking of the tourists, which shall consists of trekking around the village, and making the tourist familiar with the culture and the major occupation they are involved with etc. The tourist will also be given hands on experience on the occupation for holistic experience.

POC (Producer owned Companies) will be responsible for development and maintenance of the IndieKraft Villages. They would also be responsible for end to end logistic arrangement between the closest arrival points to the IndieKraft Village.  POC also will undertake projects of social in nature to build sustainable environment and building the skills and talents of the artisans and villagers.

         

IndieKraft would play the roll of packaging the tour, strategizing the facilities with POC and artisans and market the entire initiatives to the international and domestic tourists. We will also ensure continues feedback from customer about quality of services and their experience. It will also set standard operating procedures for POC.

IndieKraft will tie up with Local hospitals/Health professionals, Police station around IndieKraft Village in association with POC for emergency medical assistance, security etc. In this process IndieKraft would also develop the infrastructure requirements which will benefit the inhabitants of the villages. 

CASE DISCUSSION:

1. Draw out the three year Road-map for Ashish, identifying critical milestones for   this Venture as well as critical capabilities that the company should develop?

Sl.	CRITICAL MEASURES	YEAR 1	YEAR 2	YEAR 3
1	Growth in sales ( Annual) (%ge)	0%	65%	118%
2	Gross revenue for IndieKraft Village	125,000,000	206,250,000	450,000,000
3	Total Expenditure	62,500,000	61,875,000	135,000,000
4	Gross Profit	62,500,000	144,375,000	315,000,000
5	Gross Profit for IndieKraft Village	18750000	43312500	94500000
6	Gross Profit for POC	25000000	57750000	126000000
7	Earnings for Artisans	18750000	43312500	94500000
8	No of Indiekraft Villages	10	15	30
9	%ge contribution by different categories of customer (Domestic/International)	1:1	1:1	1:1
10	%ge contribution towards developmental activities	25% of POC	25% of POC	25% of POC
11	%ge expenditure on Infrastructure development	50% of POC	50% of POC	50% of POC
12	Occupancy days of IndieKraft villages	250	275	300
13	Customer satisfaction index	***** Ratings	***** Ratings	***** Ratings
14	No of Green initiatives	1	3	5
15	Skill competency develoment	Serivice and quality standard :  100%	Serivice and quality standard :  100%	Serivice and quality standard :  100%
		Language : 50%	Language : 75%	Language : 90%

* No of Indiekraft Villages: 10, Room per village: 10

* The projected revenue is based on an average of Rs 2500/- per day per person occupancy applicable for Domestic & International tourist

2. What would it take for the model to become self sustaining and emerge as a viable proposition?

-        Sustaining the interest of the customer by meeting the customer expectations

-        Building a strong linkage between the local village community and the tourists  by following ways;

-        Hands on experience of the craft

-        Creating miniature items of the crafts as memento

-        Tree plantation by each tourist as a memory

-        Utilizing the special skills and talents of the tourists for benefit of villagers, schools through experience sharing

-        Building relationship with schools in urban areas and corporates can ensure continuous earnings through sustained occupancy of the infrastructure created.

-        Actual increase in the earnings for the artisans

-        Protecting the environment by creating awareness  and green initiatives like solar power lights

-        Continuous training for artisans & POCs for maintaining the quality and service standard and infrastructural facilities.

-        Promoting the village and community through different channels and platform like road shows, online retailing , travel agents etc

-        Reinvesting a portion of profit of POC in infrastructure and other developmental activities

3. How many people can this venture of IndieKraft impact in the first three years? How can the model be made scaleable?

     

No of People Impacted	YEAR 1	YEAR 2	YEAR 3
Villagers/Artisans	5000	7500	15000
Staff	100	150	300
Tourists	50000	82500	180000
Others ( Vendors, Agents, Support services like Hospitals etc )	100	150	300
Total	55200	90275	195600

 Model to become scaleable:

-        The no of tourists can be taken based on expansion of number of indiekraft villages

through different packages

-        Increasing the infrastructure facilities like rooms in indiekraft villages

-        Replicate the model in other country which is rich in traditional crafts.

-        Increasing the no of points of sale of a new product service mix

-        Building continuos competence of the staffs and artisan to provide superior experience to the customer.

-        Tie up or acquiring  other small & medium enterpreneur offering similar tourism experience to the domestic and international tourists.

-        Build a indiekraft family/network for long term relationship with all the stake holders

-        Review each initiative/activity / indiekraft villages every year and built internal capability  through training.