Living with the dream

“Last time I had visited here five years back, while in the Final Year of MBA. Nothing has changed much except the life style.” I was murmuring myself while seating at Sunset point in Mahabaleswar and thinking about those days….

DAY -1

“Let’s go for trekking tomorrow”. All of a sudden I had proposed the idea while solving the case study at 5 pm in the classroom No-402.

“What the hell???” Priya screamed.

“We are struggling here to solve the case and you are giving some stupid idea.” (A big pause)

“Hmm but its not a bad idea…” Priya laughed.

“Please guys we have to complete this case by 7 pm and give presentation to Prof Maru. please be serious.” Rahul commented while working out in excel. “What the amazing tool, just got the clue. Great dude?”

“Yah, I am ... Hahaha…” Shilpa laughed.

Rahul stared at shilpa and replied “Cooool it’s over; I am in for the trekking.”

“What is going to be the benefit to the customer and what will be the ROI after 3 Years? Is it sustainable?”  Everyone looked at Rohit.

Rohit reiterate “Guys just look in to the case. We are showing a profit increase of 50 % and a sales increase of 85% by re structuring of Highvalue retail chain.There is no where we are talking about sourcing and managing of resources.  How do we sustain the growth like this? Rahul, can you workout for some fund for strengthening backward integration chain”

It was a big silence and all started thinking about the case “Building Indian Walmart: Transformation of Highvalue retail chain”. Atlast we managed an excellent case study analysis and by 11:30 pm, we were free from the classroom.

DAY-2

Morning at 3 am Rohit called me up and asked for the trekking plan.

“Now??? Dude are you crack?”

“Ajit, nothing can be more adventurous than this… Pack up”

Within 15 minutes we make everyone ready for trekking. It was the craziest decision. We started our bike and headed towards Mahabaleswar.

“Wow!!! What a beautiful morning, so fresh and look at the sky so clean. It seems we are the only living animals in this world...” Priya screamed while laughing.

Others joined with the spirit “We are free”

After parking our bikes we all started walking with the tunes from the movie “Dil Chahata hai…”

  

We had not been for any outing since last 3 months due to classes and exams. Again the Placement season scheduled after one month. After placement there are projects, seminar, final exam etc were lined up. May be it was the last time we all were going out together for a trekking.

 “Dil chahta hai… Hum Na Rahein Kabhi Yaaron Ke Bin...” Rahul started singing

Everyone joined in.

“Can we really make an Indian Wal-Mart?” Rohit asked for a serious discussion. We all started discussing while walking. It was fun with all type of crazy ideas coming in mind. Almost we executed a business plan. Followed by Lots of gossips, PJs, serious discussion, jokes etc we didn’t realize how the day got over.  We returned in the evening.

From next day onwards again all of us were busy with routine life.

During campus placement we all got placed and after few months joined the job. Afterwards hardly there was any time to meet each others.

After almost 4 years, I received an invitation call from rohit to attend his engagement at Mahableswar. After I reached there i found Rohit successfully running a well established strawberry farm with a retail chain and lots of new things in pipeline. I was so happy and couldn’t believe what he was doing…I realised this was all discussed during our trekking and afterwards all had forgotten. But he believed in building Indian Walmart and living with the dream.

As some one quoted “Dreams are like stars...you may never touch them, but if you follow them they will lead you to your destiny.”

“Let’s jump from here”

I looked behind and saw Priya with all other guys running towards me.

“Ohhh no… You are Still....…” I shouted     (To be Contd.)

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.

CASE ANALYSIS: MERIDICOM VS TELZIP

MERIDICOM: The largest telecommunications player in the country with business segments spread into Broadband, Landline & Mobile network services.

TELZIP: A small mobile network operator with current market segments in Landline and Mobile network services

MARKET SHARE DISTRIBUTION:

PROBLEM STATEMENT:

·       TelZip, strategies to break into new markets i.e Broad band service provider, by offering free broadband service to business customers who were willing to leave their current service provider and enter into a long-term contract.

·       TelZip published an advertisements “Free broadband forever with TelZip! Save at least €450 a year when you switch from Meridicom!” A direct threat to Meridicom’s Broadband business by targeting Business customers.

·       Lack of common goal and integration among business units of Meridicom

PROBLEM ANALYSIS:

Providing Free Broadband connection by Telzip can kill the broadband market share of Meridicom, which in turn will capture the market share of Landline as both the services are equally demanded by Business customers. This transition will take some time.

Other customer segments (Individuals, young population, students etc) will choose the broadband of Telzip for free and will switch faster to TelZip. Simultaneously they may opt for Landline and mobile services with a good packaged deal from TelZip.

The 25% Mobile market share of TelZip will obviously opt for the broadband services in first phase, which will impact directly on Meridicoms Market share of Broadband.

COMPETATIVS ANALYSIS

Considering the medidicom and Telzips services under BCG matrix, it is found that Meridicom is in an extremely better position. But Telzips foraying into Broadband services with Free broadband can make a shift change in the matrix. Hence Telzips threat cannot be taken lightly as done in the past.

BUSINESS SOLUTION:

Considering the experience of Meridicon in tackling business competition in past and still maintaining itself as a Market leader in Broad band services, the direct threat from TelZip can be looked as an opportunity to address the Weaknesses(refer SWOT analysis of Meridicom) to take a combine business decision to be maintained as a leader.

ACTION POINTS FOR MERIDICOM:

OBJECTIVE:

-        FOCUS ON MARKET SHARE ON YEAR 1

o   To sustain the existing market share and customers

o   25% growth in market share in Mobil network services, 10% growth in Broadband & 5% Growth in Landline in a Year.

BUSINESS UNITS	CURRENT YEAR		YEAR 1
	MARKET SHARE	REVENUE CONTRIBUTION	MARKET SHARE	REVENUE CONTRIBUTION
LAND LINE	85%	70%	90%	70%
BROADBAND	60%	25%	70%	25%
MOBILE	5%	5%	30%	5%

-        FOCUS ON REVENUE AND PROFITABILITY ON YEAR 2

STEP-1: IMMEDIATE ACTION (Within 15 Days)

-        Role out an campaign to emphasis on Strength (Quality,Trust, Brand value). Communicate to existing customer for feedback on services and potential improvements.

-        Integrate the customer service and the billing system as a single window services for customer convenience.

-        Bring a new Profit sharing formula for the benefit of all business Units.                                              

Incentives to be based on : Corporate performance(50% weightage)+Business Unit performance(30% weightage)+Individual performance(20% weightage)

o   In case one business units( say Mobile Unit) will have to compromise in pricing for business advantage, the profit made by other business units( Land line & Broad band) will be considered as a notional profit by the unit (Mobile Unit) for incentive calculations for Mobile unit also.

STEP-2: (Within 1 Month)

-        Considering the market share vs revenue contribution of different business Units also considering the potential 25% of the mobile customers of Telzip, who are going to move first towards Telzip broadband, launch a discount scheme on Mobile services.

-        Provide following schemes to customers:

-        “Fixed rate unlimited Mobile services to customers for the first One Year, 10% Discounted rate on second year onwards”

-        Free Mobile services for one year, 10% discounted rate on second year onwards to individual households/customer having Meridicom Landline and Broadband connection.

-        50% Discount on all services between 10 pm to 10 am.

-        For Business customers provide “Free Mobile services to business customers having Meridicom Landline and Broadband connection.”

-        Business Houses who opted for 200 connections, No upfront fees. Per Month a fixed amount to be charged. Every user will get certain free usage.

This is expected to capture the Mobile market share of TelZip and maintaining the market share in Broadband and landline. It will cost only the 5% of the revenue in the first year that Meridicom gets currently from Mobile services. But it will add on the revenue from Broadband and landline business Units and increase market share in Mobile network services.

STEP-3: (Within 1 Year)

-        Continuos improvement in customer services and Technology:

o   offers broadband on DSL,IPTV dedicated enterprise services

o   IP based services like high-speed internet access, video-on-demand services

o   value added services including mobile money, mobile health, etc besides offering regular mobile and fixed line telecom services

-        Focus on quality of subscribers

-        Cash 10% of profits to sustain investments

To sustain the market leadership, continuously review the performance of each services, balance sheet and review markets and customer feedback.