Sunday, December 22, 2013

CAN THE DEERS BE THE KING OF THE JUNGLE ?


There was a Jungle with lots of animal staying inside and many migrating from different other places in search of food and becoming a part of the jungle. Since many years the jungle was declared as a democratic place and mainly ruled by the two families of Lions and Tigers based on the support from the other animals. The wolves were the main followers of these two families and depend on the sides they choose to be, the respective families gets the crown of the jungle. Since last ten years it was the lions ruling the jungle.

Over the years the ruling families got out of touch with the other animals of the jungle and relied on the wolves in running the day to day administrations. The wolves started behaving as lions/tigers of the jungle and started taking advantage of the power endowed on them in harassing the poor animals. Slowly the jungles started getting difficult for the animals to live. There were taxes imposes on them on many basic needs like food water etc. Sensing the uncertainty and instability of the situation, many animals started complaining against the same but the message was not getting reached to the king. The system has got so corrupted that the animals started living with their faith in the hands of the wolves.

It was the time the tenure of the lions was about to get over and again the election has to take place. While the lions started making the wolves happy and supporting those in all their activities, the tigers waiting for the crown since many years, took the opportunity to reach to other animals and asking for their support.

Bambi, the leader of the Deer families, who was fighting with the system since a long time, had realized that, there is no difference between the lions and the tigers. He called a meeting of all animals and started telling everyone that at the end of the day, the wolves are going to run the shows and hence he suggested for a tough bargaining with the lions for a sustainable system for a better life of all the animals of the jungle. Or else we change the ruler.  

“But to whom to trust? To whom to vote for? Why don’t you contest the election” the rabbit suggested and all other animals supported.

“Election? No… how can we fight against the lions and tigers” A member of the Deer family screamed. “It is not a simple game to play. Can we survive in this jungle if we dare to do so?”

“Anyway we are struggling to survive now. We should fight and take a chance to change the system” Bambi told to all.

Getting this news about the new happenings in jungle the lions and tigers started laughing and also invited the Deers to contest the election.

On the day of the election, it was an unbelievable scenario since there was fifty percent increase is number of voters. Those who never came for any voting turned up this time to suppot the Deers in a hope for change in system. As a result the Deers got the second position to tigers in the election and the lions were almost out of scene. It was chance for the tigers to rule the jungle but realizing that many of the animals of the jungle are supporting the Deers, it will be difficult to rule the jungle as done in past. Similarly the lions also got surprised with the result and were very uncomfortable in this scenario and they were feeling insecure the coming years. The wolves were hiding behind and waiting for a direction from lions/tigers while all other animals in the jungle were celebrating the victory of the Deers.

Behind the scene the lions met the tigers in a undercover meeting and expressed their feelings. The tigers too agree with the lions since the future for both of them seems to be a difficult to survive. They framed an undisclosed strategy to deal with the situation.

In a meeting of all the animals the tigers expressed their unwillingness to rule and ask the Deers to rule for their good cause. The lions supported the Deers and asked them to rule and change the system. It was a tough time for the Deers since the Deers are one of the simple families of the jungle and ruling the jungle needs more of muscle power than emotions. The existing corrupt systems also run by mainly the wolves, who are the supporter of lions/tigers and partner to them. Bambi already realized the difference between winning and ruling the jungle. Infront of all animals he put some conditions for the tigers and lions before taking the crown. The tigers rejected all stating, the ruller has to take its own decision and the lions expressed their eagerness to the conditions but simultaneously stated that incase they found the Deers are not able to rule they will withdraw support.  It was a very difficult position for the Deers also all other animals wanted everything should get settled soon before anyone outside take advantage of this in the jungle.

If Bambi take back his position, he will lose the trust of all the animals and his dreams of changing the system will never gets fulfill and also it will be difficult for the Deers to survive in the jungle after that.

What should Bambi do now? Even if he takes the position of ruler, will he be able to change the system? Can the Deers ever be able to rule the jungle? If yes then till how many days?

                                                                                                                  

Sunday, December 15, 2013

CASE ANALYSIS : TARGET THE RIGHT MARKET : SPARKPLACE


EXECUTIVE SUMMARY :
This report explores case study of SparkPlace, an online-marketing software company. Due to the limited resources available to this company, it wants to target two available markets: small businesses with no more than 20 employees (Small Sams) and medium-size businesses with 20 to 100 employees (Medium Marrys). The case illustrates that SparkPlace is in a crossroad to and the major challenge faced by the sales and marketing executives at Sparkplace is the dilemma in selecting the suitable market segment within these two segments. The report will review the SparkPlace’s Potential, marketing challenges and possible solutions.                                                            



                                                                    CASE ANAYSIS

SWOT ANALYSIS OF SPARKPLACE:

STRENGTH
·       Spark Place’s user friendly software
·       Success in acquiring Sams
·       New venture in to content development will increase SparkPlace market presence
·       software development capability to create products which can target both Sams and Marys

WEAKNESSES
·       Concentration on Permission based Marketing.
·       limited experience in the industry (Approx. 2years) can be the reason for fewer acceptances among Marrys
·       Funded by VCs and has resources constraints

OPPORTUNITY
·       Growing market potential(Sams & Marrys)
·       Beyond permission based marketing. e.g Send the content that subscribers want. Upon sign-up, allow subscribers to choose whether they want deals, business updates or tips about products
·       VCs need return on their investment and of course, if they get it, they represent a new source of funding

THREAT
·       Competition is tough for Marrys and also Sams are more volatile
·       There is always a pressure on Margin since Sams are very prone towards low cost products.


·       Sparkplace software available on Monthly fees, can be a probable reason for customer churner. Since many Sams may found this as an immediate pressure on balance sheet.

MARKET ROI ANALYSIS (SAMS VS MARRYS)


Examining SparkPlace’s data, it can be seen that each $100K of combined Marketing and Sales expenditure can brings in 33 Numbers of small Sams & 3 numbers of medium Marrys.

On an average life time, the 33 Sams will generate Profit of $330K ( $10K* 33Nos). The average contribution to profit after marketing & sales cost $231K ($7 K* 33Nos).

Similarly on an average life time, 3 Marrys will generate profit of $150K ( $50*3 Nos). The average Actual contribution to profit after marketing & sales cost $60K ($20 K* 3 Nos).

Based on the profit contribution, total Market potential for Sams: $9.1bn( $7K*1.3M)
Based on the profit contribution, total Market potential for Sams: $10bn( $20K*0.5M)

Even if the average customer churning rate of Sams are 3 months and that of Marrys are of longer duration, on an average Sams seems to be of more profitable for an equal amount spend on marketing and sales. But looking in to the total market potential based on profit contribution, it is almost same in both the cases.

Considering the average marketing and sales cost per customer, to acquire 1.3 million Sams, SparkPlace needs to invest a total of $3.9 bn in marketing & sales. To acquire 0.5 million Marrys SparkPlace needs to invest a total of $15 bn in marketing & sales.



THE BUSINESS SOLUTION: Focus on Sams but not to ignore Marrys

Sams are the cash cow for the company since the market penetration is very good. Initially SparkPlace should continue to mainly focus on Sams and simultaneously understand the needs of Marrys and continue to invest in Marys too. Sams will no longer remain Sams but would graduate to Marys, so even if there are 20% graduation rate, SparkPlace will be better off sticking with Sams and growing the business to eventually cater to Marrys.

The flip side of not targeting both the market is that, SparkPlace runs the risk of creating self-inflicted boundaries for themselves, which could act adversely if market dynamics were to change radically in the future.




Sales and marketing Strategy:

  • Profile Sams into different groups based on profits, turnover and lifecycle.

Ø  Potential Marrys: These Sams would have more chances of converting to Marys. SparkPlace should target this segment by providing trainings/demos for the software, preparing sales pitch for selling its features and services, consultative or value selling, providing free trial/discount during adoption phase.
Ø  The churners: SparkPlace should understand the reasons for the churn and how to retain them. Feedback should be taken and share with sales, marketing and development team.

  • Increase the contract length  to  Six months or One year and provide Sams the product on Quarterly rent basis. It will not put immediate pressure on Sams balance sheet and will eventually help Sams to concentrate on other areas of business for growth and profitability.

  • Keep the detailed product demos and customer support to show how the product adds value to Sams/ Marrys. The users should be well trained to use the product and know why it adds value to their business.

  • Prepare and train the sales and marketing team for selling content development software along with e-marketing software. This will help in building a long-term relation with customer.

  • While selling and making a profit on the Sams, reinvest the profits into making contacts with Marrys.

Product development Strategy:

  • Supporting sales and marketing strategy, standardized the software for Sams and Marys so that sales team could be given training for the overall product which could be easily customized depending on the needs of the customer. The sales team then could decide the value proposition of the product when they prepare the sales pitch.
  • Create a niche product that does something really well for a specific size of business or for a specific industry
  • Focus on creating an 'all in the box' software product that is well known, easy to use and does a lot more than competitors.
 *******

Sunday, November 24, 2013

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.


  1.     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.

My favorite books

  • The Seven Habits Of Highly Effective People
  • In Search Of Excellence
  • Changing the Way We Work
  • who says elephant cant dance
  • to be human
  • india2020
  • Competing on Edge
  • Leading at the Edge of Chaos
  • alchemist
  • world is flat
  • thec monk who sold his ferrari
  • the kite runner