[GKD-DOTCOM] Win-Win Business Models

[Al Hammond]

For Tom Abeles and others who have joined the conversation recently, I
would like to point out that we have documented a number of what we
believe can be win-win models, and even sustainable models, in
connectivity, agriculture, finance, health care, and other sectors, in
detailed case studies that can be found on  or
with links under the resources page of the conference website,
. We have also posted earlier in this
discussion detailed market data characterizing the size of the
low-income or bottom-of-the-pyramid markets in a number of developing
countries. Many of the companies coming to the "Eradicating Poverty
Through Profits" conference in San Francisco next month are seriously
exploring how to serve such markets in ways that generate real local
value, while also yielding a profit.


Allen L. Hammond
Vice President for Innovation & Special Projects
World Resources Institute
10 G Street NE
Washington, DC 20002  USA
V (202) 729- 
F (202) 729-7775
[EMAIL PROTECTED]
www.wri.org
www.digitaldividend.org




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Re: [GKD-DOTCOM] Is Profitability Essential for Sustainability?

[Kris Dev]

I would like to react as follows to Lee Thorn's comments on
sustainability and profitability:

For any project or venture to be successful, there has to be a return on
investment, tangible or intangible. Without this, the initiative is
deemed unproductive and hence a waste.

Preferably, for sustainability, at least the variable cost should be
covered fully. If it covers either a part or fully the fixed cost, it is
ideal.

If it can also cover the "opportunity cost", there is the possibility of
creating other better income generating opportunities in lieu of doing
the current project, then there is motivation to continue and scale up
the project. This is what is termed as profit by others.

I don't know, if I am right or wrong.

I would like to benefit by others' opinions.


Kris Dev (Krishnan)
[EMAIL PROTECTED]
http://ll2b.blogspot.com




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Re: [GKD-DOTCOM] Can Technology and a Business Approach Make Globalization Work for the Poor?

[P. Gopinath]

Dear GKD Colleagues,

It is not surprising that international corporations are interested in
India given that between 300 and 500 million Indians spent more than
US$30billion in 2002 and a DSP-Merrill Lynch report says that household
spending will be $500 billion by 2008, with spending going up even
faster than the economy which, at 7% per year, is growing much faster
than the West 
and . A market research
company here in India ranks us fifth out of 30 emerging retail markets
around the world. An example is the 2 million new mobile phone
connections per month and mobile phones are catching on even in large
villages that are near cities. The demographics work great too. In the
next couple of years, we will have 250 million people in their twenties
and thirties, all getting married, having kids and buying homes and all
the stuff that goes with it. Imagine a market as big as the United
States with the whole population in their twenties and thirties.

Electronics companies have discovered the India market. Nokia is one of
the ones that figured out how to work in this market and they sold $2
billion worth of cell phones and equipment last year
. But it is not easy
for foreign companies to be successful here. International companies
have to change the way they operate if they want to work here. One thing
they have to learn is that everything is on a different scale. You sell
a lot of units at low prices. Do not think you will sell 10 packs of CDs
even if the cost per unit is lower. We buy tiny quantities compared to
Americans or even Europeans. So you need to find ways to sell things
cheaply, like prepaid cell phone cards that cost just a few dollars. But
cheap does not always win either. Products have to be reliable and
fashionable. Samsung is successful at selling expensive phones because
they have made their phones a fashion statement here. And we Indians
love new gadgets.

Two things are going to help companies make products for the poor. One
is that more and more IT companies are opening research branches here in
India, like Cadence, Analog Devices, Intel and lots of others. The
other thing is that more youngsters want to work for themselves. Not so
long ago anyone who had a high school or college degree wanted to work
for the government or some big company. Now many young people are going
for setting up their own companies. They design high end wireless chips
or new kinds of software. I think that this combination of research
outfits and young entrepreneurs will make it easier for IT companies to
understand and build for the poorer communities where the majority of
the population still is. If companies set these young engineers to
figuring out new products and services for the poor they could come up
with some great products. I did hear that Hewlett-Packard opened an
'idea bazaar' in Bangalore that invites programmers and product
developers to get together to talk about new ideas for mobile phones. I
have not seen it myself but it is a great example to other companies.

I read a blog from an American who says he outsources his own job; he
hired someone in India to do his programming, pays about 1/5 of his
salary, spends a couple of hours a day reviewing the code, and the rest
goes in his pocket. His boss thinks he's telecommuting. I do not know if
this is true but it would be possible and if it became a trend the boom
here will grow even more.

This all is good for India but perhaps it does not answer the question
of the Moderator, how does this make things better for the poor right
now. I believe most or all the market demand I described is from the
middle class and that is a huge market. But companies here will grow,
there will be more jobs and people's salaries will go up (people who
work in call centers or data input centers make 15 times the average
salary). I think that will help the poor and will have more impact than
all the foundations or community nonprofits can have, even though it
will take some time. If the nonprofits and government get new young
entrepreneurs to work on products for the poor, then things will go even
faster. The companies can make a profit and the poor will benefit.


P. Gopinath




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Re: [GKD-DOTCOM] Can Technology and a Business Approach Make Globalization Work for the Poor?

[John Hibbs]

Tom, OF COURSE you are correct! The big consuming nations must reduce
consumption and increase conservation (are they the same?). They must
also be of of assistance to the under-consuming nations so all in those
societies can climb their own, very steep,ladder to minimum health,
literacy and employment standards.

How?  Not by selling higher priced soap to Bengali's, but by getting
more out of both ground and brain --- enriching one in ways to do less
damage to it. Enriching the other so each one can make his and her own
contribution.

HOW, HOW HOW?

Isn't a good start to FOCUS on a single effort we KNOW will pay large
dividends, like: Internet connectivity to every home? (or at minimum) a
nearby cyber cafe? owned by the community? coupled to innovative radio
stations and content providers? - who gather inside the cyber cafe? for
town hall meetings? job brokering? knowledge work that is insourced?


On 11/11/04, Tom Abeles wrote:

> Chetan Sharma's examples are interesting, particularly the one from
> Unilever. It is a variance on the same theme as the many "multilevel
> marketing" organizations in the US, and I presume elsewhere. Basically,
> for those unfamiliar with the scheme, one recruits persons to sell a
> product, they in turn recruit others and everyone up stream gets a piece
> of the commission from the sale of goods to the bottom of the pyramid.
> The idea, of course is one pays "retail" at the bottom and one gets
> goods at a discount higher up because commissions off set the cost of
> the goods. There are some very good versions of this, many with strong
> faith based communities which can rapidly propagate the scheme by
> networks. Of course, some of these have ended up in developing
> countries, such as Avon which has gone global.

..snip...




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Re: [GKD-DOTCOM] How Can ICT Create New Business Partnerships?

[Nevine Gulamhusein]

Jeff, you're right, even Toys R'Us hiccupped against Walmart and they
had to revise strategies.

I agree, to an extent that big businesses are the support pillar in
alleviating poverty, marginality (creating jobs but they can also abuse
the workforce equally) but in reality, every individual, in question,
needs to be motivated and take ownership to improve their livelihood. I
believe innovativeness is equally important and with the support and
backing of the family, community and government, there is an
opportunity. I am currently working on my thesis which may underscore
this theory.

  
Nevine Gulamhusein, 
Finance Officer, Aga Khan Council for USA 
1700 First Colony Boulevard
Sugar Land, TX 77479
Tel: 281-980-4747 Ext 359
Fax: 281-980-4787


On Wednesday, November 10, 2004, Jeff Cochrane wrote:

> Barry Coetzee raises an issue I know is the focus of research, for
> example, within Community Economics, and is certainly the object of a
> popular debate here in the United States.
> 
> A parallel example: Recently a number of communities in the USA have
> passed regulations effectively barring a major company, Walmart, from
> locating in their markets, apparently because they recognized the
> broader impacts that might have on the mix of employment, economic
> growth, etc.




This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative
Agreement with AED, in partnership with World Resources Institute's
Digital Dividend Project, and hosted by GKD.
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provide more information.
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