Description
The presentation explaining about convergence of corporations and NGOs, creating innovative business models, Grow new markets at bottom of pyramid & niche segment in mature market.
Cocreating Business’s
New Social Compact
Motif
What
• Convergence of Corporations & NGOs
Why
• Create innovative business models
To
• Grow new markets at bottom of pyramid & niche segment in mature market
A Rocky Start…
• Two decades of liberalization by governments • Point of Contention: nature & rate of economic reform
Unanticipated consequences: Convergence of paths
1 NGO emerge as corporate sector’s de facto regulators • Ability to coordinate “smart mobs” • A potent example:
– Attack on Coca Cola by local NGO over use of water in village in Kerala – Account spread over Internet like wildfire – Loss to brand, sales
2 Heavy investment by companies to counter NGOs
• • • • Social Market Slogans Setting up non profit entities CSR initiatives Cause based marketing programs
3 Emergence of markets as an arena for interaction of Companies & NGOs
Utility of NGOs • Possess
– – local knowledge local infrastructure local cultures consumption behavior
Utility of Corporations • Provide
– Business models – Acumen – Funding
•
Understanding of
– –
The Path to Convergence
The Beresponsible Stage
The Get-intobusiness Stage
The Cocreate – businesses Stage
The Path to Convergence
The Beresponsible Stage
The Get-intobusiness Stage
The Cocreate – businesses Stage
The Be-responsible Stage
• • • • Realization of possibility of mutual existence Work to meet limited objectives Collaborate with the “enemy” Creation of three convergences
1
Convergence of standards of practice & emergence of joint regulatory framework
Benefit to NGOs • Developed more expertise in marketing & specialized business practices
Benefit to Corporations • Access to NGO’s knowledge of local market & social network
Example: •Forest Stewardship Council •Marine Stewardship Council
Convergence of brands, marketing & communications AND Emergence of first joint platform for marketing & customer management
• Case in Point: Cause-related marketing
Company NGO’s loyalists
Company’s customer & employees
2
NGO
• Learning from each other:
– Co.: Viral Marketing – NGO: Commissioning of Advertising Agencies to design campaigns
Convergence of professional cadres and career paths & Emergence of mgt professionals dedicated to working with cos on social causes and NGOs on business endeavors
3
CSR
Cos
NGOs
Gather intelligence on NGOs
Persuade Cos to change ways
Tools to pursue opportunities in untapped markets
Develop competencies to do business
The Path to Convergence
The Beresponsible Stage
The Get-intobusiness Stage
The Cocreate – businesses Stage
The Get-into Business Stage
• Failure on part of Cos to cater to the 4 Billion consumer market in developing countries • Few Co’s Success in Bottom of Pyramid mkt. • Few NGO’s success in untapped market segment
Success of companies Case in Point: Pick ‘n Play
• Pick ‘n Play: South Africa’s largest retailer • CSR Initiative: Support black farmer & cooperatives • Co operatives: Provided mgt & mkt. skills • Farmers: directly source produce to urban areas
Success of NGOs Case in Point: HealthStore Foundation
• Aim: Provide people with safe medicine in Kenya • Created 68 Child & Family wellness shops • Provide
– turnkey mgt systems & support – Training to owners – Select optimum store location
Issues with The Get-into Business Stage
1. Clarity of roles b/w Cos & Social Grps 2. Uncertainty in viewing the other party as collaborator or competitor 3. Reaction to competition at bottom of pyramid
The Path to Convergence
The Beresponsible Stage
The Get-intobusiness Stage
The Cocreate – businesses Stage
The Cocreate – businesses Stage
• Development of integrated business model • Both become key parts of each other’s capacity to deliver value
Opportunities of such Venture
• Ability to target Low income consumer/ niche market • Create hybrid business model to cater to bottom of economic ladder • Revive corporation’s social legitimacy while expanding NGO’s impact
Case in Point: British Petroleum
• Aim: Develop Fuel Efficient Stove for poor consumers in rural India • Development in collaboration with IISC Bangalore • Distribution through three NGOs • Established channel in 5 states • Work together on – Product features – Promotion campaign – Financing options – Distribution
Advantages of The Cocreate – business model to shareholders
• Availability of pre existing distribution channel to Co. • Building reputation for the NGO • New life to the venture
Conclusion: A Mutually Beneficial Alliance
• The two parties are dependant on each other • Application of asset and competencies by both partners • Value creation greater than sum of individual efforts
THANK YOU
doc_890643387.pptx
The presentation explaining about convergence of corporations and NGOs, creating innovative business models, Grow new markets at bottom of pyramid & niche segment in mature market.
Cocreating Business’s
New Social Compact
Motif
What
• Convergence of Corporations & NGOs
Why
• Create innovative business models
To
• Grow new markets at bottom of pyramid & niche segment in mature market
A Rocky Start…
• Two decades of liberalization by governments • Point of Contention: nature & rate of economic reform
Unanticipated consequences: Convergence of paths
1 NGO emerge as corporate sector’s de facto regulators • Ability to coordinate “smart mobs” • A potent example:
– Attack on Coca Cola by local NGO over use of water in village in Kerala – Account spread over Internet like wildfire – Loss to brand, sales
2 Heavy investment by companies to counter NGOs
• • • • Social Market Slogans Setting up non profit entities CSR initiatives Cause based marketing programs
3 Emergence of markets as an arena for interaction of Companies & NGOs
Utility of NGOs • Possess
– – local knowledge local infrastructure local cultures consumption behavior
Utility of Corporations • Provide
– Business models – Acumen – Funding
•
Understanding of
– –
The Path to Convergence
The Beresponsible Stage
The Get-intobusiness Stage
The Cocreate – businesses Stage
The Path to Convergence
The Beresponsible Stage
The Get-intobusiness Stage
The Cocreate – businesses Stage
The Be-responsible Stage
• • • • Realization of possibility of mutual existence Work to meet limited objectives Collaborate with the “enemy” Creation of three convergences
1
Convergence of standards of practice & emergence of joint regulatory framework
Benefit to NGOs • Developed more expertise in marketing & specialized business practices
Benefit to Corporations • Access to NGO’s knowledge of local market & social network
Example: •Forest Stewardship Council •Marine Stewardship Council
Convergence of brands, marketing & communications AND Emergence of first joint platform for marketing & customer management
• Case in Point: Cause-related marketing
Company NGO’s loyalists
Company’s customer & employees
2
NGO
• Learning from each other:
– Co.: Viral Marketing – NGO: Commissioning of Advertising Agencies to design campaigns
Convergence of professional cadres and career paths & Emergence of mgt professionals dedicated to working with cos on social causes and NGOs on business endeavors
3
CSR
Cos
NGOs
Gather intelligence on NGOs
Persuade Cos to change ways
Tools to pursue opportunities in untapped markets
Develop competencies to do business
The Path to Convergence
The Beresponsible Stage
The Get-intobusiness Stage
The Cocreate – businesses Stage
The Get-into Business Stage
• Failure on part of Cos to cater to the 4 Billion consumer market in developing countries • Few Co’s Success in Bottom of Pyramid mkt. • Few NGO’s success in untapped market segment
Success of companies Case in Point: Pick ‘n Play
• Pick ‘n Play: South Africa’s largest retailer • CSR Initiative: Support black farmer & cooperatives • Co operatives: Provided mgt & mkt. skills • Farmers: directly source produce to urban areas
Success of NGOs Case in Point: HealthStore Foundation
• Aim: Provide people with safe medicine in Kenya • Created 68 Child & Family wellness shops • Provide
– turnkey mgt systems & support – Training to owners – Select optimum store location
Issues with The Get-into Business Stage
1. Clarity of roles b/w Cos & Social Grps 2. Uncertainty in viewing the other party as collaborator or competitor 3. Reaction to competition at bottom of pyramid
The Path to Convergence
The Beresponsible Stage
The Get-intobusiness Stage
The Cocreate – businesses Stage
The Cocreate – businesses Stage
• Development of integrated business model • Both become key parts of each other’s capacity to deliver value
Opportunities of such Venture
• Ability to target Low income consumer/ niche market • Create hybrid business model to cater to bottom of economic ladder • Revive corporation’s social legitimacy while expanding NGO’s impact
Case in Point: British Petroleum
• Aim: Develop Fuel Efficient Stove for poor consumers in rural India • Development in collaboration with IISC Bangalore • Distribution through three NGOs • Established channel in 5 states • Work together on – Product features – Promotion campaign – Financing options – Distribution
Advantages of The Cocreate – business model to shareholders
• Availability of pre existing distribution channel to Co. • Building reputation for the NGO • New life to the venture
Conclusion: A Mutually Beneficial Alliance
• The two parties are dependant on each other • Application of asset and competencies by both partners • Value creation greater than sum of individual efforts
THANK YOU
doc_890643387.pptx