Estudio: "Detrás de un Intraemprendedor Social". -MILAN SAMANI

Erik Simanis, PhD www.eriksimanis.com

Corporate Social Intrapreneurship: Hard-Learned Lessons from the Field

© 2014, Erik Simanis, www.eriksimanis.com 2

For%fied Foods

Credit Access

Clean Water Educa%on Health Care

Electricity

Sanita%on

If You Build it… They Will Come SUPPLY

DEMAND

Field of Dreams Logic


Where We Got it Wrong

Selling Improved Products is Easy…Selling NEW FUNCTIONALITIES is Hard

Making a New Product is Easy…Building a NEW CHANNEL is Hard

SUPPLY-‐SIDE DEMAND-‐SIDE


The Demand-Side Challenge

To profitably drive sustained consumer adop%on of new

func%onali%es, consumer learning and behavior change strategies have to be built into the business model.


SC Johnson: Nairobi, Kenya


$


=

Needs ≠ Market

MARKET CREATION Embed New

Product RouAnes into Consumers’

Lifestyles


The Market Creation Challenge

Product rouAnes are complex and highly personalized.

Lacking benchmarks, consumers learn new product rouAnes through repeated experimentaAon.

Consumers can’t evaluate a product unAl a product rouAne is embedded into their life.


You can’t message your way into a new market without breaking the bank.

•  PepsiCo: Iron for%fied biscuits •  P&G, Grundfos, et al: Water purifica%on •  Shell: Solar ligh%ng •  SC Johnson: Toilet cleaning

Consumer learning (behavior change) strategies have to be

built into the offering and business model.


Learning Strategies

There’s No Place Like Home

Wash Rinse Repeat

Monkey See, Monkey Do

Two Heads Are BeTer Than One


SC Johnson, Ghana


A membership-based club for homemakers that turns the stressful practice of caring for

one’s home and family into a bonding

group experience.


PRODUCT

PROMOTION PLACE

PRICE •  Bundled products with

established value/rou%nes

•  Product props that support a product rou%ne

•  Complementary events that create a plaTorm for product modeling.

•  Loyalty awards with established aspira%onal value

•  “Skeumorphs” that reference established product

•  “Codes” that create associa%ons with current rou%nes

•  Subscrip%on pricing to ensure mul%ple trials

•  Layered pricing to signal range of func%onali%es

•  Group customer to leverage peer effects

The Market Creation Mix

VALUE OPEN


The Supply-Side Challenge

How do you back-‐envelope the numbers for a new channel in order to know if your

product can be realis%cally commercialized?


Traditional Business Ecosystem

Distributor Business

Retailer Business B2C

MNC

B2B MNC

Professional Marketing Low Touch Channel


The Channel Gap

B2C MNC

B2B MNC

Low-Income Consumers

Smaller Business Units with Higher Op. Cost Structures & Longer Timelines to Scale

Limited purchasing power, %ght budgets,

low educa%on, skep%cal buyers

?


The Numbers Challenge

§  Modeling a start-up business, not a new product launch

§  Company’s traditional financial model won’t overlay, as it’s based on a different business model

§  Company profitability and channel profitability are negatively interdependent


The Modeling Cycle

Determine Business Unit

Reach

Determine Customer Engagement Intensity & Frequency

Unit-‐Level Cost Structure:

Opera%ng, Dep, & Int

Unit-‐Level Price & Margin

Structure

Corporate-‐Level Cost Structure:

Opera%ng, Dep, & Int

Corporate-‐Level NPV Model


BOBIKUMA(UPPER(,(HUB(

~5,000(

Bobikuma(Lower(~3,000( Abodom(

≈6,000(

Kukorantumi(≈2,200(

Swedru(≈60,000(

Eshiem(≈4000(

Kokofu(≈2,500((

Formena(≈900(

((

3(km(

Nfantseman(

≈600(

(Kwaman(≈3,500(

(

Nyakrom(≈15,000(

2(km

(

3(km(

2.5(km(

(2(km

(

2.5(km

(

Hasowodze(~1,200(

Abamkrom(~1,200(

Mozano(~1,000(

Afransi(≈5,000(

1.5(km(

3(km(

Besease(~2,000(

Ofaso(~2,000(

3.5(km

(

0.5(km

(

(2(km

(

0.5(km

(

1(km(1.5((k

m(0.5((km(

Mensakrom(~1,500(

Ocheso(~1,500(

2(km(

Jakobukrom(≈700(

Adukrom(~1,500(

3.5(km

(5.5(km(

0.5(km(5(km(

Akwamu(≈1,000(

The(Geographical(Reach(of(the(Business(Unit(

Step 1 (A): Business Unit Reach


Step 1 (B): Business Unit Reach

Branch Reach (Total # Households, All LSM) 150,000 % LSM 3-7 Households (Urban) 57%% Households with Children 30%

Available Target Market Per Branch 25,470

Available Target Market 25,470 Penetration Rate 15%Renewal Rate (Renewals/Member/Yr) 75%

Total Effective Customer Base: 5,094 Monthly Served Customer Base: 3,821

Target Market per Branch

Target Customer Base per Branch

Fix Branch Size

Set RealisAc Steady-‐State PenetraAon Rate


Days/Month Available For Customer Visits 15Customer Visits/Day/Salesperson 5Customer Visits/Month/Salesperson 75Size of Customer Group 2

Required # of Salespeople: 25

Sales People Per Supervisor 12Required # of Sales Supervisors: 2

Required # of General Managers: 1

Days/Month Available For Deliveries 20Customer Deliveries/Day 15Customer Deliveries/Month 300

Required # of Deliverymen: 6

1. Salespeople

2. Sales Supervisors

3. General Manager

Branch HR Requirements

4. Deliverymen

Step 2: Customer Engagement

Determine frequency and intensity of customer engagement needed to drive adopAon, collect payments, ensure proper product

usage, provide aWer-‐sales support, etc.

Set Customer Load Per Salesperson


Step 3: Unit-Level Cost Structure

Unit Cost (Taka): Units Total (Taka)

Total (USD) %

HR:General Manager 40,000 1 40,000 500 6.1%Sales Supervisors 18,000 2 36,000 450 5.5%Salespeople 10,000 25 250,000 3,125 38.1%Delivery People 7,000 6 42,000 525 6.4%

Transportation:General Manager -- Daily Allowance 200 22 4,400 55 0.7%Sales Supervisors -- Daily Allowance 150 44 6,600 83 1.0%Salespeople -- Daily Allowance 100 550 55,000 688 8.4%Delivery People -- Daily Allowance 50 132 6,600 83 1.0%Delivery Cycles Maintenance/Repairs 800 6 4,800 60 0.7%

Phone:General Manager -- Daily Allowance 200 22 4,400 55 0.7%Sales Supervisors -- Daily Allowance 150 44 6,600 83 1.0%Salespeople -- Daily Allowance 75 550 41,250 516 6.3%Delivery People -- Daily Allowance 50 132 6,600 83 1.0%

Sales Uniforms 300 16 4,650 58 0.7%Rent 15,000 1 15,000 188 2.3%Marketing (per Customer) 25 5,094 127,350 1,592 19.4%SGA 5,000 1 5,000 63 0.8%

100.0%

656,250 8,203

Branch Operating Costs (Without Dep or Interest), Monthly


Bundle 1 410.00Bundle 2 414.00

Total Product Bundle Var. Cost (Avg): 412.00Non Product Bundle Costs:

Loyalty Award Pt (Taka Equivalent) 50.00Educational Movie Swap 8.00Monthly Compliance Prize 15.00Bundle and Staple Coupons 8.006-Month Printed Report, Paper + Ink 2.506-Month Photo, Paper + Ink 2.50Photo Frame 13.33Smart Start Labels 0.00Other 0.00Other 0.00Total Non Product Var. Costs: 99.33

Total Variable Costs: 511.33

Branch Total Operating 656,250.00Depreciation Expense 30,888.89Interest Expense 214,868.16# Renewal Customers/Mo 3,756.83

B/E Contribution/Mo/Household 240.10

Total Variable Costs 511.33B/E Contribution/Mo/Customer 240.10

Target Membership Price: 752.00

1. Variable Costs of Renewal Membership/Household/Mo

2. S&S Breakeven Contribution/Household/Mo

Target Membership Price

Target Membership Price

Step 4: Unit-Level Price & Margin

Price to the Channel

OperaAng & Fixed Costs Per

Customer Required Price

& Margin


Step 5: Corporate-Level Costs

•  Repeat cost exercise for additional resources required in the corporation to replicate and scale the business units

•  Conduct NPV analysis –  Iterate on price to channel and corporation’s margin

until NPV is positive

•  By knowing the price point and required margin to profitably serve the channel, you can calculate the cost target for your product.


•  Think cri%cally about your product’s impacts on consumers’ rou%nes and lifestyles (%me, space, & interpersonal).

Making Your Dream Come True

•  Maintain an un-‐wavering focus on connec%ng to your company’s core business.

•  Be laser-‐focused on the numbers and the path to profitability.

Erik Simanis, PhD www.eriksimanis.com

Corporate Social Intrapreneurship: Hard-Learned Lessons from the Field