Experiencing Innovation In Asia: Cases In Business Model Development

CASES IN BUSINESS MODEL DEVELOPMENT

ESSEC Business School

• Publisher: WSPC
• Year: 2015
• eBook ISBN: 9789814689168
• Topic: Biological Sciences
• Subtopic: Science General
• Index: Biological Sciences

Does business model innovation look the same in Asia as it does in the Western world? If not, what can we learn from the differences? This book attempts to answer these important questions through a series of original cases concerning a variety of companies, from large multinationals to small social enterprises.The cases arise from the Asian Strategy Project, an initiative conceived by ESSEC Business School and supported by Capgemini Consulting. As part of this unique programme, students were embedded in a company in an Asian emerging market and given the opportunity to develop their understanding of an innovative business model by working on real strategic issues that the company faced.Written by ESSEC professors, this book gathers a representative selection of the resulting cases, creating a repository of knowledge for business students, teachers and professionals who wish to learn more about innovative business models in Asia. Contents:

• Sustainable Development:
  • Veolia Water India: Bringing a 24/7 Water Supply to the People of Karnataka (Wolfgang Dick)
  • Naandi Foundation: Delivering High Quality Elementary Education in India (Wolfgang Dick)
  • PlaNet Finance China: New Models of Microfinance in Tongwei (Thomas Jeanjean)
• New and Old Media:
  • Yek Mobile: Launching an Innovative High-Tech Startup in China (Li Yan)
  • StarryMedia: Bridging the Gap between Innovation and Market Needs (Li Yan)
  • Mozat: Launching a Mobile Game in the Middle East and North Africa (Li Yan)
  • Priya Entertainments: From Scripts to Screens in East India (Arijit Chatterjee)
• Global Brands Addressing Local Challenges:
  • Capgemini India: Making Employee Retention a Priority (Cedomir Nestorovic)
  • Renault India: Benchmarking Against Other Industries for Marketing Success (Li Yan)
  • Renault China: The Challenge of Increasing Brand Awareness (Li Yan)
• Social Entrepreneurship:
  • PlaNet Finance: A New Microfinance Loan in Cambodia and Vietnam (Ashwin Malshe)
  • Pour un Sourire d'Enfant: The Need for a New Funding Model (Ashwin Malshe)
• Small Businesses with Big Ideas:
  • Weavers Studio: Using as Many Hands as Possible (Arijit Chatterjee) Students studying at business schools, academics and business professionals who wish to learn more about innovative business models in Asia. Key Features:
    • Cases cover the gamut of small companies, large multinationals and non-profit organisations operating in Asia, providing insight into a wide range of business challenges
    • Sectors covered range from infrastructure to digital marketing to the automotive industry, giving a broad overview of business in Asia
    • Issues explored in the cases will resonate with students of business around the world: sustainability, the role of government, business ethics and culture

Part A

Introduction

Sustainable Development

How to create and manage a reliable and constantly available water supply in a place with underdeveloped infrastructure and a population unconvinced of its merits? That was the challenge facing Veolia Water, a global water services and treatment company, when it undertook a supply project in Karnataka state in South West India.

Veolia has been active in India since 1999 through its subsidiary Veolia Water India, and has been able to take advantage of the Indian government’s promotion of private sector involvement in infrastructure projects. Thus the company was selected in 2005 to participate in a 24/7 water supply project in Karnataka state. A continuous and pressurised water supply was implemented in five demonstration zones, located in three cities. The main objective of the project was to establish the feasibility of continuous supply, as many people were convinced it was technically impossible.

This case gives an insight into how, when delivering such an ambitious infrastructure project, an organisation must be innovative on several fronts: Not only on the technical side regarding the implementation, but in communicating with the local population and in pricing the new service fairly for an economically diverse community.

Aside from water, one of the key challenges facing India is providing adequate access to elementary education. Exploring the country’s private school market might, at first glance, appear to be an issue concerning the country’s elite and privileged few. However, in the case of the Naandi Foundation it is just the opposite.

Naandi was founded in 1998 at the behest of a Community Public Trust set up by four prominent corporate houses in Andhra Pradesh state. Its mission is to serve under-privileged populations in India through the eradication of poverty and the improvement of those populations’ quality of life. One of its main concerns is the protection of children’s rights through education.

In India, education represents a way out of poverty, with families — even those who are very poor — willing to make financial sacrifices for their children to access decent schooling. However, the sector faces serious issues: The market is fragmented due to state delimitations; and public schools have evolved to become exclusively aimed at the poorest of the poor, with many of them blighted by constant teacher absenteeism.

The case provides an overview of India’s elementary education system, the evolution of its affordable private school market, and looks at what strategies Naandi can employ to establish itself in the market.

In another vast, fast-developing nation, the citizens of rural Tongwei County in China’s Gansu province faced many of the same problems as the underserved populations of Karnataka and Andhra Pradesh. They had poor access to education and survived through subsistence farming and remittances from family members who had migrated to cities. A harsh climate and inhospitable land added to their predicament.

However, as a result of the Chinese government pioneering the National Biogas Subsidy Programme, they were given the opportunity to access a reliable source of renewable energy that had the potential to improve both their farming practices and their living conditions.

This third case follows PlaNet Finance, a French microfinance organisation with a representative office in China. In a first project in Tongwei, the organisation had provided microloans to farmers so that they could construct individual biogas installations that would allow them to fully benefit from the government programme. PlaNet Finance also sought to provide further training and education, creating what is termed a microfinance ‘plus’ programme, meaning that its actions are not limited to only providing finance.

PlaNet Finance China began to plan a new project in Tongwei, further expanding on the scale and scope of its original microfinance model. The case raises a number of questions about the role of microfinance in developing economies. Does it promote the goal of self-sufficiency among poor populations? Does the ‘plus’ element of education and training support that goal or simply make it too expensive to be sustainable? And what role does leadership play in the deployment of such projects?

In all three cases, it is clear that finding the right solutions to big problems, such as providing people with water, energy, and education, requires new ways of thinking.

Chapter 1

Veolia Water India: Bringing a 24/7 Water Supply to the People of Karnataka*

Wolfgang Dick

Financial Reporting and General Management, ESSEC

Patrick Rousseau, Chairman and Managing Director of Veolia Water India (VWI), was impressed by the provocative speech of one of his young employees during the India Urban Space 2007 Summit. More than 150 Indian leaders were looking at a picture of an African country, trying to answer the question “What is the name of this country?” “It is Niger,” the young engineer declared. “One of the poorest, tiniest countries in the world. And yet, Niger enjoys a 24/7 water supply. In India, however, a country said to be the new giant superpower, we are not even able to provide this service.” Now, in 2009, Patrick still feels the shock among the audience on realising the backwardness of water infrastructure in India. He realised that bringing a 24/7 water supply to India would dramatically help the country’s economic development and the health, social, and economic situation of the population. In 2005, VWI had been selected as the private partner of a 24/7 demonstration project in Karnataka state. Patrick would like to use the experience of this project to obtain similar contracts in other Indian cities. Patrick is remembering the beginning of the Karnataka project and the difficulties that VWI faced during the last three or four years, especially in dealing with the population’s expectations.

Water in India

Water and Hinduism

Water has a special place in Hinduism as it is believed to have spiritual cleansing powers. India’s main rivers are considered sacred because of the many rites they host.

Water Resources

India enjoys three types of water resources: rivers, groundwater and surface water. With an average annual rainfall of 1,170 mm, India is one of the wettest countries in the world. However, there are large variations in the seasonal and geographical distribution of rainfall over the country. For example there is 11,000 mm of rainfall per year in areas like Cherrapunji in the northeast, and only 200 mm per year in Jaisalmer in Rajasthan. Nearly three-quarters of the rain pours down in fewer than 120 days, from June to September.

India’s groundwater resources are almost ten times its annual rainfall. Nearly 85% of currently exploited groundwater is used only for irrigation. Besides, groundwater is now the source of four-fifths of the domestic water supply in rural areas, and around half that of urban and industrial areas. However, according to the International Irrigation Management Institute (IIMI), India is using its underground water resources at least twice as fast as they are being replenished.

In terms of surface water, there are 14 major, 44 medium, and 55 minor river basins in the country. The major river basins constitute 83–84% of the total drainage area. This, along with medium river basins, accounts for 91% of the country’s total drainage. India has the largest irrigation infrastructure in the world, but the irrigation efficiencies are low, at around 35%.

India has 16% of the world’s population but only 4% of the available fresh water on Earth. As a whole, it is not facing a water stress situation yet.¹ Nevertheless, water resources are unevenly distributed over the country and some states (like Rajasthan and Tamil Nadu) suffer from insufficient water resources. Studies indicate that India could become a water-stressed country by 2025² because of its urban growth and improper water management.

Growing Water Demand³

Urbanisation is considered to be both an important component and a natural consequence of Indian economic growth. Since 200...

Table of contents

• Cover Page
• Title Page
• Copyright
• Contents
• Introduction
• Acknowledgements
• Part A: Sustainable Development
• Part B: New and Old Media
• Part C: Global Brands Addressing Local Challenges
• Part D: Social Entrepreneurship
• Part E: Small Business with Big Ideas
• Conclusion
• About ESSEC and Capgemini Consulting