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1
SC Johnson in Kenya Base of the Pyramid Protocol™ in Action:
Cambridge November 2006
SC JohnsonAFNE
John Langdell
2
SC Johnson Core Values
• Commitment to Family• Innovation is fundamental
• Environmental leaders
• Superior Partners• Global Brands that win
• Spirit of Leadership and Adventure
3
Five generations of Family Leadership
• Dr. H. Fisk Johnsonis Chairman and CEO
One of the greatest benefits of being a family company is the ability to make decisions for the long term, rather than for quarterly gains. The progress SC Johnson continues to make against our goals shows the power of this long term focus.
Fisk Johnson, Chairman and CEO, SC Johnson
“
”
5
Strategic Opportunity
• Using Earth-Responsible Raw Materials
• Preventing Insect-Borne Diseases
• Reducing Energy Consumption and Greenhouse Gas Emissions
• Advancing Social Progress and Public Health
6
Advancing Social Progress and Public Health
Core Values +
Sustainability Platforms +
Products that Make Lives Cleaner, Easier, Healthier = Strong Foundation for Work at the
BoP
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SEA (28% AR)
• South Africa (Sub & factory)
• East Africa (KUT) (sub)
MENA (20% AR)
• Saudi (JV & factory)
• Egypt (JV & factory)
• Gulf (Sub)
• Levant & Other (Distributor)
NWA (17%)
• Nigeria (JV & factory)
• Ghana (Sub)
• FWA (Distributor)
• Morocco (Sub)
• North Africa (Distributor)
• Israel (JV)
SCJ in AFNE
Approximately 200mm sales
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The MNC: Traditional Customer Base
“Top” of the Income Pyramid
“Base” of the Resource Pyramid
The “ToP”
Customer85% of Global Resources
> $10,000/yr Cost structures, business models, & research methods based on a
“Western infrastructure”
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We Needed to Move On
Business Corporate Strategy/Philosophy Personal
The Growth Challenge Sustainable Business Motivation+ +
= Challenge (2 – 5 years)
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Incremental business opportunity between existing ToP model and BoP model, BoP Service model delivering product benefits direct to home instead of delivering
products through traditional channels
Opening Up: The Business Concept
SCJ Regional
Office
SCJ Distribut
ors
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Regional Whole-salers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
SCJ Distribut
ors
SCJ Distribut
ors
SCJ Distrib-utors
ToP/MoP Consumers
SCJ Regional
Office
SCJ Distribut
ors
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Regional Whole-salers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
SCJ Distribut
ors
SCJ Distribut
ors
SCJ Distrib-utors
BoP Consumers
Comm-unity
Partners
SCJ Regional
Office
SCJ Distribut
ors
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Local Wholesal
ers
Regional Whole-salers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
Local Retailers
SCJ Distribut
ors
SCJ Distribut
ors
SCJ Distrib-utors
Incremental
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• Offer a diverse set of cleaning and pest control services that provide product benefits direct to homes and businesses in Nairobi’s slums
• Provide suites of services that bundle SCJ products like Pledge®, Glade®, Toilet Duck® and Baygon® along with existing youth services (e.g., garbage collection and carpet cleaning)
• Generate income for the youth groups while improving the communities they live in
“Community-Based Cleaning & Waste Management Company”
SCJ Business Model Innovation
SELL:
ENABLE:
MANAGE:
“ToP” Business “BoP” Business Cases of Product Service
Distribution Micro-Enterprise
Retail Trade Community Partners
Opening Up: The Business Concept
12
Challenges
• PEOPLE, PEOPLE, PEOPLE
• Small numbers, slow “burn” Do we have patience?
• “Firewalls”. Advantageous in early days
• Fully integrate into annual performance targets
13
Finances
• Six students x three months in Kenya
• One full time MBA graduate (BoP I & II)
• One full time local co-ordinator (BoP I & II)
• Numerous air fares
• Percentage of management time
14
What will Give it a Chance of Success?
• Relate to mainstream business
• Results: – Sales/profit– distribution– awareness
• Make it part of the plan:– Strategic– Annual
15
Achievements
• Kibera pilot project still growing/developing• Incremental distribution effort winning in Kenya,
Nigeria• Anti-malaria effort in RSA positively perceived• Roll anti malarial effort to other geographies in
07/08• Linkage established with other SCJ Developing
Markets efforts. Learning/co-ordination will follow
16
Fitting Into the Current Strategy
“Skate to where the puck will be, not where the puck is” -- Wayne Gretzky
DEEP DISTRIBUTION
•Motorcycle Sales and Distribution (SE Asia, Nigeria)
•KasKazi: Third Party Bicycle Sales and Distribution (Kenya)
VECTOR CONTROL
•Malaria education and marketing (South Africa)
•Dengue marketing and “Men in Baygon” (SE Asia)
•Asthma program in the United States
BoP PROTOCOL
•Kibera BoP Business Pilot
•Continued BoP Learning Lab Sponsorship
INCREMENTAL EVOLUTIONARY INNOVATIVE
BoP CONSUMERS
17
DEEP DISTRIBUTION VECTOR CONTROL BoP PROTOCOL
MAJORITY OF SCJ BUSINESS
Use Incremental and BoP Efforts to Re-balance the Business – End in Mind