SOSERVMAN Project_Ch3_[Final Draft] Copy

Amit ChandaranaSOSERVMAN Project: Virunga ArtisansChapter 3: Final Draft 1

Table of Contents

CHAPTER 3: ECOSYSTEM AND COMPETITION........................................................

3.1 CHAPTER OVERVIEW.......................................................................................

3.2 BUSINESS ECOSYSTEM: DEFINED....................................................................

3.3 EAST AFRICAN ARTIFACT ECOSYSTEM............................................................

3.4 COMPETITION AND INDUSTRY ANALYSIS.......................................................

3.5 MARKET INFORMATION..................................................................................

3.6 OBSERVATIONS: FIELD VISIT.........................................................................

3.7 EXAMPLES OF BOTTOM OF THE PRYAMID SUCCESSES.....................................

3.8 COMMON TAWAYS FROM BEST PRACTICES.....................................................

3.9 SUMMARY.......................................................................................................

CHAPTER 3: Virunga Artisans Chapter 3

Chapter 3

3.1 Overview

The objective of this chapter is to provide a high-level description of the ecosystem of

the East African Artifact industry, as well as Virunga Artisans place within this space. To

present this overview, we will define a business ecosystem, look at stakeholders within

and their accompanying roles. In addition, we will investigate competitors that will allow

for best practice measurement and comparison. By sourcing deep secondary research

and a visit to Uganda and Rwanda, we will present specific market information.

After providing and overview, we will specifically look at Virunga Artisans at a micro

level to understand their presence in the social enterprise artifact space. Furthermore,

we will identify other Base of the Pyramid (BOP) endeavors and analyze their models.

This analysis will allow us to provide common threads of success and practices to

avoid.

3.2 Business Ecosystem: Defined

To understand the overall space of the East African artifact industry, we will look at the

ecosystem as a whole. The business ecosystem is defined as "an economic community

supported by a foundation of interacting organizations and individuals—the organisms

of the business world. This economic community produces goods and services of value

to customers, who are members of the ecosystem themselves. The member

organizations also include suppliers, lead producers, competitors, and other

stakeholders. Over time, they co-evolve their capabilities and roles, and tend to align

themselves with the directions set by one or more central companies. Those companies

holding leadership roles may change over time, but the function of ecosystem leader is

valued by the community because it enables members to move toward shared visions

to align their investments and to find mutually supportive roles.”1 Figure 3-1 (below) also

provides a visual guide to an ecosystem.

1 http://en.wikipedia.org/wiki/Business_ecosystem. James Moore, HBR.

2 | P a g eVirunga Artisans Sustainable Enterprise Development Plan

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Figure 3-1 Business Ecosystem2

The outside layer involves the trade associations, investors, government agencies,

competition and other stakeholders. As you move closer to the core business oval, the

extended enterprise includes direct consumers, customers of customers (in this case

end users / collectors), and supply networks. The primary mode, or core business are

direct suppliers, the channels of distribution and the core contributors (the women

producers). Simply stated, it is all of the interrelated parts that allow for sustainability.

To present the scope of Virunga Artisans (VA) better, we must first look at the East

African artifact ecosystem.

3.3 East African Artifact Ecosystem

To understand the overall space of the East African artifact industry, we will look at the

ecosystem as a whole. Traditional artifacts (baskets) from the region are rich in history

and served a functional purpose such as carrying harvested crops from the fields. The

elaborate design, craftsmanship and colors attracted high society consumers to keep

2 James F. Moore, death of competition, John Wiley & Sons , USA, 1996


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their valuables and became art and mementos of the region. The items produces in the

area range from baskets, carvings, candles, soaps, clothing and food items such as tea

and coffee. Typically there are 7 actors in a business ecosystem and the products are a

significant piece.

7 Actors of Business Ecosystem

To understand the model of the business ecosystem, we will identify the 7 types of

actors and their relationship with the East African artifact industry.

1. Customers : There are several customer categories for the end products, but the

primary end consumer are tourists and persons who appreciate unique artifacts.

The tourist market can be a consumer who purchases during a visit to East Africa

or after the fact. As awareness grows, products can be purchases through easier

portals such as specialty stores, museums and websites. Customers play an

important role with their feedback, whether they like the design, size, color and

price of a product helps link the process of the ecosystem. If the feedback is not

getting to the producers it impedes refinement of the product for sustainability –

this may be the case with VA. Although VA gets direct and speedy feedback in

California, the artisans in East Africa typically must shown in person, which

happens a couple times a year. In addition wholesalers and retailers are a major

customer segment also.

2. Markets: The 2 Markets for artisan products are local (Uganda, Kenya and

Rwanda) and export. ‘Encouraged by the preferential access accorded to a wide

variety of African products under AGOA (the Africa Growth and Opportunity Act),

many African artisans and exporters of African crafts are beginning to investigate

the crafts market in the United States. The traditional market for their goods has

been Europe, especially France and Germany.’3 The export market poses many

challenges to most rural entrepreneurs because they lack many strategic

business skills: inadequate buying trend information, logistical expertise and

regulatory hurdles to name a few. For example, the artisans get quality control

3 Finding New U.S. Markets for African Handicrafts: 2004 CHF International


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information only when the founders travel from the states. Locally, the market

opportunity varies greatly. The rural producers in Kenya have been able to

organize and offer products in lodges, airports and tourism hubs in many parts of

East Africa. This mild success does not seem inherent across most rural

producers especially in Uganda. For VA to penetrate this market, someone would

need to facilitate the role of a sales representative and visit prospective sales

outlets.

3. Products : As eluded to earlier, the artisan products from East Africa vary.

Masks, statues, carvings, tea, coffee, soaps, pottery and baskets are all sourced

from the region. Products are traditional, symbolic and have distinct appearance

that quickly identifies their heritage and origin. Although the products have

become synonymous with the East African rural areas, they are the least

complicated aspect of the ecosystem relationship. Raw materials are typically

abundant, however the channels of getting these products to markets and

customers are hurdles. Infrastructure like roads and telecommunications are

inconsistent at best. In a piece by Rupa Ranganathan and Vivien Foster titled

“East Africa’s Infrastructure: A Regional Perspective”, the authors noted the

infrastructure ranks consistently behind that of Southern and Western Africa. In

addition, the lack of sound infrastructure is a determinant of growth in the Region.

Simulations in their study also showed that ‘if East Africa’s growth infrastructure

were upgraded to the level of the best-performing country in Africa (Mauritius),

per capita growth would increase by almost 6 percentage points.’4

Although mobile telephony has increased 500% since 2005, East Africa stands

around 20% versus most countries at 60% to 90%. Mobile telecommunications

has a positive correlation on increasing distribution of products.

4. Processes: More than ever, ‘many organizations in East Africa recognize the

importance of performance measurements and benchmarks’.5 Organizations

that interact in the region such as 10,000 Villages and Solar Sisters have

4 East Africa’s Infastructure: A Regional Perspective: Ranganthan / Foster Sept 20115 Deloitte: 2011 East Africa Security Study Report


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implemented processes to enhance production, distribution and the livelihood of

their stakeholders. Solar Sisters “business in bag” allowed them to satisfy a vital

need and create a sustainable business. They provide women economic

opportunity while addressing the void of reliable electricity. Process benchmarks

also ensure a higher level of quality because it identifies mistakes and addresses

them at the source. Finally, simple and straightforward processes allow the rural

inhabitants to identify errors and provide training opportunities.

5. Organizations: Within any successful ecosystem, organizations and partners

play an important role. The value of the product or service will typically increase

when the members of the ecosystem support a common platform. East Africa is

an area of interest for many organizations that subscribe to self-sustainment, a

hand up not hand out theory. The Fair Trade Federation supports

sustainable trading partnerships and helps create opportunities to alleviate

poverty. They support and provide regulations to organizations like Fair Trade

Winds who operates three retail locations that sell products in line with Fair Trade

guidelines and help the underprivileged break their dependence on governments

for their well-being. Solar Sisters and 10,000 Villages are also enterprises that

we will discuss further that have parallel agnostic goals of trade not aid. These

organizations provide infrastructure and share practices that not only expand the

labor and dignity of the BOP, but also offer success models. Training is another

area that organizations focus on. For example the Fair Trade Federation roots

back to the 1970’s when alternative trade groups held conferences for working

towards “fair trade”. These gatherings produce training practices that can be

executed in other under developed environments. Working together these

organizations can help with on-ground management, distribution and quality

control

6. Stakeholders : A business ecosystem has multiple stakeholder relationships.

The stakeholders for artifacts of East Africa for example, could be the producers,

customers, governments and NGO’s. All of these participants have an influence

on the success (or failure) of scaling up their industry. The women of the region


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are typically the producers who make items for the sellers (another stakeholder)

to sell to customers. There needs to be an effective communication between

these groups to solidify the ecosystem. NGO’s and aid groups also have a role in

that they have a mutual goal and provide support and guidance to help fuel the

self-reliance of the women. Finally the government has its interest in the success

of the other stakeholders for primarily similar reasons. They can generate

revenue from taxes, encourage overall commerce and help increase the worth of

its people.

7. Government / Society : As mentioned, the government is the last actor in the

ecosystem. With its regulation it can play an important role. For example, the

recent success of Rwandan tourism has been largely impacted by government

influence. ‘Starting in 1994, the government of Rwanda put considerable effort

into developing a clear tourism strategy. With private sector and UN input, the

government successfully drafted a tourism strategy focusing on high-end tourism

with conservation at the core of its plan.’6 These types of efforts increased

tourism exponentially from 1998 to 2008. The Rwandan government took an

comprehensive approach that targeted foreign markets for tourism and local

society to increase acceptance of tourists.

The actors of the ecosystem need to be in harmony to “lift the tide”. A concerted effort

can breakdown if pieces of the ecosystem are misaligned or broken. For example, if

government regulation was not enacted in Rwanda after the tragedies of the nineties,

the tourism opportunity may not have grown to the prosperous levels of today.

Five Forces Analysis

To look at the artifact industry that VA resides in, a model is commonly used. Porters 5

Forces model is a tool for understanding where the power lies in an industry. The

figure 3-2 provides a clear depiction of the analysis tool.

Figure 3.2 Porters 5 Forces

6 Worldbank.org – “success of toursim in Rwanda”


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Source: Professor Nicolas Dahan, SMC

By understanding the power landscape, VA can better asses whether or not they can

take advantage of a situation of strength or improve on a situation of weakness and be

successful in helping the women artisans. As noted above, there are 5 important forces

that determine the power in a situation.

1. Supplier Power: This assesses how your suppliers affect your business model,

in particular pricing. VA sources their products from only the artisan women,

therefore the suppliers are in a power position. There is not an alternative

producer that VA can (or will) engage. In addition, because of VA’s mission to

enhance the livelihood of the artisan communities, there is little motivation to

“switch” sources.

2. Buyer Power: This aspect investigates the buyers of artifacts. Buyers may be

able to drive prices down because of alternative purchasing options such as

10,000 Villages or Fair Winds Trading. The number of buyers also has an impact

on your overall assessment. Buyers of VA’s products exhibit a strong demand,

therefore this aspect is balanced.


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3. Competitive Rivalry: Looking at the competitive landscape it is apparent that

there are several. From Africanbaskets, to 10,000 Villages and Fair Wind

Trading, customers have options for similar products. Ultimately the basket

weaver could go to another enterprise if the competition connects with them. This

aspect is high due to the niche product offerings that have many competitors.

4. Threat of Substitution: In this area, customers cannot necessarily substitute the

artifacts unless they were able to make them on their own. The artifacts are

unique and bear stories of the producers. However customers could choose

other East African products or products from different areas of the world. This is

why the tourism aspect is a strong link; customers who visit the area will likely

want to capture the memory.

5. Threat of New Entry: On one hand, this appears low due to the hurdles that VA

currently faces. Communication, physical geography, technology and overall

infrastructure limit the threat of new entrants. On the other hand, many

organizations and business enterprise see the possibility of entering a industry

that targets the “triple bottom” line; people, plant and profit.

Market size

In a study conducted by Ugandan Export Promotion Board (UEPB) and the International

Trade Center (ITC) titled Uganda Handicraft Export Strategy they jointly researched and

indentified various ways to increase export within Uganda. They have a common

observation that ‘various studies have established that Uganda’s handicraft sector

development is severely inhibited by supply side (production) and marketing

constraints’.7 The Global handicrafts market size does not lend much concrete data,

however according to the U.S. Department of Commerce, including all types of

handicrafts, the market is estimated at $10 billon. The market potential is present based

on the unique nature of the products, but given the U.S. sensitivity to price makes it less

attractive than other countries. Developed countries do have an appetite for products

that are exported from the developing countries, in particular the U.S., Germany, UK,

France, Italy, Netherlands, Japan, Switzerland, and Canada. According the Uganda

7 Ugandan Handicrafts Export Strategy, UEPB / ITC, 2005


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Handicraft Export Strategy findings, these countries account for more than 80% of the

“gift and decoratives” market consumption.

Growth rate

The findings in the study show that opportunity for growth is present. Ugandan non-

traditional export items (excluding coffee, tea, cotton and tobacco) was only 29% in

1999, but jumped to 63% in 2004. For example, India’s handicraft growth was optimistic

with $1.9 billion (US) in revenue in 2001 compared to $2.3 billion in 2003. Although

Ghana’s export revenue fell to $11.3 million in 2002 from $14.3 million in 2001, the

industry appears viable with limited market access. ‘The general view of crafts and

giftware is therefore that the markets are increasing at a relatively steady rate and hold

reasonable prospects for growth in the future.’8

Market composition

The strategic shift towards handicrafts goods is positive sign for artisan producers like

VA. ‘The over-reliance on a single primary agricultural commodity or a small band of

commodities with limited value addition cannot sustain national developmental

aspirations.’9 Coffee which has been a longstanding commodity has realized in Uganda

which provides and opening for the artifact sector. In 2002, coffee represented 60% of

total export revenue, the share dropped to 19% by 2004. Artifact export allows for the

composition of the market to diversify and support poverty alleviation.

The handicraft market typically consists of clothing and accessories, interior and exterior

decorations, household items, gifts, toys, and stationary. Globalization, tourism and

internet presence has increased the demand and they can be influenced by trends,

seasonality and environmental concerns. During Christmas, volume for green and red

baskets increases.

8 Ugandan Handicrafts Export Strategy, UEPB / ITC, 2005 9 Ugandan Handicrafts Export Strategy, UEPB / ITC, 2005


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Technology

In most SWOT analysis for the industry in this region, technology typically will fall under

a “weakness”. Limited access and infrastructure curtail integration and innovation. For

example, the lack of a consistent and timely communication channel to the area where

artifacts are produced hinders production changes. As mentioned earlier, products are

often seasonal and need to change with customer demand. The UEPB / ITC piece

emphasizes the need for “coordination and strengthening” of a sector of technological

development specifically for the handicraft industry. As difficult and daunting as this may

appear, it ultimately serves many purposes such as infrastructure enhancement, job

creation and economic vibrancy. Handicraft groups need unity (basket weaving

associations) to put pressure on the Ugandan government to prioritize innovation. The

research called out possible sources such as Makerere University or “Innovation Funds”

offered by the government.

3.4 Competition – Who are they and what do they do?

To address the management objectives of VA, we will detail competitors who are

sustainable in social enterprise space of artifacts and similar goods. Although these

organizations are labeled “competitors”, they have mutual goals of helping the people of

the East African region. 10,000 Villages, Rwanda Baskets and Fair Trade Winds

currently operate successfully therefore we highlight them and provide brief summaries

of their operations.

Ten Thousand Villages

‘Ten Thousand Villages' mission is to create opportunities for artisans in developing

countries to earn income by bringing their products and stories to our markets through

long-term fair trading relationships.’10 They are a source for fair trade unique artifacts

and gifts that are sold in North America by establishing long-term relationships with

producers. They support the cycle by re-investing in the area’s of production with

resources such as training and revenue.

10 http://www.tenthousandvillages.com/about-us/


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Rwanda Baskets

This organization based out of Seattle works to enhance the impoverished lives of

basket weavers in rural Rwanda. Their mission is to ‘empower the impoverished women

of Rwanda to rise above their subsistence-level existence by providing them with the

training, tools, support and markets needed to sell their baskets in the west.’11 They

focus on training, premium wages and supporting the creation of weaving groups.

Fair Trade Winds

A brick and mortar retailer and on-line seller of “unique gifts with purpose”. They are a

‘family-run business committed to helping alleviate global poverty and increase social

responsibility through fair trade.’12 They provide a substantial portion of their revenue to

farmers and artisans who produce goods in accordance with Fair Trade – products that

are made and distributed in a cooperation artisans, farmers, traders and buyers who re-

invest the profits in their communities to enhance health and education. This supports

the overall sustainability of the producers economically and environmentally.

3.5 Observations from visit to Artisans in East Africa

5elements was fortunate enough to have one of our team members visit the artisans in

East Africa. She was able to observe the culture, infrastructure and overall operations.

Key Players and Roles

The Rwandan development board has 2010 vision and expectation that Rwanda and

Uganda will begin to leverage tourism to enhance the overall state of the economy. The

impact is that there is increased support of non-profit organizations who wish to partner

in this effort. To ensure that economic benefit is spread through the community, policies

have been established whereby some lodges or major tourism organizations are forced

to re-invest 10% of their revenue back into the local economy. Those benefits should

11 http://www.rwandabaskets.com/about.html12 http://www.fairtradewinds.net//cindex.asp


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be seen in the form of contributions to local schools, community shops, etc. There is

also an expectation that NGOs will be responsible for training locals on business

opportunities.

Figure 3-3 2010 Vision Model

Source: 5elements consulting

Figure 3-3 provides a model of 2010 vision. VA would submit products and the artisans

would produce items based on demand preference. The artisan leaders have a

responsibility to manage the field operations, or production of baskets. The local lodge

market would provide a local economic opportunity to sell and be a apart of the eco-

system by re-investing in the community. For example, the Buhoma lodges are very

near by and would be an ideal location for a distribution hub NGO’s would partner with

these lodges not only purchase products (for downstream distribution) but guide

community progression and intertwine with the government. Ultimately this would allow

the government to fulfill its vision.

While observing the aspect of leadership, 5elements observed that each community of

Artisans has approximately 4-6 women who stand out as leaders (see figure 3-4 below).


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These women are respected because they are experts on weaving, dying, design, or

are simply elder artisans.

Figure 3-4 Virunga Artisans Org Chart

Source:

5elements Consulting

As noted the 4-hour walk is because the artisan groups are within 35-40 kilometers of

each other. Upon our visit to the Rbugeri Artisan group, a woman stood up and

identified herself as a chairperson. She recommended that each community should

meet twice a week to dye and distribute materials to ensure that the issue with color

variation is addressed. Other leaders volunteered to take the lead on measuring quality

and quantity. This took place at two different locations. The motivation is present to

become a more better, efficient group of artisans.

Current Artisan Logistics in Uganda

Transportation in Uganda is simply not readily available. Artisans are expected to

walk to a central area once a week, which typically happens once a month. This 4-hour

walk in each direction brings them to a central location where they collect supplies to

weave baskets. They take the supplies and weave individually back at their homes and


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therefore this process lacks an ongoing measure to determine quality, quantity, or

variation of color. It was apparent that artisans in each of these areas have different skill

levels. Figure 3-5 (below) provides the number of weavers that produce for VA.

Figure 3-5 Distribution of Weavers

In observing the payment process it was noted that Costance does not pay the

artisans in a timely manner. When the artisans meet, they provide their baskets to

Costance and expect compensation. Costance pays the artisans once the baskets have

been sold to the Virunga Artisan organization. After conducting primary interviews with

the artisans they stated that they would prefer to see their money once they provide the

product. They also expressed disinterest in selling baskets through the lodges because

the lodge charges a 500 Schilling commission. According to Virunga Artisans

organization, Costance is provided with enough money to purchase supplies and pay

the women at the point of delivering the product to Costance. There is a lapse in the

process.

Another aspect of processes that was observed was the distribution of goods to the

end consumer.

Figure 3-7 Export Distribution



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This primary allocation of sales occurs as described in figure 3-7 (above). Baskets are

provided to Costance and then shipped via postal service to VA who then sells to

customers in the U.S. In figure 3-8 (below), VA collects baskets while visiting East Africa

and travels back with the products.

Figure 3-8 Export Distribution retrieved In East Africa


Products are sold locally, although not as often as they exported, figure 3-9 below

portrays the local process – when the artisans sell to tourists from the VA’s local shop.

From observations, these products are often the items that did not make the quality

control standards for export.

Figure 3-9 Local Distribution In East Africa


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Training

During the visit, there was no evidence of formal training. Weavers are expected to

support one another with advice from Costance or Paul or rely on peer support. They

did not appear familiar with the training materials such as the purchase order, pantone

book, basket catalog and manual. Master weavers ultimately train other weavers as

they desire and do so without financial incentives. Figure 3-10 are examples of the

training materials.

Figure 3-10 Training

Material examples

Source: 5elements

consulting

Motivation

When interviewed, artisans say they weave to obtain money for food, health, education

and help with farming. They are not motivated to sell at the lodge because they have to

pay a commission for baskets sold. When asked how much they get paid for a basket,

they all turn to Costance. It appears that there might be room to clarify and motivate

based on quality and color variation.

Governance


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Payments disappear between the reaching Costance and the artisans. Payments also

disappear from the Lodge to the community. There is a clear lack of governance or

checks and balances in terms of finances. For instance, when Costance was asked

where the money for the supplies and payments were for the recent order, she simply

shrugged her shoulders with no follow up or accountability.

Although many of the observations are known, they provide roadmaps to repairable

situations. Many start-up’s or lower resource enterprises face these challenges, but as

with most kaizen processes, identifying areas of opportunity is half the battle.

3.6 Base of the Pyramid (BOP) – Examples of success

There are examples of success at the Base of the Pyramid. We looked at two other

endeavors that have similar goals of supporting sustainment without providing a

handout. Mercy Corps addressed unhealthy feeding practices of school children with

their Kebal project and 10,000 Villages is engaged the fair trade supply of crafts from

the developing world.

Mercy Corps – Kebal Food Carts: Indonesia

In 2010 Mercy Corps initiated a pilot program to address under-nourishment of school

age children in Indonesia. ‘According to a United Nations Children’s Fund (UNICEF)

report released in January 2010, one-third of Indonesian children under the age of five -

nearly 8 million in total – suffered from the effects of malnutrition.’13

Mercy Corps launched a pilot called Kebal, which provided nutritious, high quality food

options via food carts to young children. Other primary goals were to create

employment opportunities for locals and spin off a profitable, self-sustaining business

model that would no longer need Mercy Corps oversight.

They selected local vendors with influence and motivation and created a healthy menu

with the guidance of a nutritionist. The items were simpler to prepare, but not completely

13 Nurfika Osman, “Indonesia Earns Poor Marks For Child Malnutrition,” The Jakarta Globe, January 25, 2010.


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without preparation and time consumption. Once Mercy Corps identified the vendors,

create the menu and trained the operators the program successfully moved forward.

Based on feedback from customers and mothers of school children, the program was

successful. Children and mothers enjoyed the healthier options that were not only

affordable, but they saw better results in school participation due to proper nutrition.

A concern arose because although some vendors were profitable, Mercy Corps was still

the primary funding source of training and food. The subsidized funding was running out

shortly.

After looking at several business model options, the Kebal program decided to create

cooking centers to produce the food and sell to vendors who concentrated on selling.

‘The food is prepared by KeBal employees in a cooking center, which starts work just

after midnight to make food to sell to eight vendors, who begin their routes around 5

a.m. The vendors take the risks and keep all the profit on the food they sell.’14

By creating a process of management, oversight, training and community investment

Mercy Corps was able to successfully hand of the pilot program to the Indonesian

local’s. ‘KeBal is about to open a second cooking center, and is planning to have six by

the end of the year, each providing food to at least eight vendors. Next year, as soon

as Indonesian franchise law allows, Kebal will also start selling cooking center

franchises. By 2013, the company hopes to own 21 cooking centers and have 10 more

owned by franchisees. That will allow it to feed 6,000 children daily and take in

projected revenue of at least $2 million a year.’15

Ten Thousand Villages: Worldwide Fair Trade Artifact Sales

Ten Thousand Villages seek to support artisans in developing countries to earn income

by selling their products and stories through long-term, fair trading relationships. As with

Virunga Artisans, they look to help with trade not aid.

14 http://opinionator.blogs.nytimes.com/2011/05/23/in-food-deserts-oases-of-nutrition/15 http://opinionator.blogs.nytimes.com/2011/05/23/in-food-deserts-oases-of-nutrition


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Through 74 stores in across the US and e-commerce they sell the creations of artisans

and provide support up and downstream.

The enterprise creates long-term buying relationships with artisans from around the

world and provides start-up and follow up training. According to publish information and

research their success is strongly correlated to three areas; advanced and consistent

payment, long-term relationships and design collaboration.

Paying the artisans in a consistent, timely manner allows for planning and enables them

to provide health care and education for their families. By providing advanced payment,

it begins the cycle of consistency that further allows for consistent production. When

the basic needs of the artisans are met, they can focus on producing goods that lead to

bettering their lives.

The long-term relationship also provides planning opportunities for the artisans. This

enhances their capacity to be successful since they receive a consistent source of

income to use for shelter and food (in addition to the healthcare and education). The

buying relationships can also cultivate training programs. Their average length of

relationships is 13.5 years.

The organization collaborates with artisans on product designs. Trend and style

information helps artisans adapt traditional skills and pieces of artifacts. Items that are

attractive to producer market may not have the same appeal therefore the demand is

limited. The organization works with the producers to train and adapt so items become

“more attractive” to selling markets.

Solar Sisters: Empowering Women through Enterprise

Solar Sisters is based in Rhode Island was started by Katherine Lucey, an ex

Investment Banker covering the energy sector with the mission to eradicate energy

poverty, and empower women with economic opportunities in the developing world.

They have management team consisting mostly of Ugandan origin and an experienced


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board of directors from both the U.S. and Uganda. The management structure is drawn

from different professional backgrounds with prescribed powers and duties.

They use market-based (Avon / Mary Kay) program to distribute solar technology and

create women entrepreneurs. These women who would otherwise not have access to

starting their own business are provided a ‘business in a bag start-up kit’. This kit

consists of $500 dollars of merchandise (solar lights) and they provide consistent

business training and marketing support. The women then have 90 days to sell this

merchandise and get to keep 25% of the sales price.

This model is successful for several reasons:

Ongoing local presence on the ground in Uganda - a seasoned program director

who has a strong background in information technology and system

management.

They have regional coordinators who are skilled community organizers.

Management structure - they have a professional management team that

leverage the abilities of junior managers and free up top management for

strategic issues.

Local talent – they draw on local talents to execute its business plan and a

predominantly local advisory board.

3.7 Common Takeaways from Competition / Best Practices.

Whether it is a competitor in the sector or another BOP enterprise, there were a few

transparent commonalties that help the organizations sustain themselves. In addition,

these “takeaways” also support the betterment of the developing nation’s rural poor.

Local Management – There is a saying within the famed “Toyota Production

System”, genchi genbutsu, which means to go and see. Having management

locally is integral to fully understand what is going on. This allows for timely


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recommendations to processes and better coordination of the moving parts of a

business. There is no substitute to seeing it for your self.

Partnering – Many of the operations partnered with other groups that had a stake

in the success of the operation. Whether it was a financial or regulatory

partnering, having more oars in the water helps move the initiative forward.

Partnering also provides an operation views that may be different from the

conception team, which can help take the operation to the “next level”. Typically

partners can bring additional resources to the table, such as training.

Training – On-going training is was also a consistent thread in success of the

above preceding examples. Although weavers may be master of their craft,

training allows them to adjust the product to meet customers changing demands.

Consistent training also ensures efficiency in the sense that quality in increased

and therefore less waste. Finally, training can help create organizational structure

as better producers can take on leadership roles.

Up-front payments / direct payments – Providing compensation allows for

planning by the producers. They plan for their children’s healthcare and

educational needs. Paying producers earlier in the process provides further

motivation and allows for focus on the “task at hand” as other primary needs are

met. Since corruption is a hurdle, establishing a more direct payment process

eliminates the opportunity for payments to be “re-directed”.

3.8 Chapter Summary

Business needs to be strategic, even if the “heart” drives the organization. To create

something with a agnostic goal to make a better environment is a wonderful endeavor,

however it must begin to take form a profitable enterprise – if only to re-invest those

profits. Understanding the eco-system of the industry allows to you to see where gaps

are and how to correct the holes. Planning for interactions with you suppliers and other

stakeholders is key and can help create a sustainable model. Examples like Porters

“Five Forces” provide an objective analysis of your ability to be successful.


Chapter 3

As evident in the research detailed in the Uganda Handicraft Export Strategy, the

market opportunity is viable. The market for artifacts continues to gain steam especially

since Uganda continues to diversify its export offerings. Uganda has seen coffee and

other previously dominant exports reduce and eco-tourism and social enterprise are

increasing the exposure of handicraft goods to a broader audience.

The competition not only increases that overall exposure, but they offer lessons to be

learned from. Whether its training, distribution, management or sales channels, there

are best practices that be utilized. These practices not only appear within the

competitive space of artifacts, but have proven successful in other BOP trials such as

Kebal food carts.

Ultimately, the industry commands more attention and as corporate social responsibility

(CSR) continues to provide a spot light on doing things the “right way”, consumers will

vote with their dollars. The following chapters will provide analysis into how to be a

larger force in the “artifact purchasing eco-system” and empower the women of the

region.


Documents

SOSERVMAN Project_Ch3_[Final Draft] Copy