STRATEGIC MANAGEMENT

Prepared by:

RIDDHI B. DESAI (QA 3)

HEMALI A. GANATRA (QA 5)

RUQAIYA VASI (QA 17)

FORTUNE AT THE BOTTOM OF THE PYRAMID

IS THERE REALLY A FORTUNE TO BE MADE AT THE BOTTOM OF THE PYRAMID..??

THE WORLD’S MOST EXCITING, FASTING GROWING NEW MARKET

4 billion people

BOP

Living on less than 2 $ per

day

Latent

4-5 billion

Consumer

NGO, CIVIL SOCIETY

ORGANISATIONS

PRIVATE SECTORS, INCLUDING MNC’S

POLITICIANS, PUBLIC POLICY

ESTABLISHMENTS

AID AGENCIES

The poor has no money

People in BOP cannot use advanced technology.

Distribution to BOP market is very impossible.

BOP MARKET IS not connected

ASSUMPTIONS FACTS

ASSUMPTIONS FACTS

Poor are too concerned with fulfilling their basic needs to “waste” money or non-essential goods.

Goods – sold in developing markets are cheap and hence there is no

room for a new competitor to come in and turn a profit.

CHALLENGES TO TARGET BOP

BOP MARKET IS HIGHLY FRAGMENTEDCHANGING PRODUCTS AND BUSINESS MODELS4 P’s OF MARKETINGDEVELOP EFFICIENT CHANNELS OF COMMUNICATION AND DISTRIBUTION

EDUCATE, TRAIN AND MAKE THEM SELF RELIANT4 A’s OF MARKETINGLATENT NEEDS OF BOP CONSUMERSCHANGING PRICING MODELS

POOR SHOULD NOT BE TREATED AS POOR BUT AS

CONSUMERS AND PRODUCERS AS WELL.

CREATION OF WIN –WIN SITUATION

LEARNINGS FROM BOPFOR

MNC’sCAPITAL

INTENSITY

SUSTAINBLE DEVELOPMENT

INNOVATION

Innovative Practices at the bottom of pyramid

Known problems and known solutions: what is the missing link?

Problem

• IDD• 200 million

children worldwide

• 25% iodized salt in India

• Distribution

• Education

Solution

• Adequate dose of iodized salt in food!

• In affordable price

The Annapurna salt story

Advanced microencapsulation

technology- K15

Direct education campaigns

TV ads

Distribution efforts

Affordability

Unique demands

Poor educational attainment

$8,000 $30

Known problems and unique solutions

Lower knee Prosthesis-

$8,000

Need for Customised Prosthesis

Jaipur foot

Examples

ITCe-Choupal

ICICI SHGs

EID Parry

Agriline

Known problems and system wide reforms

Existing system

has focus on sub-systems

Companies identified

problems in existing system

Complete transformation in existing

system• Increased

cost efficiency• More

informed and efficient BOP

consumer

Scaling innovation

Limited

reach

Limited resourc

esCommercialisation

Managerial skills

E+CoPioneer

alternative energy

producer

Angle and seed fund investor

Voxiva System

Surveillance of emerging public health crises in

Peru

Monitor the outbreak of

infectious diseases

communicate relevant

information to the central govt.

authority

Case studies

ICICI bank at the Bottom of pyramid

Strategic GoalsTo increase banking penetration in rural

areas through innovative ways of

defining distribution points

To prepare and react for important rural market

by introduction of microfinance

To support the downtrodden as a

good corporateCitizen

ICICI bank at the Bottom of pyramid

The direct access, bank led

model

The indirect channel

partnership models

The direct access bank led model of ICICI

Purchase of Madura bank

Creations of savings program and provisions of direct microloans

Expand its corporate business

Scaling of SHGs ( Self helping

groups)

SHGsSelf Help Groups (SHGs) are a homogenous

group of 10-20 individuals who

come together for saving.

Positive impact • Expands its customer base, gain access

and increase profits• Confidence, communication, anddecision-making in financial matters

Indirect Channels Partnership Model

Social mobilization strength of NGOs and MFIs

Financial strength of the bank

MFIs

Rural kiosks

DHAN Foundation( microcredit, researching the idea of kiosks and looking at “rural information and communication technology (ICT) projects

CASHPOR (Credit and Savings for the Hardcore Poor) and SHARE(to catalyze the MFI movement in India)

ITCe-ChoupalEID

Parry

N- Logue

PRADAN (expand their SHG lending and, in the process, learned about setting up women’s savings and credit groups

ConclusionICICI has made profitable inroads into serving the BOP. “Banking with the poor has undergone a paradigm shift”.

ICICI has increased the number of SHGs from 1,500 to more than 8,000 within the two years

Fruitful partnerships with more than 10 major NGOs and MFIs who all have strong physical presence within the rural areas

Mankind at the bottom of pyramid

Pfizer, Abbott, Roche, GSK(Top level)

Zydus Cadila, Alkem, Aristo

(Mid level)

Mankind( Bottom)

Strategy used by mankind at BOP

Mankind bombarded the

market with low-priced drugs (up

to 50 percent cheaper)

Initial years, the company worked on increasing its

share in the prescription

business.

Mankind entered the OTC segment with products like

Manforce, Unwanted 72

Increased presence in the chronic therapy segment to increase its share from 0.5 % to15% which is the average industry

growth

Cancer drugs will be sold at 40-60 percent

cheaper than its competitors.

Plunging in export mainly to African countries, where

again Mankind will again target smaller towns and cities in

these markets.

Strategy used by mankind at BOP

How do they keep their prices low?

Misconception( quality being compromised)

Mankind don’t have highly-paid

managers and their margins are lower than

industry average.”

Margins are low as 16% as compared to industry average of

18%

ConclusionMankind is the fastest growing pharmaceutical company with a growth rate of 26.8% in IPM

Mankind started with a team of 400 medical representative and has expanded upto 2000

Aims at being in the top 3-5 position in next five years