ET Prodigy Case Study

Solution

Submitted By,

Sujit Kumar Sahoo

Category A
Email Id: u108111@stu.ximb.ac.in
Mobile No: +91 9777578075
PGDM from Xavier Institute of Management, Bhubaneswar
Work Experience- Nil
The Proposed Model

I would choose the “Sustain World” business model. My business model of “Sustain World”
would have two model components as presented below

1) The Franchise Model enhances social enterprises by addressing not-for-profit challenges

of replication and scale. For example, a cafe´ that employs disabled people may be
profitable only when it employs twelve or fewer disabled people. However, if franchised,
the cafe´ social enterprise can create employment for hundreds of disabled people
through numerous outlets. Sustain world will identify such existing ventures, small but
novel in concept, and franchise that venture and brand it. By branding a social venture,
substantial amount of brand equity can be charged.

2) The market intermediary model of social enterprise provides product development,

market access, and credit services to its target population: small producers (individuals,
firms, or cooperatives). Its mission focuses on facilitating clients’ financial security by
helping them develop and sell their products in high-value markets. The social enterprise
purchases the client-made products at fair prices, and then sells the products at a margin.
Commissions or mark-up charged on client-made products provides income to the
enterprise that is used to pay operating expenses and programme costs.

Why?

1) To find a entrepreneur and establish a new business is much more difficult than scaling up
an existing venture, by franchising it. As per the data available (from various sources on
the net) on the success rate of new ventures, the success rate is roughly 1 out of every 20
ventures (5% success rate), and that too it takes time to take off as really successful
venture.
2) Its ( Cascade World) application is narrow and limited to economic development or
programmes that support employment and entrepreneurship.
3) Depending on the type of business, start-up costs and capitalization requirements can be
high.
Question No 1. What would it take for the model to become self sustaining and emerge as a
viable proposition?

Ans. The Franchising model would help “Sustain World” achieve economies of scale and with it
viability or profit. As well, franchising enables mass replication, and thus, increased breadth of
scale—geographical coverage—or depth of scale—volume of clients. Hence, the franchise
model enhances scalability; social and economic value creation through replication.

Sustain World would brand the existing venture. Branding would be through social media. The
costs of branding a social enterprise would be cheap and sometimes free of cost, as media would
like to associate itself with the noble cause. This will provide tremendous visibility to the
venture. Branding of a social entrepreneurship venture would create a viral buzz, across
boundaries which would bring in large consumers for the product/service.

Also Purchasers pay franchise fees to receive the social enterprise model, methodology, and
ongoing technical support from the franchiser (Sustain World). The brand value of such a
franchise has obviously become high due to continues branding efforts by “Sustain World”.
Buying a franchise enables an organization to focus on running operations of a proven enterprise,
rather than worrying about what type of business to start, which products to sell, or what markets
to enter. Becoming a franchiser creates a new social enterprise for the organization that leverages
its industry and business expertise and, in turn, creates new social impact opportunities and
another source of earned income.
“Sustain World” can also adopt a fee-for-service model as an operational model. The fee-for-
service model of social enterprise commercializes its social services and then sells them either
directly to the target population: individuals, firms, communities, or to a third party payer.
“Sustain World” would provide its inputs/consultancy to such groups/ enterprises whose mission
centres on rendering social services to clients in the sector in which it works. The social
enterprise achieves financial self-sufficiency through fees charged for services. This income is
used as a cost-recovery mechanism for the organization to pay service delivery and business
expenses, such as marketing and accounting, associated with commercialization.

The strengths of the market intermediary model lie in its ability to reach large numbers of clients,
and its potential to realize the sustainability inherent in its self-financing model.
“Sustain world” will in this case function as marketing supply cooperatives—such as Fair Trade
organizations, agriculture, and handicraft group.
Question No.2 How would Sustain World Identify individuals/communities to provide
advisory services?

Ans. “Sustain World” will obviously look for such individuals/communities which will be
synergetic fit to the two models (Franchise and Market Intermediary) adopted by it. It should
look for social ventures which can be branded or franchised on a large scale and can be easily
replicated across geographies.

It could also look at social enterprises which are being exploited due to tie up with greedy market
intermediaries (who exploit these ventures due to information asymmetry, a huge setback in
Indian scenario). Sustain world can tie up with such individuals/groups and provide them with
fair prices for their produce.

Of course “Sustain World” should look for groups and communities which are socially
downtrodden and have lower levels of income ( house hold income <5000 rs/month) and
consider socio-econmic parameters which are a pre-requisite and assumed in this case. However
from a strategic point of view what “Sustain World” should identify existing ventures/enterprises
which present a Hybrid (a mix of non-profit (social) and profit) business opportunities.

The imaginative blending of non-profit and for-profit strategies will produce unexpected forms
of hybrid vigour. Also, the more business-like aspects of a hybrid venture can make it seem more
normal than a venture, where there may be no realistic prospect of profit.

Hybrid enterprises model some of the novel forms of social and environmental value creation
that will be central to business success and sustainability in the future.

The enterprises that “Sustain World” would look for should satisfy the following criteria. The
individual/group should

1) Rather than focus on any marketplace demand that provides profits regardless of its
societal impact, they seek to accomplish only goals that benefit society as a whole.
2) Rather than taking pride in any positive difference they may make in society regardless of
the effort expended, they use profit as an efficiency measure for ensuring that their
resources are not wasted.
3) Third, as their profits fund their growth, they must keep themselves independent from
the whims of market forces, like: the desire for venture capitalists to earn back their
investments more quickly; a foundation's requirement to have social goals treated in one
specific way; or government's lowered funding in the face of congressional budget cuts.
 Question no 3. How many people can Cascade World or Sustain World impact in the first
three years ? How can the model be made scaleable ?

Ans. To answer this question, let us look at the reach achieved and targeted by award winning
Social Entrepeneurship ventures across the world.

The Table below gives the list some of the few 2007 SKOLL Awardees (which recognizes
valuable social entrepreneurship ventures across the globe). The table also provides the reach
achieved by these organizations over the years of their operation. Hence the reach achieved by
these ventures per year has been calculated. Assuming an optimistic outlook for “Sustain
World”, the Best Estimate for Sustain World is to be able to reach out to 0.81 million people in
3years time.

Name of the Social Reach (in

Serial No Venture millions) Years In Operation Reach Achieved/Year (In Millions)
1 Neuva Foundation 5 22 0.23
2 Free The Children 0.5 10
3 Friends-International 0.85
4 Gram Vikash 0.23
Manchester Bidwell
5 Corporation NA NA
6 Verite NA NA
7 Youth Build ,USA NA NA 0.008
8 Kashf Foundation 0.15 12 0.0125
Average Reach
Achieved 0.27
Best Estimate for
Sustain World (in
million) 0.81

Note: The Table contents are not taken into consideration for the word limit
 The Table below gives the Targeted Reach of the same award winning ventures. The Best
Target Estimate for Sustain World is 1.0254 million

Serial Name of the Social Target Segment to be Reached Reach (Targetted)/Year Founder Social
No Venture (In Millions) upto 2010 Entrepeneur
1 Neuva Foundation 1.5 0.5 Vicky Colbert
Craig and Marc
2 Free The Children Kielburger
3 Friends-International Sebastien Marot
4 Gram Vikash Joe Madiath
Manchester Bidwell
5 Corporation 0.018 0.009 William Strickland
6 Verite 1 0.33 Dan Viederman
7 Youth Build ,USA 2 0.666666667 Dorothy Stoneman
8 Kashf Foundation 0.6 0.2 Roshaneh Zafar
Average Reach Targeted 0.34
Best Target Estimate for Sutain
World ( in million) 1.0254
The best way forward for sustain world to scale up its model is to look to sustainable
entrepreneurship. Sustainability entrepreneurship is a sum of all the 12 elements of the model (as
shown in the figure above) operating in unison. It cannot be achieved by subscribing only to
social or environmental entrepreneurship. The sustainability entrepreneurship model does not
represent a 'direct route' from any of the economic, environmental or social entrepreneurship
poles to sustainable entrepreneurship, but rather the relationship between these three poles First,
entrepreneurs and their enterprises have to be financially sustainable to survive within the current
economic and regulatory systems. An organisation just focusing on the environment as its goal
without a means of income beyond government subsidy or philanthropy cannot be scaleable; for
example, a change of government or change of heart by the philanthropist could remove the
income for that organisation and stop the environmental work. Concentrating on environmental
values causes social damage: that is to say, creating a nature reserve can exclude the local
community from a resource traditionally harvested from the land the nature reserve now
occupies. Similarly, concentrating on the social values can cause financial failure and
environmental damage. Take a fairtrade organisation as an example: it can help bring
disadvantaged communities out of poverty, but, if the organisation cannot sell the fairtrade
products, its financial failure stops its good work.