- 1. Business model innovations forscaling-up drinking water
businesses indeveloping countriesHeiko GebauerGeoGen Conference
2013Environmental Social Sciences (EAWAG), Zurich,
SwitzerlandCenter of Service Research, Karlstad University,
SwedenAddis Ababa, February 2013
2. A viable water market creates business opportunitiesBoP (Base
of the Pyramid) marketshare of total watermarkets0% 20% 40% 60% 80%
100%AfricaLatin AmericaAsiaEastern EuropeBoP Water Market ToP Water
market$3.2b$5.7b$6.4b$4.8bSource Rangan, 2009, http://300in6.org,
Hammond et al., 2007. 3. Appropriate water treatment technologies
existHousehold (individual)treatment
technologiesCommunity-basedtreatment technologiesSmall and
medium-sized firms (SMEs) orNGOs Ceramic filters (NGOInternational
DevelopmentEnterprises (IDE) Tulip siphon filter (Basicwater needs)
Reverse osmosis waterkiosks(Naandi, Sarvajal) Chlorination
plants(Aquasure) Bone char filters (NDC) Arsenic removal
(Trunz)Multinationalenterprises (MNEs) Unilever Pureit filter
Procter&Gamble withwaterdisinfectant PUR Tata Swach(rice
huskash, pebbles, and crushedcement) Grameen Veolia
(arseniccontamination)Research institutions SODIS Safe water
throughsocial behavior change Gravity Driven Membrane(GDM) Bone
char filters (OSHO) Bone char filters(OSHO) 4. But why is it so
difficult to scale-up?Market potentialAppropriate
technologiesBusiness model innovationKPKAKRVPDMCRCSC RKP Key
Partner, KA Key Activities, KR Key resources, VP Valueproposition,
CR - customer relationship, DM distribution & marketing,Cost
Cost structure, R - RevenuesBoP Protocol 2.0Simanis and Hart, 2008
5. Sampling business ventures in the water market Research
methodology Qualitative case studies Case characteristics Variety
(type NGO, private firms, size - SMEs,MNEs, or development stage
(surviving, successful, or scaling-up)Data collection &
analysis Primary data workshop, interviews, observationsSecondary
data Reports, presentationCase study descriptions narratives,
critical incident techniquesContent analysis within-case,
cross-case Examples -Aquasure, Naandi water kiosks, Sarvajal,
Unilever Pureit filters,IDE, Medentech, P&G Pur, Antenna
Watasol, PSI, 2AEP, AGUATUYA,Healthpoint Services E-Health
Points,Inter Aide, IWADCO, Manila Water, PSIKenya, Osho, Veolia
Grameen, Suez Environnement PALYJA 6. Scaling-up means continuous
businessmodel innovationsPenetrating watermarketsCreating
watermarkets whereneeds existBusiness
modelinnovationTimeExistenceSurvivalSuccessTake-offMaturity 7.
05001000150020002500300035004000Installed watersystems2008 2010
2014 20162012...Holistic extension of the business
modelSarvajal(Franchisor)(5000 $
/2600$)Micro-entrepreneurs(Franchisees)500 $ (40%
ofrevenue)Communities(Villages 3000)0.12 $ for 20liters1 : n 1 :
mSkills and methods for maintaining and monitoringthe
systemsIndividual skills bright brains to repetitive gainsMethods
Franchisee strategy tool / approach tobalance own / borrowed
capitalBankMicro-creditinstituteSource: own interpretation and
interviews. Based on Macomber and Sinha (2012)Business model
innovation at sarvajal affordable, accessible, and pure water 8.
Summary of the key finding Strategic planning approaches
(objectives and aims for combiningsocial and profit-oriented goals)
Value proposition & marketing (e.g., PSI as social marketing
expert anddeep knowledge of BoP customers) Business model extension
from the top of the BoP to the bottom (e.g.Unilever, Tata versus
IDE ceramic filters as symbol for poverty) Scaling-up as
scaling-out or extending the scope (e.g., Naandi smallto larger
villages, expand the service range to grocery items, mobilephone
services and newspapers) Managing a network of micro-entrepreneurs
to support the distributions(e.g. Unilevers Shakti (empowerment)
program, micro-entrepreneurdisinfecting jerry cans at the
lakefront) Micro-credit (Unilever and Tata) and financial
institutions (Aquasure) 9. ConclusionExperimenting withbusiness
models is a smallstep, one giant leap to makewater markets
works