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.
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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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Source: 5elements consulting
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Source: 5elements consulting
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
Source: 5elements consulting
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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Source: 5elements consulting
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.
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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.
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