REPORT ON MANAGEMENT TRAINEESHIP SEGMENT-II
Submitted by: Soumyajit Auddy(10201053)
(MANAGEMENT TRAINEESHIP SEGMENT-II REPORT SUBMITTED FOR PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE MASTER IN BUSINESS ADMINISTRATION ON RURAL MANAGEMENT)
Prof. Prasun Kumar Das Associate Professor, KSRM
Mr. Shiv Shakti Kumar Project Manager Urja Unlimited
Prof. Prasanta Parida Assistant Professor, KSRM
KIIT SCHOOL OF RURAL MANAGEMENT (KSRM) BHUBANESWAR, INDIA
MANAGEMENT TRAINEESHIP SEGMENT-II (MBA-RM 2010-12)
First and foremost, I am thankful to Prof. (Dr.) L. K. Vaswani, DIRECTOR, KIIT School of Rural Management for placing the Management Traineeship Segment-II (MTS-II) component as a part of our course curricula. I would like to express our gratitude to Professor (Dr.) Prasun Kumar Das, Coordinator, MTS-II to facilitate throughout by playing different roles as mentor, coordinator and supervisor and for inputs and moral support for designing and completion of the report. I am thankful to the faculty guide Prof. Prasanta Parida for his guidance and assessment of this report. Prof. Prasanta Parida inspired me greatly to work in this project. His willingness to motivate me contributed tremendously to my project. I also would like to thank him for referring to me examples that related to the topic of my project. My heartfelt gratitude goes out to my reporting officer Mr. Shiv Shakti Kumar for giving me an opportunity to conduct research on such an important topic as Market Research for the launch of Solar Tube Light under Hawkers Lighting Program. He worked as a mentor and guide and provided valuable inputs and leadership in every stage of my research. Besides, I would like to thank my colleague in the project Mr. Alok Pandey, whose valuable inputs contributed immensely towards successful completion of this report. In order to complete fieldwork successfully, I would like to present special thanks to all the research participants and hawkers who provided their valuable time and made our stay meaningful and study valuable. Finally, an honorable mention goes to my parents, Mr. Swapan Kumar Auddy and Mrs. Mallika Auddy for their understanding and support to me in completing this report. Without the help and continued support of the above-mentioned people this report would not have seen the light of the day. I am also extremely happy to reveal my special thanks to Mr. Debabrata Chakraborty, Mrs. Dona Chakraborty, Mr. Deepak Khokhar, Mr. Jai Prakash and Mr. Chirag Singhal and my classmates for their moral support and inspiration. -Soumyajit Auddy(10201053)
Executive Summary The title of the project is “Launch of Solar Tube Light under Hawkers Lighting Program” conducted by Soumyajit Auddy, student of KIIT School of Rural Management, in the host organization Urja Unlimited, in the Faridabad district of Haryana. The research was done to assess the best plan for the launch of solar tube light under Hawkers Lighting Program in the Faridabad region. The objectives of the Hawkers Lighting Program are: To provide clean lighting solutions to hawkers Reduce health hazards which results from inhalation of obnoxious fumes as a result of using kerosene or Petromax lamps Provide livelihood opportunities to hawkers and increase their income Reduce environmental pollution
Urja Unlimited is working on a strategy to launch two of its products, namely solar tube light and solar lantern in the Faridabad district having the street vendors and hawkers as its customer base. The project was done to assess the feasibility of three plans namely, the full payment scheme, the installment scheme and the bank linkage scheme and to position and launch the product in one of the above mentioned three plan segments which is the most appropriate.
The methodologies followed for this research are enumerated in the following points: Firstly, a structured questionnaire was designed with the objective of doing a market survey to understand the needs of the target consumers of the product. Secondly, promotion of the solar lantern and tube light was done through the distribution of flyers and posters among the hawkers and vendors of Faridabad district. The aim was to target as many number of hawkers and vendors in Faridabad district as possible. The findings of the research are listed below: Robust advertising and promotion of the product is needed to capture market and consolidate market share being the first product of its kind in the market. Pricing needs to be re-worked since most consumers find price of the product to be exorbitant.
Brand promotion activities need to be undertaken to increase brand value of the product. Hawkers need to be brought on a common platform and hawker groups need to be formed. These groups will then be linked with banks that will provide them with micro loans for purchase of the lighting solutions. In this way the cost of recovery of installments and the risk of installments can be curtailed. The formation of hawkers groups or hawkers SHGs will be formed in the following pattern.
A robust distribution network needs to be developed.
CHAPTER I- INTRODUCTION BACKGROUND OF SOLAR ENERGY IN INDIA URJA UNLIMITED- HAWKERS LIGHTING PROGRAM OBJECTIVES OF THE HAWKERS LIGHTING PROGRAM CHAPTER 2- ORGANIZATION PROFILE HAWKERS LIGHTING PROGRAM COMMUNITY SOLAR STREET LIGHTING PROGRAM LIVELIHOOD AND ENTREPRENEURSHIP ASSURANCE PROGRAM CENTRE URJA UNNATI PROGRAM TRAINING PROGRAMS ON SOLAR ENERGY CHAPTER 3- METHODOLOGY CRITERIA FOR SELECTING THE VENDOR LIMITATIONS FACED DURING SURVEY CHAPTER 4- DATA INTERPRETATION AND ANALYSIS ANALYSIS OF THE SURVEYED DATA TECHNICAL SPECIFICATIONS OF SOLAR TUBE LIGHT CUSTOMER NEEDS REPAYMENT PLANS UNIQUE SELLING PROPOSITION OF SOLAR TUBE LIGHT SWOT ANALYSIS COMPETITION SITUATION PORTER’S FIVE FORCES ANALYSIS SALES OBJECTIVES BENEFITS OF USING SOLAR TUBE LIGHT FOR HAWKERS RECOMMENDATIONS FRAMEWORK FOR HAWKER SHGS CONCLUSION CHAPTER 5- BIBLIOGRAPHY 1 1 3 3 4 5 5 5 6 6 7 7 8 9 9 12 13 15 17 18 19 20 22 22 23 23 25 25
Chapter I- Introduction
Background of Solar Energy in India
The Indian solar energy sector has been growing rapidly, in the past few years, majorly due to Government's initiatives such as tax exemptions and subsidies and depleting energy sources. Due to technical potential of 5,000 trillion kWh per year and minimum operating cost, Solar Power is considered the best suited energy source for India. Today the Solar power has an installed capacity of 9.84 MW which is about less than 0.1 percent of the total installed renewable energy of India. Currently total installed renewable energy stands at 13,242.41 MW as per MNRE. India's power sector has a total installed capacity of approximately 1, 46,753 Megawatt (MW) of which 54% is coal-based, 25% hydro, 8% is renewable and the balance is the gas and nuclearbased. Power shortages are estimated at about 11% of total energy and 15% of peak capacity requirements which is likely to increase in the coming years. The cost of production range is Rs 15 to Rs 20 per unit for the solar energy, which is very high when compared to, Rs 2 to Rs 5 per unit for other conventional sources in India. Much of the country does not have an electrical grid, so solar power will indeed be a boon for water pumping, to begin replacing India's four to five million diesel powered water pumps, each consuming about 3.5 kilowatt of off-grid lighting. Solar energy technology consists of solar thermal technologies, which utilize sun's energy and solar photovoltaic technology, which convert solar energy directly into electricity. According to the 11th five year plan, the government of India projects a massive expansion in installed solar capacity, and aims to reduce the price of electricity generated from solar energy, to match that from fossil fuels like coal and diesel by 2030. The Integrated Energy Policy of India envisages electricity generation installed capacity of 80, 0000 MW by 2030 and a substantial contribution would be from renewable energy. India has been ranked 7th worldwide for solar photovoltaic (PV) cell production and 9th rank in solar thermal power generation. This capacity is growing rapidly due to the entry of various private players in manufacturing of solar energy equipment. The Indian solar energy sector is estimated to grow at 25% year on year in next few years. At this rate, the global market is likely to exceed the annual production mark of 12 GW during the year 2012. Likewise, the Indian market demand is expected to reach 200MW by the year 2012. The implementation of the three-phase plan for solar PV capacity expansion is expected to begin
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this year in 2010, with the Indian Government spending approximately US$20 billion over a 30 year period. As renewable energy source, solar energy presents an exciting opportunity. While the current contribution of solar energy to the total global energy needs is insignificant, in the medium and long run, it is expected that solar energy will form a vital component of the world‟s energy mix. This has resulted in a number of countries, communities and companies investing significantly into solar energy. Within solar, both solar PV and solar thermal present exciting business opportunities. The capital costs for solar PV are expected to decrease significantly over the next five years, and emerging high efficiency solar thermal technologies offer hope for a significantly lower cost of energy from solar thermal in the next five years. The above developments thus present a wide range of attractive business opportunities along the entire solar energy value chain. Opportunities exist for businesses and entrepreneurs both small and large, and in domains that are emerging and niche. Entrepreneurs and investors have a need for a comprehensive resource that identifies the key drivers for opportunities in this industry, and provides insights on the extensive range of these opportunities.
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Urja Unlimited- Hawkers Lighting Program
Urja Unlimited understand how important a electricity component is irrespective of rural and urban lives and therefore we started a Hawkers Lighting Programme in 2010 to provide sustainable and hassle free electricity to 50 Hawkers in and around NCR Region. The main aim was to provide electricity to those who uses kerosene for lighting their households at night. By this programme we could help them 50 Hawkers in NCR Region to convert them into Solar Lantern and Home Lighting System by using unique micro solar finance concept.
Objectives of the Hawkers Lighting Program
To provide clean lighting solutions to hawkers Reduce health hazards which results from inhalation of obnoxious fumes as a result of using kerosene or Petromax lamps Provide livelihood opportunities to hawkers and increase their income Reduce environmental pollution
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Chapter 2- Organization Profile
Urja Unlimited, a social enterprise provides solar energy solutions and service to enhance livelihood opportunity and entrepreneurship in rural area especially for women. Urja Unlimited aims to replace kerosene with its most affordable and clean energy solution and fueling rural areas with energy which is of great importance to poor women. Our aim is at providing solutions in the area of energy for the industrial, rural and urban consumers with a view to bridge the gap between energy supply and demand in un-electrified areas. We understand the high correlation between access to energy and livelihood opportunity, better health and high quality of education in rural areas. Therefore, we designed our approach and business model to provide not only an effective product solution but also work for sustainable business model that works on post sales and aims to build synergies between entrepreneurs, NGOs/other partner and Urja Unlimited. We are based in Faridabad, Haryana in the area of setting up Rural Energy Centers (LEAP – Livelihood and Energy Assurance Partner Centers) that is committed to the use and promotion of renewable energy for creating a sustainable future.
Update - Urja Unlimited has launched its Urja Unnati Program for Livelihood & Energy Assurance in Rural Area especially for women - Partnering with the several NGOs/MFIs/ Cooperatives/ Producer Companies for reaching out to the remotest part of the country. - New ideas developed for PV-based small businesses. - Urja Unlimited is in process to partner with organizations to implement its innovation poverty reduction model through ‘Green Village’ and „Watt a Village’ - one of the largest rural energy programs in India.
Urja Unlimited currently is running a rural program - Urja Unnati for over 2 years now, wherein the key objectives are: Establishment of a micro enterprise – promoting entrepreneurship Promoting concepts around clean energy – establishment of a rural energy center
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Livelihood Promotion and Empowerment for people running the micro-enterpriseregular income generation
For the past 2 years, Urja Unlimited has been working in Haryana, Uttar Pradesh, Madhya Pradesh, Maharashtra, Rajasthan and Uttrakhand for promotion of solar based lighting solutions.
Hawkers Lighting Program
Urja Unlimited understand how important a electricity component is irrespective of rural and urban lives and therefore we started a Hawkers Lighting Programme in 2009 to provide sustainable and hassle free electricity to more than 200 Hawkers in and around NCR Region. The main aim was to provide electricity to those who uses kerosene for lighting their households at night. By this programme we could help them more than 200 Hawkers in NCR Region to convert them into Solar Lantern and Home Lighting System by using unique micro solar finance concept.
Community Solar Street Lighting Program
Urja Unlimited with the help of Uninor Corporate Social Responsibility started its Community Solar Street Lighting Programme. These lights don't only improve people's ability to work at night - they also give adults the chance to interact socially. These lights were installed in Konkera and Bachera village in Uttar Pradesh during 2009. These new environmentally friendly lights are run from a battery charged by a solar panel during the day. Access to light allows villagers to enjoy a much greater quality of life - and lets them undertake livelihood generating activities like handicrafts during what would otherwise be 'dead' time.
Livelihood and Entrepreneurship Assurance Program Centre
Urja Unlimited started this initiative in mid of 2009 to promote rural entrepreneurship who can retail solar product and solution within the reach. This helps Urja Unlimited to have its own distribution channel for retailing and service. So far 15 Urja Entrepreneurs has been developed who are providing Solar Energy solutions.
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Urja Unnati Program
Urja Unlimited understands how the livelihoods opportunity of rural India is poorly affected by the lack access to electricity. By 2010, Urja Unlimited has initiated Urja Unnati Programme with the aim of clean energy concept and livelihood for the rural people. Under UNDP-IKEA women entrepreneur project, Urja Unlimited has successfully installed the 5 Community based Solar Lantern Charging Station in the different villages of Rant Ravidas Nagar and Jaunpur district of Eastern Uttar Pradesh where Urja team have developed the 10 local rural women entrepreneurs to run and maintain the Solar Charging Station and create a sustainable livelihood for them. Now these 10 women entrepreneurs provide sustainable lighting to 100 households in their respective villages. Most recently, Urja Unlimited has successfully installed the Number of Community based Solar Lantern Charging Station in the different villages (Tribal belt) of Mandla district of Madhya Pradesh with collaboration with Corbett Foundation.
Training Programs on Solar Energy
The rural women/youth have the capacity and competence to fabricate, install, repair and maintain Solar lantern or devices without any help from outside but the solar electrification of the villages is not a sustainable unless the community are well prepare to accept it and well
train to run and maintain it. The point is not to improve technology or even installation this is the easiest part, the secret is repair and maintenance, and after installation make them service must be immediate within easy reach and inexpensive, the maintenance and repair must be carried out by the trained women. Most recently, Under MNRE/AIWC training program on “Application of Solar Energy Instrumentation for Income Generation, our trainers have trained the women form resettlement colonies in installation, maintenance and repair of domestic devices like solar lanterns, home Lighting system, down- light and solar box type & parabolic solar cookers with a view to set up solar centers in these areas so that these women will have sustainable income.
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Chapter 3- Methodology
Urja Unlimited is working on a strategy to launch two of its products, namely solar tube light and solar lantern in the Faridabad district having the street vendors and hawkers as its customer base. The project was done to assess the feasibility of three plans namely, the full payment scheme, the installment scheme and the bank linkage scheme and to position and launch the product in one of the above mentioned three plan segments which is the most appropriate. As part of the project, the methodology adopted included two procedures. Firstly, a structured questionnaire was designed with the objective of doing a market survey to understand the needs of the target consumers of the product. Secondly, promotion of the solar lantern and tube light was done through the distribution of flyers and posters among the hawkers and vendors of Faridabad district. The aim was to target as many number of hawkers and vendors in Faridabad district as possible.
Criteria for selecting the vendor
The criteria for selecting the vendors will be: The vendor is running business in the same area for at least a year The source of lighting for the vendor is candle or petromax or kerosene lamp The vendor runs his business in a not so busy area There are similar vendors in the vicinity The vendor must have a valid ID proof and contact number
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Limitations faced during Survey
Most of the vendors we visited are using either inverters or battery and CFL lighting solutions Pricing is a deterrent factor for the solar lanterns and tube lights Rs 1500 down payment for the tube light and Rs 1000 down payment for the lanterns are also deterrent factors The vendors who are using candles come under the very low income groups. They are asking for more flexibility in the down payment and installment plans Most of the vendors are using Chinese LED lamps which is proving to be a deterrent factor for them to be accepting the Urja Unlimited solar lighting solution Some of the vendors are questioning the reliability of the Urja Unlimited solar lighting solutions and therefore asking for extended warranty options.
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Chapter 4- Data Interpretation and Analysis
Our primary focus in the research is to do a market survey among the sampled hawkers and to record and analyze their responses which will test the feasibility of the launch of the solar tube light in one of the three above-mentioned schemes. Before conducting a detailed analysis of the raw data, two mentionable considerations are: 1) Although we have promoted the solar tubelight among 250 hawkers and vendors in Faridabad region through distribution of flyers and pamphlets, the survey was conducted only among vendors who did not use 220Volts A.C. lighting solutions. 2) The vendors who did not have fixed shops and operated on moving carts were also eliminated from the purview of the survey since they will not fit in the installment plan and since most did not have covered carts it was impossible to install the solar tube light on the carts.
Analysis of the Surveyed Data
The first question asked as a part of the survey was, for how long the vendor or hawker is running business. This question was done to assess the financial viability of the vendor. Any vendor who is running business for less than a year has been excluded from the purview of the survey. This is because any vendor who is running business for less than a year will not have enough financial viability to pay installments. Moreover vendors who are running business for less than a year may not be running business at the same location permanently and may change location which will result in total loss of installments for the organization. The number of years has been categorized into 1-5yrs. 5-10yrs, 10-15yrs and more than 15yrs.
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Number of Years for which Hawker is doing Business
6% 1-5 yrs 5-10 yrs
10-15 yrs >15 yrs
The above pie-chart depicts the number of years for which the hawker is doing business. As we see 77% of the hawkers are doing business for 1-5yrs followed by 15% hawkers who are doing business for 5-10years. This means that most of the vendors in the sample size are relatively new although they have financial viability to pay installments and there is less risk of moving business. An advantage of having relatively new vendors or hawkers is that if advertised vigorously it can push up sales of solar tube lights quickly since most new vendors will like to install bright LED solar tube lights as a means to make themselves visible distinctively and as a result attract more customers. The second analysis in the research is about the type of lighting solutions the hawkers are using. The types of lighting solutions are broadly divided into battery lighting system, candle/kerosene lamp/gas light/petromax, Chinese LED/emergency light and nothing.
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Lighting Solutions used by Hawkers
Battery Lighting System
25% Candle/Kerosene Lamp/ Gas Light/Petromax Chinese LED/Emergency Light Nothing
The above pie-chart depicts the type of lighting solutions the vendors/hawkers are using. 63% or the majority of vendors in the sample size are using battery lighting systems which consist of inverter, battery and CFL lamp. It is followed by users of candle/kerosene lamp/gas light/Petromax which account for 25% of the total sample size. 9% of the vendors are using Chinese LED/emergency light and the remaining 3% are using nothing. 88% of vendors using battery lighting solutions and candle/kerosene/gaslight or petromax provide a good prospective customer base since the solar tubelight is mainly aimed at two things- reduced expenditure on lighting which induces increased savings and at the same time eliminate the ill effects of obnoxious fumes on the vendors‟ health. The third analysis is on the monthly average income, expenditure and savings pattern of the hawkers and vendors. This analysis serves two purposes. Firstly, it helps assess the repayment capacity of the vendors and hawkers. Secondly, it also enables understand the amount and percentage of the income, expenditure and savings being spent on battery lighting system or candle/kerosene lamp/gaslight or petromax.
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Income, 7500 Expenditure, 5000
The above pie-chart depicts the monthly average income, expenditure and savings of the sample size of the vendors and hawkers. Out of the average monthly expenditure, Rs 300 is spent only on lighting purpose which is 6% of the expenditure. This percentage comes to about 8%-10% for users of candle, kerosene lamp, gas light or petromax. The vendors save Rs. 2500 per month on average or about 33% of the total income. If the expenditure on lighting can be eliminated, this savings will go up to 37%-40% of the total income and this in turn will be a unique selling proposition of the solar tube light. In the next section the detailed technical specifications of the tube light and specifications of the installment and bank linkage plans are discussed.
Technical specifications of Solar Tube Light
Solar Tube light 3 Watt
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8 Watt, 12 Volts
7.2H, 12 Volts having a backup time of 7-8 hours
The entire unit costs Rs. 3000
The table above gives details on the technical specifications of the tubelight. The battery if used properly as per instructions provided in the user guide will last for a period of 18-20months after which the backup time of the tubelight gets reduced and the battery needs to be replaced. The cost of a unit of 7.2H, 12 Volts battery is Rs.300. the package of the solar tube light will contain one unit of solar tubelight, one unit of battery, one charge controller and one solar panel along with the clamps for installation and user manual book. The entire unit except the battery has warranty for one year which does not cover accidental damage. The battery has warranty for six months. The rated life of the tubelight is 20,000 hrs. and that of the solar panel is 12-15 yrs. If handled properly as per instructions.
The most important analysis before any product launch is to assess the needs of the customer. A product launch can only be successful if it is molded according to the needs of the customer. From the survey of the sampled vendors and hawkers a list of customer needs has been drawn and depicted below.
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98% 85% 76% 63% 55% 46% 83%
The above bar graph depicts the percentage of sample hawkers and vendors who have responded to the different parameters for the solar tube light. 98% of the vendors have said that good quality is most important for the solar tubelight. 85% of vendors think that the cost of the solar tubelight should be reasonable. 83% of vendors think that value for money is most important for the solar tubelight. This is followed by long lasting, excellent technical and after sales service, minimum 2 yrs. Warranty and easy to install and operate with percentages of 76%, 63%, 46% and 55% respectively. The solar tube light of Urja Unlimited features all the customer needs except the two years warranty and the price which most of the customers think is exorbitant. The customers‟ opinion on pricing of the tubelight is depicted through the next pie-chart.
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Vendors' Opinion on Price of Tubelight
6% 16% 30% 1500-1800 1800-2000 2000-2500 48% >2500
The above graph depicts the customer perception on the pricing of the solar tube light. 48% of the vendors feel the price of the tubelight should be between Rs.1800-2000. 30% of the vendors feel the price should be between Rs.1500-1800 and only 6% think that it should be more than Rs.2500.
There are three types of repayment plans for the solar tube light. The first plan is full payment. The second plan is installment payment. There are two options in installment payment- the Plan 500 and the Plan 1000. The third option is the bank linkage system. The salient features of the second and the third plans are explained in detail in the table below. Plan 1000 Plan 500 Bank Linkage
In this plan the customer In this plan, the customer This plan is applicable for needs to pay Rs.1000 as down needs to pay the entire amount customers who have bank payment and the rest Rs2000 of Rs.3000 in 6 equal monthly account. The bank account of in equal installments of installments of Rs.500 each the customer will be linked with the bank account of Urja Unlimited and Rs. 250 will be transferred from the
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Rs.500 in 4 months.
account of the customer to the bank account of Urja
Unlimited each month for 12 months
The third plan which is the bank linkage option is the most feasible and cost effective option both for the organization as well as for the customers. The customers are benefitted since they will not have to pay hard cash from their business every month. The organization is benefitted because there is no collection cost in this plan as in Plan 500 or Plan 1000 where an individual needs to visit the hawkers every month for collection of installments for which he needs to be paid. Also, there is minimum risk of default of installment payment by the vendors. Most of the vendors have also agreed to the bank linkage option as the best repayment plan. This is supported by the pie-chart below.
Customers in Favor of Plans
Plan 1000 Plan 500 Bank Linkage Plan
The above pie chart shows that almost 60% of the vendors and hawkers are in favor of the bank linkage option. Most of the vendors are having bank accounts so bank linkage will not be an
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issue. The few vendors who do not have bank accounts can get their account opened with the help of Urja Unlimited.
Unique Selling Proposition of Solar Tube Light
The solar tube light has certain features which if properly marketed, can drastically push sales. These unique selling propositions of the solar tube lights are listed below. It has brighter light than battery lighting system or kerosene lamp or candle or petromax. This brighter light will distinguish the vendor‟s shop in the crowd and will help him attract more customers. The installment option provided by Urja Unlimited will be highly beneficial for the vendor. The vendor can use the solar tube light and pay in small installments. As soon as the installments end the ownership of the tube light is transferred to the vendor. In the bank linkage option, the vendor will have to pay a sum of money monthly, which is less than his current expenditure on lighting purposes per month. Urja Unlimited possesses a good technical team which will be able to handle after sales service smoothly and punctually. This will help in quick selling of the product because any downtime in the performance of the tube light will result in hamper of day to day business for the vendor. Being an Indian product the solar tubelight will be marketed as highly reliable unlike the cheap Chinese counterparts. The warranty of one year adds sense of confidence and reliability among the customers. The assembly unit of the product being locally situated will instill confidence among customers to buy the product. Use of the solar tube light will enable annual savings of Rs.2500-3000 from the second year onwards which would otherwise not have been possible as it is spent on lighting purposes every year. If the customer opts for the bank linkage option, he will have to pay Rs.250 per month as installment which means savings of at least Rs.500-Rs.600 will occur in the first year itself. Proper explanation of this proposition will enable brisk selling of the tubelight. The solar tube light has a backup time of at least 8-10 hours. This means the vendor can operate his shop for a longer period during the night time which will help in earning increased amount of money thereby increasing his marginal profit.
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The use of solar tubelight will reduce risk of fire in the shop due to spillage of kerosene lamp or petromax or candle. It will also reduce the health hazards which occur due to inhalation of toxic fumes from kerosene lamp or gas light. It will also reduce the emission of carbon dioxide in the atmosphere thereby promoting clean and green environment.
SWOT analysis is a strategic planning method used to evaluate the Strengths,
Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization.
Strengths: characteristics of the business, or project team that give it an advantage over others
Weaknesses (or Limitations): are characteristics that place the team at a disadvantage relative to others
Opportunities: external chances to improve performance (e.g. make greater profits) in the environment
Threats: external elements in the environment that could cause trouble for the business or project
Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. Urja Unlimited being a start-up venture has high potential of growth in the industry. Being a unique project proposition it has certain advantages in the industry which are also its key strengths. But its flagship product, the solar tube light is not without its share of weaknesses and threats. But these weaknesses and threats also provides opportunities for innovation which if rightly capitalized upon can turn into strengths and thereby consolidate its brand value and market share, making it a fierce and formidable competitor in the industry. A detailed SWOT analysis is thereby presented in the following table.
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Strengths • • • • • • • Technically sound team Good after sales service High quality product Good value for money Easy installment options No similar branded products in the market Heavy promotion and advertising can be done in the market
Weaknesses • • • • • Price of the product is a major deterrent No other charging option except solar Procurement and assembly of the products is a time consuming process High demonstration cost Presence of low human resources may affect productivity in case of high demand in the future
Opportunities • • • • Break the stranglehold of other lighting systems New concept in the market Building own brand High sales, high profitability and return on investment equal to other electronics • Huge sustainable market and growth
Threats • • • • Presence of low-cost Chinese LED in the market The vendor can discontinue
installments High cost of recovery of installments in case of Plan 1000 and Plan 500 The vendor can discontinue business and move to some other place with the lighting solution thereby become untraceable
Competitor analysis is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context to identify opportunities and threats. Profiling coalesces all of the relevant sources of competitor analysis
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into one framework in the support of efficient and effective strategy formulation, implementation, monitoring and adjustment. Competitor analysis is an essential component of corporate strategy. It is argued that most firms do not conduct this type of analysis systematically enough. Instead, many enterprises operate on what is called “informal impressions, conjectures, and intuition gained through the tidbits of information about competitors every manager continually receives.” As a result, traditional environmental scanning places many firms at risk of dangerous competitive blind spots due to a lack of robust competitor analysis. The solar tube light, being the flagship product of Urja Unlimited calls for a detailed competition situation analysis to assess its position and threat level situation in the market. The following points provide a comprehensive competition situation analysis profile of the solar tube light in the market of Faridabad region. There is no real branded competition in the market. The solar tube light to be launched by Urja Unlimited will be one of its kind product in the market. There are some generic brands from China but they are not reliable and there quality is also shoddy. The tube light has the advantage of being the first branded entry in the market. With vigorous advertising it can capture market easily and consolidate its brand positioning in the market. If it can capture a major market share, it has the advantage of posing entry barriers for other players in the market of Faridabad region. Faridabad being an industrial region and densely populated area has a large number of hawkers. This provides a huge sustainable market for the solar tube light manufactured by Urja Unlimited.
Porter’s Five Forces Analysis
Porter's five forces analysis is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one
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approaching "pure competition", in which available profits for all firms are driven to normal profit. Three of Porter's five forces refer to competition from external sources. The remainders are internal threats. Porter's five forces include - three forces from 'horizontal' competition: threat of substitute products, the threat of established rivals, and the threat of new entrants; and two forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of customers. The Porter Framework Analysis for the solar tube light manufactured by Urja Unlimited is depicted below.
There is threat from low cost Chinese LEDs
The bargaining power of suppliers is high due to the presence of similar lighting solutions organization in the industry
There is no real threat of competition at present due to absence of branded competitors
The bargaining power of consumers is high due to presence of cheaper substitutes in the market
There is no real threat from substitute products due to absence of similar high end lighting solutions in the market
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Given the current market situation, the organization is aiming at a constant projected growth rate of 25% in the number of units sold per month. So if we assume the sales in the 1 st month to be 100 units, the annual sales pattern in the number of units is depicted in the bar graph below.
Projected Sales per Month
400 350 300 250 200 150 100
Projected Sales per Month
Benefits of using Solar Tube Light for Hawkers
The hawkers at present are using battery lighting system or candle or kerosene lamp or gas light or petromax as their main source for lighting purposes. The benefits of using solar lighting system are immense and its sales can be boosted by proper explanation of these benefits to the hawkers and vendors. The primary benefits of using the solar lighting system can be explained in the following points. • Cost Savings: The normal cash outflow of INR 250-300 per month for the vendor gets eliminated. This money can now be ploughed into business and used for income generation activities • Safe home and workplace: the lanterns provided by Urja Unlimited use superior bright LED technology that ensures there are no hazard to health or safety
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Healthy environment: Urja Unlimited has started to work with the hawkers to explain to them the positive impacts of using solar lighting solutions. The aim is to enlist them as supporters in the climate change movement and build a path breaking movement that is bottoms up. Each solar lantern that gets lit up prevents fumes from a kerosene lamp to pollute environment
Incremental Incomes: Some of the vendors have expressed willingness to run business for longer hours. Others have expressed how they have been able to attract incremental clientele through the unique use of solar lanterns vis-à-vis the other hawkers operating in the vicinity
On the basis of the above analysis of data, the following recommendations are proposed. • Robust advertising and promotion of the product is needed to capture market and consolidate market share being the first product of its kind in the market. • Pricing needs to be re-worked since most consumers find price of the product to be exorbitant. • • Brand promotion activities need to be undertaken to increase brand value of the product. Hawkers need to be brought on a common platform and hawker groups need to be formed. These groups will then be linked with banks that will provide them with micro loans for purchase of the lighting solutions. In this way the cost of recovery of installments and the risk of installments can be curtailed. The formation of hawkers groups or hawkers SHGs will be formed in the following pattern.
Framework for Hawker SHGs
8-10 members of hawkers make one hawkers group which is then linked to bank for loans by the name of the group Such group of any particular area makes one hawker organization which can be used to generate further livelihood opportunities
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8 to 10 Hawkers
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A robust distribution network needs to be developed. The distribution strategy will be:
In the first stage a vendor to vendor distribution strategy needs to be followed in which each vendor will be given incentives if he can refer at least five other customers. In the second stage an entrepreneurial distribution model will be followed in which a vendor/distributor will be responsible for distribution network of a particular area .
The solar tube light manufactured by Urja Unlimited is a one of its kind product in the market. It consists of LEDs which is much brighter than conventional electrical lights and being charged by solar energy means it is eco friendly at the same time. It enables savings and provides livelihood opportunities. If properly marketed this product has huge sustainable market since the solar concept has already picked up pace in India and is the only answer to energy problems in the future.
Chapter 5- Bibliography
1. Strategic Plan for New and Renewable Energy Sector for the Period 2011-17 by Ministry of New and Renewable Energy, Government of India 2. Report on Analysis of Solar Energy Industry in India and its Future Prospects by NOVONOUS 3. Preview of Solar Energy Market Potential and Business Opportunities by altprofits.com 4. http://en.wikipedia.org/wiki/Porter_five_forces_analysis accessed on 20th of January, 2012 at 0100hrs. 5. http://en.wikipedia.org/wiki/SWOT_analysis accessed on 20th of January, 2012 at 0100hrs. 6. http://en.wikipedia.org/wiki/Competitor_analysis accessed on 20th of January, 2012 at 0100hrs.
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