This course focuses on understanding subsistence marketplaces and designing business solutions for the billions of people living in poverty in the global marketplace. To develop understanding of subsistence marketplaces, we use exercises to enable participants to view the world from the eyes of subsistence consumers and entrepreneurs, facilitate bottom‐up understanding generated by participants, and provide insights from extensive research. More broadly, the course uses the context of extreme resource constrained contexts to learn about the bottom-up approach pioneered through the Subsistence Marketplaces Initiative, and apply it in any context. The course will involve virtual immersion in subsistence contexts, emersion of unique insights, bottom-up design, innovation and enterprise. A parallel project will focus on understanding a specific need in a subsistence marketplace, and designing a solution and an enterprise plan. Upon successful completion of this course you will be able to: • Develop an understanding of subsistence marketplaces • Design solutions for subsistence marketplaces • Develop enterprise plans to implement solutions for subsistence marketplaces • Apply the bottom-up approach for subsistence marketplaces as well as other contexts This course is part of the iMBA offered by the University of Illinois, a flexible, fully-accredited online MBA at an incredibly competitive price. For more information, please see the Resource page in this course and onlinemba.illinois.edu.
Lesson 1-4.1 Identifying and Understanding Need, Drivers, and Context Elements
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Del curso dictado por University of Illinois at Urbana-Champaign
Sustainable Innovation for Subsistence Marketplaces
54 calificaciones
University of Illinois at Urbana-Champaign
54 calificaciones
Curso 1 de 7 en SpecializationGlobal Challenges in Business
De la lección
Module 1: Introduction to Subsistence Marketplaces and Bottom-Up Immersion
In this module, you will be introduced to the importance of studying subsistence marketplaces as well as the unique nature of a bottom-up approach to studying it.
Conoce a los instructores
Madhu ViswanathanDiane and Steven N. Miller Professor in Business
Department of Business Administration
[MUSIC]
This lesson is very important in trying to frame the project and
in trying to gain some understanding of subsistence marketplaces.
I will work through one example where you understand the need and the drivers and
the context elements.
Why do we need to focus on the need and the drivers and the context?
Well it goes back to what we discussed earlier.
It's not enough to just understand a product or the need.
It's hard enough to just understand the consumer.
These are very unfamiliar contexts and these are unfamiliar contexts where life
circumstances are blended with day to day use of products in day to day life.
The social milieu is blended with the marketplace,
with the relationships that people have and with the household needs and so on.
If you are designing a solution for me in an advanced market place,
and let's say you want to design a stove for
me, you know what my kitchen looks like, you know what infrastructure I have,
you know that I can count on electricity and so on.
There are a number of things you can assume about the way I live and
about the way I consume.
As a result, you can just focus on that need, and
try to figure out how to make that gas stove so that it's most effective for me.
But here, you're talking about an unfamiliar context where people are going
to be using your product to serve a need in ways that you cannot anticipate and
they cannot anticipate.
So for example, there's going to be a stove, it's going to be on the floor of
a hut people running around it, with children running around it.
So how do you try to design for that context?
Moreover, it's not enough if you just understand the household and
that particular need and the product that's going to solve that need,
you have to understand how that household interacts with the neighborhood and
how that community interacts with each other?
How do they cook in that community?
What are the cultural values there?
What are the different types of food that are cooked and so on.
So it's not enough to understand the consumer alone.
You have to understand the consumer, you have to understand the community,
you have to understand the larger context.
So it's because of this unfamiliarity, and because the day to day living is
happening in a lot of uncertainty, and it's happening at the household level,
at the community level, and all playing out on a larger context, you have to draw
a picture out for yourself, as to how that need occurs, and what drives that need,
and what's the larger context in which all of these drivers happen?
That's why it's very important to take the time to understand the need,
the drivers of that need, and the larger context in which it's happening.
What we're going to do in the entire project is on the left side,
we're going to look at the need that you're going to focus on.
We're going to understand what drives that need in subsistence context.
What are the causes of that need?
And finally, we're going to understand the larger context elements
which actually cause the drivers, and cause the need in one sense.
So one way to think about it is why is the need happening, those are the drivers, and
then why are those drivers there, that's the larger context.
On the right side of the slide, you see that you're going to be designing the core
and augmented solution, the NMO circle.
You also have to think about the ecosystem that you put around the core and augmented
solution and then, you're going to be thinking about the business plan as well.
Now why is this important?
Because in subsistence context, people are deprived on multiple fronts.
So it's not just enough to focus on the product alone,
you have to think about how to augment the product, maybe with education.
And you have to think about the ecosystem, maybe it's educational classes,
maybe it's a network of farmers and so on.
You can't just think about the product and
assume that everything else will fall into place.
So in terms of the need, the drivers, and the context, as I mentioned earlier,
the drivers are the causes of the need, and
the context is a larger backdrop where the drivers and the need occur.
So let's take an example.
Here is an example of the need for
protection from parasite carrying mosquitoes.
This is a need that's focused on in this particular example.
This is a huge cost, it's a huge human cost, and
an economic cost because of malaria in the African continent.
What are the drivers of this need?
In other words, what causes this need to be so stark?
Well, it's the inability to take preventive measures.
It's how affordable the treatment is.
It's lack of access to health care and it's a poor public health infrastructure.
So all of these are drivers.
Now you may think, well, what exactly is a driver.
Anything that causes the need is a driver.
And what we are saying is as long as it's closely related to the need,
you can call it a driver.
On the other hand, if it's a little more distant from the need,
we want to call it a context element.
So what is the larger context?
What are the elements of the context?
Well, the climatic conditions in Africa, this is more at a macro level.
The lack of resources in a number of countries as well.
The lack of access to hospitals is another issue.
The lack of infrastructure in terms of water, electricity, sanitation and so on.
So these are all aspects of the larger context elements.
So I hope you understand what we mean by a need, it's drivers and it's context.
Now it's important just to keep in mind that you can decide what a driver is and
what a context is as long as the context is a larger backdrop and
the driver is more immediate to the need.
So you don't have to really wrestle with whether something is a driver or
a context as long as you decide where it falls and
as long as you decide that something belongs in a larger backdrop and
something is a more immediate cause of a particular need.
In order to understand the need, the drivers, and
the context, we've developed up an exercise for you.
What we'd like you to do is use that exercise to identify
the need that you'll be focusing on in your project.
So what we'd like you to do is go through the virtual immersion, list needs that
you find interesting on a sheet of paper, and then consider the needs and
identify the top three needs you would like to focus on for your project topic.
For the chosen need, you need to describe it in terms of geography, demographics,
and usage situations.
You need to list the drivers of the need, in other words, the immediate causes.
You need to list the larger context elements and
you need to draw all of this out in concentric circles with labels.
The very act of drawing out what you have in your mind in the form of a big picture
is very important for you to see what your thinking is really about.
So, what is this project?
Well, it involves identifying the problem, identifying the opportunity, designing
a solution, designing an enterprise plan, meaning it could be a business,
it could be a social enterprise and considering the sustainable outcomes.
So let me go through each step of the project.
In terms of the topic for the project,
it's important to choose something that could be of social or commercial focus.
It does not matter if what you have in mind is an NGO,
is a social enterprise with some kind of revenue, or is a business.
It's important to avoid large infrastructure projects like hospitals,
but think of small products that could be bought by an end user.
It's important to have some kind of revenue so
that you can be economically sustainable.
That is a good exercise to try to trade off to different types of sustainability,
and to force you to come up with some way to make your solution
economically sustainable.
It could be a good or a service for any geographic location and it's logical for
you to pick your own local community in order to design the solution.
The solution has to be realistic, so
make reasonable assumptions of a workable solution and enterprise plan.
The solution consists of the core solution,
the augmented solution, the ecosystem and a comparison with alternatives.
It's not enough to just design the solution, it's important to show that it's
better than what we currently have in terms of alternatives.
We talked about the need, the drivers and the context elements.
All of that comprises the problem, now let's go to the opportunity.
The opportunity can be described in terms of the geography, the beneficiary,
our customer, and the usage situation.
For the example that we are using to illustrate the project,
the geography is the entire continent of Africa.
The beneficiaries are the poorest in Africa who face the highest risk of
Malaria and the usage situation could be during sleep at night or for infants and
children through the day and the night.
In terms of the core solution, what we have is durable, low cost, organic,
insecticide treated antimalarial bed nets.
They're effective in reducing deaths in children, they're durable,
they're eco-friendly, made of recyclable, organic materials, and
they are safe in eliminating health hazards.
They offer effective and
long term protection against parasite carrying mosquitoes.
In terms of the augmented solution,
the packaging will emphasize education about malaria.
In terms of the ecosystem, there'll be educational programs in schools and for
women's groups.
Our solution can be compared to DDT which is less effective as mosquitoes develop
resistance, and also has an adverse impact on humans in the environment.
Similarly, low cost drugs are less effective,
as mosquitoes develop resistance.
Modern drugs are effective in the short run, but they're not affordable, and
they're not accessible at the village level.
Ordinary bed nets are ineffective since they are not treated with insecticides,
and they're not durable either.
So it's important to show that our solution is better than current solutions
in a number of different ways.
Now we look at the enterprise plan and the enterprise plan consists of three parts.
A sustainable value proposition, communicating the value proposition, and
delivering the value proposition.
So what is the value proposition?
By value proposition, we mean, what is the beneficiary giving up and
what are they getting in return?
The value proposition here is an affordable mosquito net that's treated
at a price of $3.50.
It's cheaper than most comparable products on the market.
It's durable and lasting four years without having to be retreated.
It's effective in reducing deaths in children by 20% and it's accessible
in that it's available at the village level through various channels.
It is also safe and not having adverse effects on humans or the environment.
How do we communicate the value proposition?
This is going to be done through community radio and
street plays to develop awareness and to train users of the product.
How are we going to deliver the value proposition?
This is going to be done through community health workers, local entrepreneurs, and
weekly village markets.
We will set up distributed community level production centers, and
build relationships with local suppliers of raw materials.
In addition, we'll set up community level production centers in 30 villages.
We'll establish relationships with existing transportation partners in these
locations, build partnerships with grass root NGOs and government agencies and
hire and train local personnel to manage the expansion process.
The final part of the project are the sustainable outcomes
in terms of the social, the environmental and the economic.
In terms of social impact, there are reduced rates of disease through better
quality of life, higher household income, economic development for the region and
employment creation in the economically backward regions of Nigeria, Congo and
Zimbabwe.
In terms of environmental impact, the product is made of recyclable materials,
insecticide is made out of organic extracts, there are no adverse effects on
humans or the environment, and the product as a result, is ecologically sustainable.
Finally in terms of economic impact,
we are going to make a good return on investment, and gain market-share and
what we learn here could be used other contexts as well.
So to summarize, your project is going to be about understanding subsistence
marketplaces through identifying the need to focus on,
identifying the drivers of the need and the larger context elements and in turn,
you're going to design a solution that involves a core and an augmented aspect.
You're going to design an ecosystem and
you're going to put together a business plan.
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