Marketing: ApproTEC - Case Study Example

Marketing Case Study Question-1 Of the 6 options given by Nick Moon when explaining his 3-year development plan (as shown on pages 13 and 14 of the case), which items would you focus on if you had unrestricted money of (a) $500,000 ONLY; (b) $1,500,000 ONLY. ApproTEC is a twenty years old organization engaged in the manufacturing of technological equipments. Martin Fisher and Nick Moon are the founders who devised the noble concept of this business that has led to the growth of the overall economy and society at large. They are trying to boost ApproTEC by investing in necessary areas. Henceforth Nick Moon has prepared three years development plan for ApproTEC with $5 million windfall. His three year development plan focuses on the crucial areas of development for ApproTEC. As per the question, there are two options that provide unrestricted supply of money amounting to $500,000 and $1,500,000 only. An analysis of the overall position of ApproTEC will provide the necessary information regarding the areas that need immediate attention. The overall infrastructure of the organization like office facilities, marketing programs and staff motivation needs to be enhanced. With the help of $500,000, I would have improved its infrastructure. The other option provides $1,500,000 for the development plan of ApproTEC. I would have spent this money on product development. Product development is a very crucial factor for ApproTEC and the success of its innovative product lies in its ‘unique selling point’. Question-2 What value has ApproTEC created? For whom? Is this accomplishing the company’s mission? ApproTEC stands for ‘Appropriate Technologies for Enterprise Creation’. It was established during 1991 by two entrepreneurs and stands as the greatest example of profit making organization that primarily focuses on social and human development. The value of the organization can be easily interpreted through its mission statement. The primary objective of ApproTEC is to remove the poverty from the societies of developing and under developing countries. Many other organizations aim to eradicate poverty but they fail to help the poor people to overcome their poverty. However, in case of ApproTEC, it has understood that the root cause of poverty is the lack of wealth. Therefore, this organization helps to strengthen the economic conditions of society by providing the small and micro scale entrepreneurs necessary technical equipments. ApproTEC is engaged in manufacturing low-cost tools, machineries and other equipments and it sells these products directly to the poor segments of population to start their new venture with a small amount of capital investment. Such a noble approach of ApproTEC enables the vulnerable entrepreneurs to generate sufficient revenues that ultimately help them to overcome their poverty. This also adds value to the economic conditions of a country. Nick and Fisher chose to set up ApproTEC in Kenya since the performance of small and micro scale industries were dismal in this country. The primary vision of Nick and Fisher is to improve the overall economic condition by making ways for generating income. They believe that the local government can form better policies, develop better investment conditions when there will be enough employment opportunities for the citizens. The above discussions have clearly explained ApproTEC’s mission statements. The mission statement of the organization is “to promote sustainable economic growth and employment creation by developing and promoting technologies which can be used by dynamic entrepreneurs to establish and run profitable and growing small scale enterprises” (Rangan, 2006). In order to support to its mission statement, ApproTEC has nurtured certain beliefs. The organization believes that for economies to sustain themselves, self-motivated and creative entrepreneurs are of paramount importance. These entrepreneurs are encouraged to start new ventures and manage the entire processes with the help of small capital investments. However ApproTEC is also aware of the fact that they require enough resources and technology to execute their creativity in the new ventures. The activities of the organisation are framed in alignment with its mission. Question-3 What is ApproTEC? Is it a manufacturing company? An R&D company? What business is the company in? Social change? Poverty alleviation? Enterprise creation? ApproTEC is an organization that aims to provide appropriate technologies for creating enterprises thereby improving the economic condition of the host country. It has successfully explored the underlying problems of poverty and its effects on the young entrepreneurs. It is the manufacturer of tools and machineries for small and micro scale industries in developing countries. It is engaged in manufacturing innovative products using the available technology. In order to fulfill these tasks, it focuses on certain strategies. Firstly, it tries to recognize the most profitable small and micro scale business opportunities having the minimum payback period of around three to six months. It aims to design and introduce new technologies that are mainly required by the new ventures. It also trains the new entrepreneurs in producing new technologies. It tries to make these technologies available to the poor entrepreneurs by applying advanced marketing techniques. It also attempts to monitor the overall impact of their work. A holistic development of the organizations along with the society and people is what it aims for. The business of ApproTEC aims to bring about development in society, alleviate poverty and to create enterprises. The organization has successfully served their primary objectives. It has enabled the young and creative entrepreneurs to generate income and to increase the employment opportunities. Its innovative products like block press, oil seed press, irrigation pumps etc have been profitable for new entrepreneurs and economical for the buyers. The organization has been successful in creating the necessary wealth for the society and economy. The creation of wealth has helped many people to overcome their poverty. The organizational has successfully motivated the local entrepreneurs and people to be self-sufficient by engaging themselves in wealth creation activities. The overall activities of ApproTEC have created circular development process for the society. It helps the new entrepreneurs to set their own venture, so that they can generate enough income. Continuous flow of their income alleviates their poverty and finally this brings about positive changes in society. Question-4 How is the irrigation pump different from oil press or block press? Which is the one that address the mission of the organization better? Why? Block press and oil press are the two initial products manufactured by ApproTEC in 1991 and 1992 respectively. The technology for block press was commercialized by the company as ‘Action Pack Bloc Press’. This machine develops pressurized blocks by using a mixture of soil and a very small amount of cement. The specialty of this block press is that it does not require the use of fire. It requires around 6 people to produce 600 bricks in a day. During 1991, 1500 pieces of block presses were sold and the cost of each press was around $350. Oilseed press was the second innovative product of ApproTEC. This instrument helps to extract oil from various types of seeds like sunflower, sesame etc. This also provides nutritious and pure cooking oil through a filtration process. Prior to the commercialization of this product, the Kenyans used imported oil that was distributed by the government agents at a subsidized price. However, due to some hostile economic condition, the price of cooking oil was raised drastically. With the set up cost of $400, the entrepreneurs could easily produce cooking oil at a significantly lower price. During 1998 and 2001, ApproTEC introduced two new innovative irrigation pumps and these two products were the most successful ones during that period in Kenya. The price of these two products was very low and hence, many poor Kenyan cultivators were able to afford it. Irrigation pumps differ from block press or oilseed press by the virtue of its very nature. Block press and oilseed press are the equipments that have helped the organization to meet primary objectives. These two products were developed keeping in mind the emerging entrepreneurs of Kenya. The entrepreneurs were benefitted as it generated income for them. For example, using the bricks made by the block press, many entrepreneurs were able to built retail shops, class rooms and commercial buildings. Besides, entrepreneurs produced such brick and sold them directly to the retail consumers. The oilseed press helped the entrepreneurs to produce low priced cooking oil and to sell it to the local market for local consumption. The irrigations pumps introduced for the Kenyan farmers helped them to irrigate the farming lands with a greater speed thereby increasing its fertility. There was a recordable raise in the income of the poor Kenyan farmer from their lands. The first two products of ApproTEC helped it to fulfill its mission in a better way. These two innovative products provided many employment opportunities leading to the overall development of economy. Question-5 What should ApproTEC’s strategic thrust be? What products? For what countries? The strategic thrust of ApproTEC should be such that it helps to inform its strategic intent which is very important for its future development plans. The primary objective and mission statement of the organization reflect its noble approach towards society. ApproTEC’s business principals are aimed to bring about a positive influence on the society. The strategic thrust for the organization must take into account its core areas of business and the overall objective. The core task of ApproTEC is to manufacture the innovative products that help the self-motivated entrepreneurs in generating income and employment opportunities. Therefore, it has to take a desirable strategic position in order to fulfill it pre-defined goals. Apart from the four 4Ps of marketing, there are certain factors that it needs to concentrate like innovation through research & development, design and social responsibilities. Innovative products are the prime essence of any organization; therefore it has to focus on the product development processes. The product development process also takes into account the price, design and technology. In this process, the organization must identify the areas of opportunities that can be used by the emerging entrepreneurs. However, in order to commercialize the new products, the organization must develop awareness programs with a view to enhance the knowledge of the consumers. For promotional activities, it has to consider the 4Ms i.e. market, message, media and measures. Since ApproTEC manufactures unique innovative products, the promotion should convey the message very clearly to its potential customers. The products of ApproTEC should match with its mission statement which is to provide a platform for the dynamic entrepreneurs to start and control small and micro scale enterprises. Irrigation pumps were produced for farmers and this product lines did not comply with its mission statement. However, those pumps were innovative and proved profitable for the Kenyan farmers. In future, ApproTEC should focus on entrepreneurial products which will also increase the employment opportunities. The organization should continue its operations in the underdeveloped and developing countries. Kenyan economy was greatly benefited by ApproTEC operations. However, in Eastern Africa there are a number of poor countries that require the same treatment. Countries like Malawi, Zambia, Burundi, Rwanda, Mozambique etc are potential markets. Question-6 How would you make a judgment about whether or not ApproTEC has been successful? In order to evaluate the performance of ApproTEC, three parameters have been used. The first parameter is the success of the products in meeting its primary objective. Second parameter is the impact of ApproTEC on society and economy. The last parameter is the financial performances of the organization. The success story is discussed below which has been framed after taking into account these three parameters. In this case study, four products of ApproTEC have been mentioned. The first two products were based on the needs of entrepreneurs and last two products were irrigation pumps for the Kenyan farmers. All the products had been a huge success in Kenya, thereby meeting the primary objectives of the organization. These products increased the incomes of entrepreneurs and farmers. The poor people of Kenya were also able to afford the product. The people of Kenya become depended, as the innovative products offered by ApproTEC helped them to overcome their poverty. According to the available data, these products were sold in good numbers thereby meeting the primary mission of ApproTEC. Within the first year of launching, 1500 pieces of block presses and 1000 pieces of oil presses were sold in the market. The Kenyan people found these products to be of great use. ApproTEC has positively impacted the social aspects of Eastern African countries. In the ten years of its operation, around 28000 machines manufactured and designed by ApproTEC were sold in the markets of East Africa. The small enterprises were able to provide nearly 25000 new jobs. Nearly 22000 new small scale businesses were developed and women played a vital role in running these enterprises. ApproTEC was able to improve the condition of over 140,000 Kenyan people since its foundation. As the condition of the Kenyan people improved, the overall social and economic condition of Kenya also enhanced. The financial statements of ApproTEC reveal that company has retained its steady growth. During 2000-01, it was able to make a profit of $32,604. However, as compared to the previous year, the profit has been reduced drastically from 96,205 to 32,604. ApproTEC cannot be defined as profit making organization as it aims to provide products to poor people of Kenya at a subsidized price. Therefore, its primary motive is not profitability. The following table depicts the growth history of ApproTEC in terms of its income and expenditure. Table 1: ApproTEC’s Growth History (Source: Rangan, 2006) The above table presents the growth history of ApproTEC. Initially, the organization enjoyed a higher growth rate but after 1996, the expenditure surpassed the income. ApproTEC aims for the welfare of the people and economy and its major source of funding comes from donations. Therefore, the organization must seek for more donations so that it can continue with its development activities. Question-7 Are Moon and Fisher technology entrepreneurs? Social entrepreneurs? What’s the difference? Does it matter? Both Moon and Fisher are the role models for the emerging entrepreneurs and social activities. They had the acumen to realize that poverty was the root cause of all evils. In order to improve the situations, they started the ventures called ApproTEC. They have successfully combined technology and business for changing the economy of the society. They realized that technology is the most important factor for modern business. The growth of business ultimate leads to the improvement in the overall condition of people and economy. Moon and Fisher cannot be defined exclusively as technological or social entrepreneur. The technology entrepreneurs solely focus on the technological aspect of business whereas the social entrepreneurs are mainly concerned with social aspect in business. The latter solves the problem with the help of innovative thoughts. The technology entrepreneurs resolve the problem by using innovative technologies. Technology entrepreneurs aim to commercialize their innovative solutions in order to make profit. Entrepreneurs of this order are very essential for the emerging societies as their efforts improve the conditions of mankind and society as a whole. However, every entrepreneur must also consider his social responsibilities. They should concentrate on developing innovative ideas that promises prosperity to the society. Reference Rangan, V.K. 2006. ApproTec Kenya. Harol. Read More