Social Enterprise Under Adversity: Bridge EXP in Kibera (A)
Oana Branzei, Eduardo Zarate
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Sustainable Development; Entrepreneurial Business Growth; Entrepreneurial Marketing; Emerging Markets, Entrepreneurship, General Management/Strategy, International, Marketing, Administrative, Support, Waste Management and Remediation Services, Manufacturing
The case illustrates the opportunities, challenges and trade-offs involved in developing a pro-social business venture in emerging economies by outlining the interplay between a Nairobi-based venture by Insta Products (Insta) and a Toronto-based non-profit volunteering consultancy for sustainable new ventures with a high potential to accelerate local development. The case is set in the midst of social unrest in the spring of 2008, as the consulting team prepares to give their strategic recommendation based on detailed entrepreneurial, financial and marketing considerations. Focused on the commercial introduction of enriched flours to the retail market in Kenya, the opportunity presented in the case is expected to double the production of Insta in five years while building a stable Ksh 2.1 billion business. The new venture represents a pro-social corporate venture by a 15-year old company with strong capabilities in relief food aid. Insta had been engaged with CARE Kenya and Acumen Fund to solicit funding, and had commissioned independent market research. The Bridge Expedition Partners stepped in to critically review the business plan and offer financial modeling and market analysis to assess Insta Products in opportunity evaluation and the implementation of the new venture. The decision boils down to how Insta framed the venturing opportunity. If Insta focused on affordability, they would minimize pack size and focus on kiosk distribution (potentially supported through high frequency bicycle deliveries). If, however, the most important driver for low-income families when purchasing the porridge-like product uji was price sensitivity instead, Insta could be better off launching with larger packages, with better value per kilogram, distributed through dukas and supermarkets, where Insta's products and prices would be compared against established uji producers. The latter value proposition could still appeal to low income consumers and economize on distribution costs by pushing buyers to save for a weekly/monthly uji mix purchase rather than buy it as needed from local kiosks. The two strategies were radically different. The former tasked Insta with developing new distribution networks and likely investing in promotional activities that would have kiosks owners at the centre of its business model. The latter would expose Insta to fierce competition in the supermarket uji niche, and pit it against strong (and resource rich) competitors, putting the onus on Insta to differentiate its offering (on nutrition, price or likely a combination of product attributes and brand promise). There was no middle of the road - the two approaches required dramatically different models, and Insta was unlikely to have the managerial capability, let alone acquire the resources to finance both. The case ask students to make this decision, taking on either the roles of Insta's representatives and/or the Bridge consulting teams as the three recent Ivey MBAs engage in complex modeling and draw on the expertise of local and international students.