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SELCO India: A Case on Empowering Rural Livelihoods through Value Creation*

CASE STUDY, STRATEGIC MANAGEMENT
ET Cases - GSMC, 13 Pages

Case Preview

SELCO India: A Case on Empowering Rural Livelihoods through Value Creation

 

SELCO India, headquartered at Bangalore, was established by Dr. Harish, a solar thermal expert in 1995 with the intention of serving the poor of un-electrified remote  regions of Karnataka. It was started to enforce the proposed framework of decentralized energy distribution systems to serve the impoverished people of rural India. It focused on the energy needs of these customers and envisioned serving them with customized products and services (Exhibit I)...............

Till date, it has already served more than 1, 25,000 customers across Karnataka, Gujarat, Kerala, and recently Tamil Nadu. However, its geographical expansion in Andhra Pradesh & Maharashtra created problems among the aspirational shareholders of the company. As a result, the company had to reconsider its expansion plan and decided to replicate its business model by scaling up its technology rather than expanding geographically.

With this intended aim, Harish was desperately looking forward to meet the worlds’ prospective CEOs in the World Economic Forum at Davos. 30 world’s best CEOs came to forum to propose their future business models on the development of the remote regions of the developing countries. Harish was also one of them who wanted to present his viewpoint on ‘rural electrification’ through the viability of different renewable energy sources, but unfortunately found that none was capable enough to offer any real solutions for the alleviations of energy poverty..................

Teaching Note Preview

SELCO India: A Case on Empowering Rural Livelihoods through Value Creation

 

Synopsis

This case is about an eighteen-year-old Bangalore based social enterprise – “SELCO India”, which caters to the energy need of the economically impoverished sections of society. It was established by Mr. Harish Hande with the financial help of Solar Electric Light Fund (SELF), a U.S. based nonprofit organization. It is a for-profit organization, which has created, over time, a unique business model with customized products, doorstep financing, and a strong service network, which is uncommon to a market primarily consisting the poor. To date, it has provided solar lighting to 1, 25,000 homes in the remote regions of Karnataka, Gujarat, Kerala, and recently Tamil Nadu. It sells tailor-made solar products and services at an affordable price to cater to the needs of the consumers at the bottom of the pyramid (BoP). In addition to explaining the nuances of BoP market, this case describes how the rural people benefitted enormously by participating in income  generating activities through SELCO. The case also highlights Hande’s innovative ideas, unconventional thoughts, visionary power, and well integrated approach to build an ecosystem in the BOP market which makes it sustainable and also helps them in leading their life independently and gracefully. Research based on secondary data has been carried out to investigate the sustainability and viability of SELCO’s business model in the context of BoP. The case can be taught to  management students to explain the nuances of BoP market, and to demonstrate how a successful BOP strategy can be formulated and implemented. The key learning aspects of this case is to understand the importance of building ecosystem for the BOP and the complexities associated with it.

Pedagogical Objectives

  • • To educate the importance of decentralized energy distribution systems for resolving the energy crisis of un-electrified remote regions and also the other sub urban areas of rural India
  • • To sustain in energy generated businesses, the organizations have to develop some major facts and draws the future possibility of electricity driven growth for building the roadmap of sustainable energy solutions
  • • To explore the nuances of many bottoms of the pyramid (BoP) innovations and entrepreneurships by interpreting new dimensions for value creation
  • • To throw light on the prospects of efficiency and efficacy of the business model of any organization

 

Assignment Questions

  • I. What prompt SELCO to take a back-step from its geographical expansion plan?
  • II. How SELCO, with their innovative tailor-made products and associated services, enriches the life of BoP participants?
  • III. How it started concentrating to create the eco-system by allowing BoP participants to act as an entrepreneurs rather than only consumers?
  • IV. .............................................


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Abstract

This case is about an eighteen-year-old Bangalore based social enterprise – “SELCO India”, which caters to the energy need of the economically impoverished sections of society. It was established by Mr. Harish Hande with the financial help of Solar Electric Light Fund (SELF), a U.S. based non-profit organization. It is a for-profit  organization which has created over time, a unique business model with customized products, doorstep financing, and a strong service network, which is uncommon to a market primarily consisting of the poor. Till date it has provided solar lighting to 1, 25,000 homes in the remote regions of Karnataka, Gujarat, Kerala, and recently Tamil Nadu. It sells tailor-made solar products and services at an affordable price to cater to the needs of the consumers at the bottom of the pyramid (BoP). In addition to explaining the nuances of BoP market, this case describes how the rural people benefitted enormously by participating in income generating activities through SELCO. The case also highlights Hande’s innovative ideas, unconventional thinking, visionary power, and well integrated approach to build an ecosystem in the BoP market which makes it sustainable and also helps them in leading their life independently and gracefully. Research based on secondary data has been carried out to investigate the sustainability and viability of SELCO’s business model in the context of BoP.



Pedagogical Objectives

  • To understand the importance of decentralized energy distribution systems for resolving the energy crisis of un-electrified remote regions and also the other sub urban areas of rural India
  • To analyze the business strategies that organizations have to develop to sustain in the energy generation businesses and the elements that need to be factored to draw the future possibility of electricity driven growth for building the roadmap of sustainable energy solutions
  • To explore the nuances of bottoms of the pyramid (BoP) innovations and entrepreneurships by interpreting new dimensions for value creation
  • To analyze the prospects of efficiency and efficacy of the business model of any organization

Case Positioning and Setting
The case can be taught to MBA and Executive MBA for the following courses:
To explain the nuances of BoP market - To demonstrate how a successful BOP strategy can be formulated and implemented To understand the importance of building ecosystem for the BOP and the complexities associated with it.


* GSMC 2014, IIM Raipur


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- Teaching Note (**ONLY for Academicians)
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