Rakesh Srivastava (srivastava@mitconindia.com)

Pace of enterprise development is an indicator of the success or failure of any new technology and its promotional efforts. MITCON’s experience in promotion of MCR technology in a well developed market like Maharashtra, has established that in order to increase the pace of multiplication, the best way (though difficult in the beginning) is to create a network of market players who respond positively to the market needs, entrepreneurs expectations and complete the commercial chain of the enterprise, known as a business model.

Business model is a structured frame of role players within which each of them performs his role to complete the cycle of investment–production–marketing–delivery–receivables. Entire chain of this frame must be filled with competent role players to achieve the desired results. Here, competency means the players must visualize their growth with the new technology / product i.e., profitability for them on a sustainable basis. If the pioneer / pilot enterprise follows a successful business model prevailing in the sector, there is much greater probability of a better performance by the enterprise. Since other potential entrepreneurs keenly watch the performance of the pioneer / pilot enterprise, resultant effect is visible in terms of their coming forward to adopt the new technology, rather quickly. Therefore, it is very important for the technology promoters to identify and adopt the best business model for the initial few enterprises, to ensure their success and show case them as role models for enterprise multiplication. Business model varies for each industrial sector depending upon the nature of the product, market players, and consumption pattern and most importantly the buying behaviour of end–users. Hence, in absence of existing business models, the pioneer / pilot enterprise must identify an identical model in similar segments, engage market players with clearly defined roles, experiment with it and (based on the learnings) modify it to achieve set goals. Only successful business models in which the requirement of market and the entrepreneur is entirely met, gives rise to enterprise development. Business model varies from entrepreneur to entrepreneur, depending upon their strengths and network. Broadly, the following aspects need to be assessed for any business model:

Ø  Profile of the entrepreneur
Ø  Type of market
Ø  Location of unit
Ø  Available support service partners
Ø  Type of stakeholders

Based on the above five factors, MITCON has identified two models for its existing three MCR entrepreneurs (two at Pune and one at Dhule).

In this model, the entrepreneur follows the path of the existing network of building materials. The enterprise is promoted by a first generation entrepreneur. He does not have any support service provider of his own. Strategic inputs in terms of market and technology, including quality monitoring, is being provided by the network of experts, created by MITCON. The operating cycle works as follows:

The entrepreneur’s quality and productivity is monitored by MITCON and DA and its network of experts whereas the need based support in marketing is provided by the marketing expert. The entrepreneur himself procures most of the order (80%) and with the assistance of a roofing service provider (who has been engaged as a business associate and is paid on case to case basis), the understructure and tile installation is done. Only a part of the order (10% each) is being procured by the other players i.e. fabricators & roofing service providers plus contractors and architects. The market feedback is routed back to MITCON who refer the matter to the concrete / marketing expert. Based on the advice of these experts, corrective actions are taken. The entire network can be presented in the following chart.

Obviously, this does not reflect a very healthy picture. To make the model succeed, the percentage of a dealer's share must increase to more than 60%. This can happen only when the dealer is appointed and the support service providers and decision influencers play a more active role besides the entrepreneur himself. MITCON has identified a dealer and the agreement is to be signed shortly. The situation then is likely to improve, which we have observed in the case of Dhule entrepreneur. There, the entrepreneur has been operating through a smart fabricator cum roofing service provider. In the core area, the business is generated by the fabricator whereas for nearby districts, a progressive dealer has been engaged. The entrepreneur has been able to procure a good part of business through fabricators & roofing service providers (60%) whereas 30% of the total order value is procured by dealers/architects and contractors. Thus, the entrepreneur has to look for only ten percent of his production thereby giving him ample time to concentrate on production and quality of products/services.

In sharp contrast to the earlier entrepreneur, this entrepreneur has made the business model a great example of a success story.

Business model is predominantly prevailing in the roofing material business.

The second type of business model is an interesting case of the entrepreneur being a fabricator cum roofing service provider earlier. This provided him a unique opportunity to exploit his previous contacts with the builders, architects and contractors. To ensure maximum success, he also engaged dealers in high potential areas of Maharashtra and to make ready availability of the material, sufficiently good quantity of material was stocked at these locations. This entrepreneur sells 40% of entire production through his existing/earlier contacts, ten percent through architects and contractors and he has dealers who account for 50% of his production. He has already created a substantial visibility in Pune and surrounding areas in a very short period of time. The model can be presented as under:

Both the above models backed up by strong entrepreneurs, have shown great potential for success. This will spur the market with more entrepreneurs willing to adopt MCR technology. Hence, it will be worth the effort to monitor and support the above two models and assess their viability on a sustained basis so that the multiplication of these business models can be done at other locations as well, which (in process) shall result into speedy multiplication of MCR enterprises. q

The Author is chief consultant
Sustainable Building Materials, MITCON India