d.light design is a U.S.-based social enterprise dealing with solar lamps that has expanded its business reach in India. However, the market for such lamps in India is not so good and is disorganized. The company's head of operations based in India must focus on scaling up the company in order to achieve its goal of improving the company's productivity.
Niraj Dawar and Chandra Sekhar Ramasastry
Harvard Business Review (W14198-PDF-ENG)
June 05, 2014
Case questions answered:
- What channel alignment constraints face d.light design as it thinks about how to establish a channel structure in India? List any legal, environmental, and managerial constraints?
- For rural consumers in India, discuss how these channel alignment constraints and-side misalignments if the company sells through the:
a) Rural entrepreneur channel and link these misalignments to constraints
b) Village retailer channel and link these misalignments to constraints
c) Centralized shops channel and link these misalignments to constraints
d) Conclude from this analysis what d.light design’s channel structure should be? Which route(s) to market should be its highest priority?
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Case answers for d.light design
Summary – d.light Design:
d.light Design, founded in 2007, by Sam Goldman and Ned Tozun began with the objective of providing sustainable, low-cost, and market-driven solutions to consumers belonging to emerging economies. They intended to be a for-profit social enterprise whose determinants for success would be the revenue generated and the grievances alleviated of the impoverished people belonging to those nations.
Towards this end, the company set its attention on the major economies of India and China. After researching and identifying the underlying issues, they developed products to be sold from its two main lines:
S250: LED spotlight which could also be used to charge mobile devices and provided six hours of light.
S10: Solar Lamp that could provide light for eight to ten hours.
The major hitch though was the sales and distribution segment. d.light Design realized that there would be major challenges in developing a market base for their product in rural India. These challenges were as follows:
- Creation of demand: In a stark contrast to urban India, the literacy rate in rural areas was sub-par. As such, there was a huge challenge of generating awareness among the people regarding the benefits of solar lamps and its cost benefits.
- Building trust: Presence of a plethora of cheap rip off solar lamps which seldom worked meant that there was a lot of apprehension in the mind of consumers regarding the introduction of another solar lamp. A lot of time needed to be invested to build this trust.
- Making products affordable: Although d.light kept its products at a level at which the cost could be recovered in 3-4 months, a vast majority of the market was an agrarian economy, meaning that the income was erratic and the consumers were not able to invest their already scanty income in such a product.
- Product Distribution and Placement: The transport and distribution structure in India was underdeveloped in the majority of the rural areas which meant that distributing the products in a time and cost-effective manner was always going to be a huge challenge for the company.
Understanding the challenges, d.light Design had an uphill task of addressing them in a manner that would allow them to generate profit and at the same time reach through to their intended market, the deprived populace which would otherwise not be able to gain access to such solutions.
The company had a variety of options at hand, but each came with its own boons and banes. The available options d.light Design had at the time were…