new international market entry strategy for solar products
DESCRIPTION
For HiNation AB by WE School MumbaiTRANSCRIPT
PROJECT HINATION
T H E I N D I A SW E D E N I N N O VAT I O N S ’ AC C E L E R ATO R P R O GR A M FO R
“ BUSI NESS ST R ATEGY D EVELOPMENT ”
3 0 TH AU G U ST, 2 0 1 4 – W ES C H O O L M U M BA I
TEAM HINATION WESCHOOL - 30TH AUGUST, 2014 1
About HiNation
HiNation®, founded in 2008 with the aim of providing clean, accessible energy to outdoor enthusiasts & people in developing countries.
HiLight is a solar portable device that works on, a click of the button to charge - mobile devices, - cameras, - iPads and - GPS. Offering a bright LED light.
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New International Market Entry Strategy
Set-up manufacturing & distribution base for HiNation entry into India.
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Industry Insights
• Both International & Domestic(need of the hour)
Component Sourcing
• In-house
• Outsourcing
• Assembly(CKD & SKD)
Manufacturing Options • Go-to-Market
Business Model
Finished Products
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Industry Distribution Practices
Manufacturer
• Go-to-Market Business Model
Intermediary
• Corporates
• NGO’s
• Individual Customers
End user
• Consumers
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Financial Model
Particulars Amount (INR) Category
Estimated Price/Unit 2000 Solar portable device
Revenue* 20,000,000 All inclusive.
COGS 16,000,000 Includes taxes and all freight charges, insurance etc.
Other Expenses 1,000,000 Plant maintenance and salesexpenses
Gross Profit 3,000,000 To Manufacturer.
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*Estimated sales 10000 units pa
TEAM HINATION WESCHOOL - 30TH AUGUST, 2014
Unit CostParticulars Percentage Cost/unit (INR)
Components and parts 35 700
Assembling and setup cost 20 400
Shipping/Logistics 10 200
Packaging/Repackaging 10 200
Other Expenses 10 200
Margin 15 300
Total price 100 2000
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Market Insights
Estimated sales- 10000 pieces pa.
Category distribution through CSR activity.
Target audience price sensitive - Rural market.
Predominantly a B2B market
Urban market- at a very nascent stage.
Very low individual direct buying by end user.
Maintenance-key requirement of end user.
2 % growth in annually.
Maintenance over replacement
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Market Insights (cont’d)
Corporates allocate approx. 8 -10% of CSR funds for rural lighting.
Blue-chip companies use backward integration effectively to optimize their CSR activity.
PSU’s & other corporates outsource from manufacturers.
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Regulatory Insights
Companies Act 2013 mandates profitable businesses to allocate 2% of their profits towards CSR.
Estimated release of approx. INR 22K cr for CSR activities
Government offers 40% subsidy to manufacturers subject to fulfilling norms.
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Consumer Insights• Category driven by Regional players
• Target market expectation - “Free of cost”
• After Sales Service - nearly non-existent.
• Largely driven by end users - “self-fixing”
• Quality Standards of end product varies.
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Competitor InsightsPoint of reference Green Light Planet Om Energy Metal-works Tantra
Sales 8000 units 500 units 300 units 300 units
Price (INR) 650-2300 2000 1000 2200
Markets Present Orissa, Jharkhand, UP & Bihar
Maharashtra & Gujarat
Karnataka Maharashtra
Production SKD from China,assembled in India.
Yes Yes Yes
Dealer Network Own Own Supplier’s Supplier’s & Own.
Exports No Africa Africa SAARC & Africa.
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HiNation to identify manufacturers.
Tie up to leverage on CSR mandate.
e-commerce site - Urban India Penetration.
Business Model:High Volume, Low Margin – B2B markets.Low Volume, High Margin – Urban markets.
Impact:Prospect of Scalability in future.
Options….
INDIA - DOMESTIC MARKET INDIA - EXPORT HUB
HiNation to Set-up a base in India.
Identify manufacturers in SEZ with accessibility to ports.
Export to Africa, SAARC & ASEAN countries.
Business Model:High volume, Low margin.
Impact:Prospect of becoming a Global Player.
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THANK YOU
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Team HiNation- WeSchool
Ashish K Nainan
Gaurav Verma
Mayank Jain
Swapneel Raut
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