Review of a Blue Ocean Strategy Research Paper

In  the following blog the  author attempts to review a "BOS"  based research article . the link is given below
http://www.csi-sigegov.org/3/13_379_3.pdf


ICTs for the Effective usage of Blue Ocean Strategy for Societal Development: An analysis with reference to the parameters of capability


Vinay Sharma , Piyush Seth and Shujauddin Niyazi

This research is about conceptualizing the idea that ICT( information and communication ) can be used in serving the “Bottom of the Pyramid “ population by providing value innovation.( Value innovation here refers to cost efficient as well as innovative products that cannot only fulfill the requirements of the rural population but are also in the limits of their affordability). The research paper further concludes that serving Rural BOP as blue ocean customers will help in bringing prosperity as well as in their overall growth & development. This in turn will ensure economical and social harmony. One very important aspect of this research is that it does not only believe in reducing poverty on absolute terms such as better per capita income, better health and education facilities but also on the development of skill sets and capabilities of individual that can lead them towards the path of sustainable growth.

Target Segment:- Rural Bottom of the Pyramid customers.

Sample size:- 300

Type:- Practical applications.

Research Methodology: - Focus Group discussions (FGDs)

With the help of local influential people villagers were assembled at village head’s house. Initially a very formal chat was conducted so that their understanding of issues likes health, literacy; general well being can be understood. After that the discussion took a serious turn and based on their two groups were made one which were distinct in their perspectives.

Key Parameters of Capability Discussed

• Social


• Political


• Health


• Education

• Economic

Some of the common findings that came in the due course of discussion were :-

1>  64% of the total respondents believe strongly that the distance between the villages and the nearest post office effects the frequent communication of villagers with others and rest of the 36% of total respondents believe in the same fact but with some less confidence

2>  67% of the total respondents strongly believe that listening radio, watching television and reading newspapers are beneficial for the respondents and they get the required information by these mediums for their concerned livelihood and rest of the 33% also believe in the same fact but with some less confidence.

3>  74% of the total respondents are strongly with the fact that health is the most important factor for leading whole of their life, 21% of the total respondents agree with the same fact with some lesser.

4>  98% of the total respondents consider water resources as one of the reasons for good health and rest of 2% deny that

5>  45% of the total people say that they believe in skill related education, 16% of the total people say that they believe in literacy related education, 12% say that they believe in qualification related education and 26% of the total people say that they believe in job oriented education.

(Similarly other related concerns were evaluated)

Conclusion:- After the given research it was clear that rural populace at the bottom of pyramid have their own latent needs and they clearly understand that entities like health, communication, and better governance can influence their well being and development of capabilities.

This rural populace constitutes a large blue ocean of customers. To tap it what is needed is that companies must come up with innovative solutions that can suffice their requirements in an economical fashion and can provide them capability building facilities. The paper also gives due credit to ongoing strategic moves such as e-Choupal , Yeshaswini, SKS Microfinance, Mann Deshi Udyogini. To make such initiatives easily affordable and accessible what is needed is utilization of ICTS (information & communication technologies)

Scope of further Improvement:-

The research paper gives a strong foundation regarding the scope of “BOS” for catering to the rural populace but it does not give any innovative measure itself. Had the research been extended a bit further to design one two strategies then that would have been a strong value addition.

Few misconceptions regarding the BOP customers?

Often companies who want to cater to the BOP customers suffer from some kinds of misconceptions. These misconceptions are not only untrue but they also demotivate big enterprises to see the huge potential available in the BOP segment .Some of them are :-

(1)Bop customers don't have buying potential:- this is the biggest misconception that private enterprises have.BOP customers  have huge potential, albeit they do not have buying power like their well off counter parts.  These people who constitute 4-5 billion of the world population with there own latent needs and demand should not be ignored at any cost .These people might look poor at the surface but they do have capacity to spend and they are doing it .It's estimated that 85% of the population living in Dharavi(mumai's slum) have tvs, more than half of them have mobile phones and so on .
One another important fact thta is often ignored is that these people often pay much more than there well off counter part to make purchases . In economy there is a special term for this known as POVERTY PREMIUM ,often this premium amount is paid on account of poor distributions, lot of intermediaries, lack of accessibility ,vested interest etc.For exp:- a comparatively well off person can go to a bank and can get loan at a decent rate of 10-12% ,but if a poor person has to do the same then due to lack of accessibility he will be forced to go to a local money lender who might charge interest as high as 600-1000%.Similarly due to water mafias generally poor people are forced to pay a much higher price for water than there fortunate counter parts living in middle class areas . Thus this poverty premium provides a real time challenge as well as opportunity for the firms to cater to the BOP customers .

(2)BOP customers don't have collective strength :-This again is a very short sighted vision which firms have for BOP customers . As said earlier most of the BOP customers have access to tv, radio ,mobile phones etc as a result they are also well connected with each other, they have their own minimum requirements and expectations which they expect from various external agencies such as the govt.,NGOS and private players .

(3)BOP customers cannot be catered because of poor distribution facility :-

The genesis of this view lies in the misconception that BOP consumers reside only in rural area and since in most of the developing nation rural infrastructure is not well developed it is often tough to reach to them .Now its true that rural infrastructure is not well developed but a very large chunk(around 35-40%) of BOP customers reside in cities not in villages, as much the rural customers are concern there also the demand is high but due to lack of roads, transport, un availiblity of electricity and tv signals they donot constitute a measure customer base. Companies ought to think innovative and cost effective methods to cater to them. There are companies like Avon and Hul who have catered to such markets by appointing distributors from there own local population who can understand there needs and demands in a much better way .