BUSINESS POLICY AND STRATEGIC MANAGEMENT

Submitted by: Ankit sharma Roll no: 13

QUES: Define co-creation? Discuss the live examples co-creation ? Ans: Co-creation is a form of market or business strategy that emphasizes the generation and ongoing realization of mutual firm-customer value. It views markets as forums for firms and active customers to share, combine and renew each other's resources and capabilities to create value through new forms of interaction, service and learning mechanisms. It differs from the traditional active firm - passive consumer market construct of the past. "Loncin, a leading Chinese motorcycle manufacturer, sets broad specifications for products and then lets its suppliers work with one another to design the components, make sure everything fits together, and reduce costs. In the past, Loncin didn't make extensive use of information technology to manage the supplier community--an approach reflecting business realities in China and in this specific industrial market. But recent advances in openstandards-based computing (for example, computer-aided-design programs that work well with other kinds of software) are making it easier to cocreate physical goods for more complex value chains in competitive markets." (McKinsey)

QUES: what is e-chaupal? Discuss the features and benefits of e-chaupal. Ans: e-Chaupal is an initiative of ITC Limited (a large multi business conglomerate in

India) to link directly with rural farmers for procurement of agricultural /aquaculture produce like soybeans, wheat, coffee and prawans. e-Chaupal was conceived to tackle the challenges posed by the unique features of Indian Agriculture, characterized by fragmented farms, weak infrastructure and the involvement of numerous intermediaries. Traditionally, these commodities were procured in 'mandis' (major agricultural marketing centers in rural areas of India), where the middleman used to make most of the profit. These Middlemen used unscientific means to judge the quality of the product to set the price. Difference in price for good quality and inferior quality was less and hence there was no incentive for the farmers to invest and produce good quality output. With e-Chaupal, the farmers have a choice and the exploitative power of the middleman is neutralized. How does it work? ITC Limited has now established computers and Internet access in rural areas across several agricultural regions of the country, where the farmers can directly negotiate the sale of their produce with ITC Limited. The PCs and Internet access at these centers enable the farmers to obtain information on mandi prices, good farming practices and place orders for agricultural inputs like seeds and fertilizers. This helps farmers in improving the quality of produce and also helps in realizing a better price. Each ITC Limited kiosk having an access to Internet is run by a Sanchalak-a trained farmer. The computer housed in the sanchalak's house is linked to the Internet via phone lines or by a VSAT connection and serves an average of 600 farmers in the

surrounding ten villages within about a 5 km radius. The sanchalak bears some operating cost but in return earns service fee for the e-transactions done through his e-Chaupal. The warehouse hub is managed by the same traditional middle-men, now called samyojaks, but with no exploitative power due to the reorganized role. Indeed these middlemen make up for the lack of infrastructure and fulfill critical jobs like cash disbursement, quantity aggregation and transportation. Development Benefit The e-Chaupal system gives farmers more control over their choices, a higher profit margin on their crops, and access to information that improves their productivity. By providing a more transparent process and empowering local people as key nodes in the system, ITC increases trust and fairness. The increased efficiencies and potential for improving crop quality contributing to making Indian agriculture more competitive. Despite difficulties from undependable phone and electric power, infrastructure and sometimes limit hours of use, the system also links farmers and their families to the world. Some sanchalaks track future prices on the Chicago Board of Trade as well as local mandi prices and village children have used the computers for schoolwork, games and to obtain and print out their academic test results. The result is a significant step toward rural development. The principle of the e-Chaupal is to inform, empower and compete. At the same time ITC Limited also has extracted value in four steps to make the model sustainable and scaleable:

Elimination of non-value added activities Differentiated product through identity preserved supply chains Value added products traceable to farm practices e-market place for spot transactions and support services to future exchange.

One of the success factors is ITC Limited's managerial competence to execute a complex project and manage the costs. ITC Limited adopted a flexible project management approach called "roll out, fix it and scale up" to deal with uncertainties in a pioneering model