Selco: Using frugal innovation for growth in the renewable energy business
Abstract
This case study is set in India. It analyses how a young engineer has managed to develop an innovative solution to commercialise solar systems to poor villages in the rural parts of the state of Kanartaka before expanding to other areas of India. The case starts with a description of how the founder of SELCO had the idea to start a business in solar energy for poor people located at the bottom of the social and economical pyramid in India.The following part pictures the first years of the company and the many difficulties the entrepreneur, Haris Hande, has to face before achieving success.The third part of the case describes the different components of the offer of SELCO with an emphasis on what makes this solution unique and distinctive not only in India but even in the PV Solar system industry. The case study concludes on the situation of SELCO in 2015 and on the initiative that Haris Hande has taken to expand its activity in the future. The main learning objectives of this case study are first to analyse the characteristics of frugal innovation, secondly to understand why and how a company can innovate when it search to reach segment of customers with a low ability to pay, thirdly to provide students with an understanding of the structure of the markets in dual/emerging countries such as India or China, and finally to discuss the challenges of adapting the model of frugal innovation to developed countries. The case has been written for MBA and Masters of Science students preferably with an international experience.