1. What do you believe are the greatest
challenges facing the sector or industry you
would like to specialize in at IE? What role do
you hope to be able to play in this sector or
industry in the medium term?
Presentation submitted to IE Business School by Nora Petty
March 2, 2014

2. social enterprise (n)
(1) An organization that seeks to create social value
through commercial activity
Purely philanthropic
Not-for-profit
Social Enterprises
Purely commercial
For-profit
Social enterprises fall in the broad spectrum between non-profit and for-profit
organizations. Some still receive part of their funding from donations while others are
entirely self-sustained on commercial revenues.
Since I am interested in working for, and venetually starting up, a social enterprise in
Africa, I will focus this presentation on social enterprises in developing countries.
2

3. CASE EXAMPLE: WHAT IS A SOCIAL ENTERPRISE?
Bridge International is an example of a social enterprise. It seeks to accomplish a social
mission while generating profits.
SOCIAL PURPOSE
Provide high-quality affordable
primary education to families
earning less than $2 per person
per day
FINANCIAL RETURNS
The for-profit Bridge academies
can sustain themselves on student
fees, which are lower than 70% of
other low-cost options in the
communities.
Source: http://www.bridgeinternationalacademies.com/
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4. CHALLENGES FACING SOCIAL ENTERPRISES
IN DEVELOPING COUNTRIES
4

5. DEVELOPING A RELEVANT, AFFORDABLE
PRODUCT (OR SERVICE)
1
Design
• Take into consideration the unique
needs of the target customers; do
not just make small changes to
products developed for first-world
markets
3
Access
• Product must be able to reach the
customer in both rural and urban
areas; may require innovation in
terms of distribution and sales
2
Price
• Massive price reductions are
required, but need to maintain the
product performance
4
Environmental adoption
• Product must endure in difficult
environmental conditions (e.g.,
noise, dust, poor water quality,
electricity fluctuations)
• Must use available technology
Source: Prahalad, CK. The fortune at the bottom of the pyramid. NJ, USA: 2010.
5

6. CASE EXAMPLE: DEVELOPING A RELEVANT, AFFORDABLE
PRODUCT OR SERVICE
M-PESA, KENYA
1
•
•
•
•
Send remittances home
Buy goods and services
Pay bills
Withdraw money
Design
Filled critical gap in money transfer
services and need for security
2
Price
Tiered pricing system according to
amount of money transferred/withdrawn
3
Access
There are more than 40,000 agents for
M-PESA around the country
4
Durability
Compatible with basic phone models
Source: http://www.microfinancegateway.org/
6

7. OPERATING IN LOW RESOURCE ENVIRONMENTS
“Across Africa, only 38% of entrepreneurs
agree that infrastructure provides sufficient
support for new and growing firms.”1
-Omidyar Network Report
“Lots of people looking for work are
not fit to be hired. Universities are
too slow to create new courses and
curriculum.”
– Roshan Paul, Amani Institute
1Source:
2Source:
http://www.omidyar.com/
http://www.businessdailyafrica.com/
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8. CASE EXAMPLE: OPERATING IN LOW-RESOURCE
ENVIRONMENTS
Kickstart developed a manually operated irrigation pump to help farmers in Africa
transform subsistence farming into a profitable small business. At the start, they
manufactured the pumps in Africa…
Source: www.kickstart.org
8

9. CASE EXAMPLE: OPERATING IN LOW-RESOURCE
ENVIRONMENTS
CHALLENGE
• Inconsistent products
• Inconsistent
availability of raw
materials
• Shortage of skilled
manufacturing labor
• Difficulty finding
capital equipment
SOLUTION
• Manufacture product
in China and send to
Africa
DRAWBACK
• Diminished local job
opportunities in Africa
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10. THE DOUBLE BOTTOM LINE: BALANCING SOCIAL
AND BUSINESS NEEDS
Social enterprises face a unique challenge to combine social
objectives with profit generation.
Social
Purpose
Profit
Generation
10

11. CASE EXAMPLE: THE DOUBLE BOTTOM LINE
Microfinance is an inherently expensive endeavor. To create efficiencies and increase
profitability, some microfinance institutions have raised interest rates and/or automated
loan approvals. However, these revenue increasing interventions can reduce the social
impact.
Given the nature of micro loans, it takes a lot
of clients to generate profit.
CHARGE HIGHER
INTEREST RATES
Low-income clients may
be willing to spend more,
but what is an acceptable
rate?
Loan officer
AUTOMATE LOAN
ACCEPTANCES
It is hard to accurately
identify low-income
clients using an
automated system.
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12. MY ROLE IN SOCIAL ENTERPRISE
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13. MY CAREER AMBITIONS…
Leverage my experience
working for non-profits in
Southeast Asia and subSaharan Africa
Acquire business skills that
will enable me to run a viable
for-profit enterprise
Medium-term career path
Attend IE Business
School
Work for an established
social enterprise
Launch my own social
enterprise
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14. SOCIAL ENTERPRISE IDEA: FRANCHISED PHARMACIES
FRANCHISED
PHARMACIES – E.AFRICA
• Improve access to highquality medicines
• Lower prices through
more integrated supply
chain
• Aim to increase access in
more rural areas through
smaller outlets and/or
mobile sellers
• Partner with government
and non-profit
organizations to train
providers
1
Design
Sell high-demand medicines and other
products
2
Price
Offer high-quality pharmaceutical
products at cost-plus pricing
3
Access
Start with pharmacies in regional hubs; explore
options to reach rural areas (e.g., mobile sellers)
4
Durability
Design simple, but clean shop design
14