first Memorandum The Founders, Envirofit Proposition to address main challenges to Envirofit’s business Introduction: Envirofit’s business plan based on the ‘triple bottom line’ strategy focusing on social, environmental and financial objectives prepared by the student and faculty team at Colorado State University is certainly viable proposition and needs a highly thoughtful and systematic approach. For this plan to become a reality, the triple-bottom line model has to be translated into actionable strategies while considering all potential challenges and key elements as depicted in the business canvas model; the main challenges in this context being acceptance of the product and competition from rivals.
Analysis: The retrofit technology invented by Envirofit is a segmented product aimed at motor vehicles that emitted enormous carbon emissions; the identified market being that of two-stroke motor vehicles, mostly used in Asian countries as taxis. As Envirofit ventures into the market to sell its ’retrofit’ technology, Philippines being its target market, it is important to approach in highly systematic fashion, which would also require close consideration of each business aspect. The triple-bottom line objectives, as set forth in preparation of the Envirofit model, which include social, environmental and economical objectives can be achieved by identifying the key activities, critical success factors and key dangers or challenges.
Critical success factors in this venture include entering the potential market and marketing strategy. For successful marketing, the most important factors include establishment of key contacts, marketing strategies, and product pricing aligned to target population. Considering the potential of this new technology and the target market, it would initially be extremely difficult to get venture capital funds and to make good sales in the absence of effective marketing.
Considering the present financial support for Envirofit, other challenges include production and operating costs and marketing costs. By the time Envirofit tackles these challenges, it will be faced with challenges from competitors that could be from local companies, which would further challenge sales and revenue margins of Envirofit. Moreover, Envirofit would require heavy investments in terms of finance, effort and time in marketing their product and gaining acceptance from the target population. Recommendations: In lieu of these challenges, a significant approach to gaining strong position in the market and making the target customers to buy retrofit technology would be to make the product affordable.
Although the present estimation of $220 seems affordable, considering the target population’s earning potential, it would be irrational to assume its affordability. To address this, Envirofit could give various payment options to the users as well as distributors initially, keeping their initial production units at lower numbers. Secondly, Envirofit has to establish strong relationship with the TODAs and local distributors in order to reach larger numbers of end users.
This can be done by giving business offers to these groups apart from emphasizing economical, social and environmental benefits of the retrofit technology.