Liliana Calvo December 9, 2009

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This model of doing business is based on the idea that if you are a company and you sell your products to poor people (people who live with less than $2.5 per day), without doing charity, you can improve your volume and therefore make profits. As we can read in the article of C.K. Prahalad and Hammond, “while individual incomes may be low, the aggregation buying power of poor communities is actually quite large”. Moreover this model can give to the firm a competitive advantage, because these markets are in the earliest stages and their growth can be extremely rapid. Challenges for the new project:
 Adapt its model => Essilor needs to buy 1000 extra vans to reach 600’000 villages of India.  Diversity of population => It needs staff that speak 23 different languages and more than 400 dialects.  Find local people to advertise camps=> Need local workers and volunteers that were members of local organizations.  Find and retained skilled staff => the best technicians.
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The better idea is to scale up the operation slowly.
First Essilor should try the operation with some villages that have the same language, because there is a big diversity in the population and each state is like a country. The other camps were done in villages with more than 5000 inhabitants in order to benefit from economies of scale. Therefore, Essilor needs to take villages with less than 5000 inhabitants but enough to guarantee that the investment make in the expert of the local language is amortized and to guarantee that the staff can work in more than one village. Moreover if we begin with not so small villages the company will recover more quickly its investment (because it can sell more spectacles in each villages, because there is more population) and then can show to the headquarter the results. The idea to begin with small sample is good too, because if these tests are not conclusive. Essilor can stop its investment before