Jul 17, 2022
In General Discussions
Most of today's innovations and business models are targeting existing consumers, that is, people who can already afford products. When terms such as "rising middle class", "increasing disposable income" and "demographic dividend" are used in analytics and consumption reports, they are usually referring to existing consumption patterns. Zero consumption, on the other hand, refers to the inability of potential consumers to purchase and use (consume) a product or service. From the very beginning, Ibrahim's Celtel business model was to target zero consumption of mobile phones in Africa, rather than company banner design targeting a wealthier customer base. 2. Enabling Technology : Enabling Technology refers to delivering higher performance at a progressively lower cost. Technology is the process within an organization that transforms lower-value inputs into higher-value outputs. Enabling technologies such as the Internet, smartphones, the Toyota Production System, or even efficient distribution and logistics operations, can provide companies with a competitive advantage as they expand into new markets. Celtel has adopted a rapidly changing wireless mobile technology network in order to serve many customers who previously relied on wired networks. 3. New Value Networks : Value networks define a company's cost structure. For example, a product must be harvested, processed, stored, transported, packaged, marketed, etc. before it can be delivered from a farm to a supermarket. This network of activities constitutes what is known as the "product's value network", with each activity adding a little cost to the final price of the product. Since most businesses are targeting existing consumers, their cost structure prevents them from targeting zero consumers. Creating new value networks can allow companies to redefine cost structures so that people who would otherwise spend zero can afford their goods and business owners are profitable. One of the ways Celtel is doing this is by changing the way consumers buy airtime on their phones. Not only did it introduce "scratch cards" (cards that let people buy airtime), but it also helped Celtel redefine its cost structure by leveraging its informal retail network across the continent.