loader image

It may sound boring, operational, and tactical, but your distribution plan is perhaps your greatest opportunity to magnify the potential of your business. If strategy is the answer to who, what, and how, we spend too much time debating our “who” and “what,” and we give the “how” insufficient credit.

Consider a few examples. By shaving 10 minutes off your taxi wait time, Uber, a company whose mobile app efficiently connects passengers with drivers, is disrupting taxi companies in major cities throughout the US.

Redbox, a McDonald’s invention, saves you 10 minutes of iTunes searching by putting a DVD kiosk in your grocery store. With this simple concept they’ve grown to 36,000 locations; 68% of the US population lives within five minutes of a Redbox kiosk.

My point is, removing just a little time from the path your product/service follows to reach your customer can create a radical advantage, open new markets, and unlock latent demand.

The creators behind Wikipedia, Salesforce.com, WellPoint, and innumerable other innovative companies owe their success to rethinking the process the world had accepted for distributing their product/service.

In Paraguay a few months ago, I came across the most inspiring example yet. Fundación Paraguaya (FP) is one of the oldest microfinance programs in the world. It now serves over 60,000 clients from 20 offices throughout its country. They give loans, train people in entrepreneurship, and build self-sufficient schools.

I was teaching a class and got a chance to steal away one morning to witness FP’s work. Fifteen minutes after FP’s general manager, Luis Sanabria, picked me up from my five-star hotel, we took a few zigzag turns off the main artery, and our truck arrived in a dense urban village you might mistake for a Brazilian favela. We walked up a dirt road littered with rocks, narrowly bordered by half-finished houses, and came to a group of 15 women sitting in a circle. An FP representative was conducting a monthly training for this group of clients.

Sanabria explained that each woman had borrowed working capital from FP to jumpstart kiosks, ice cream shops, or small home-based restaurants. They were now business owners.

But the fascinating part of the FP program came next. The survey.

For years, FP surveyed its clients using clipboards and pencils. Each survey took three hours. What I got a chance to witness was radically different. FP had partnered with Hewlett-Packard to create a visual app (see a video here) that FP representatives use to show clients sets of pictures. One set may represent three ways of accessing water: dipping a container into a river, pumping a well, or turning on a tap. The client taps the image that represents how she gets water.

Their primary objective here is not the obvious one. Ostensibly they are measuring levels of poverty across different dimensions such as access to water, quality of shelter and access to schooling. While they are doing that, the real impact they are having is opening up new opportunities in the minds of their clients.

Leland Stanford, the founder of Stanford University, once said, “Man cannot create what he cannot imagine.” And what this survey, now empowered with an act, is doing is helping clients imagine new possibilities.

As Sanabria shared with me, the woman who clicks on the image of dipping a container into a river for water sees a picture of the tap with water coming out. She starts to wonder, “Why can’t I have that?” This awakens in her the motivation to go after that vision for herself. Since entrepreneurial success depends as much on drive as on skill, instilling this drive accelerates entrepreneurship and self-sufficiency.

Changing how they conduct the survey, using an app rather than paper, creates two powerful advantages. The high-quality imagery helps them better visualize what is possible. And since they can conduct the survey in 20 minutes instead of three hours, they multiply the number of clients they can serve nine-fold.

I witnessed this myself. A group of women, holding FP tablets, clicking on pictures. Though they had never touched a computer or smartphone before, the experience was natural and intuitive. Twenty minutes later we left 15 smiling, bubbly, entrepreneurs excited about the future.

The power of this program really hit me as we walked back down that rocky dirt road to the truck. The FP representative turned to me and explained, “You may not have noticed it but we were standing in that woman’s kitchen. The dirt floor covered by a tin roof had a hole she had dug. She burns wood there to cook. Hopefully, she saw the picture of a proper kitchen and is starting to think that she may want that for herself.”

How can you take out a step, shrink the time, or find an alternative path to get your product/service to your customer? What new markets, currently out of your reach, would open up if you did that?

Leverage
Point
“8Ps” of StrategyOpportunity
for Disruption
Recommended Leverage Points
Position- The farmers, individual and corporate, that you are targeting.

- The need of the agricultural industry that you seek to fill.
3- What technologies do you control that can help you tap into market
segments that you previously thought unreachable?

- What are the potential business alliances you could think about with key players in the segment to serve your customers with integrated solutions? (Serving customers with more integrated solutions example: serving farmers with fertilizers, crop protection and other).
Product- The products you offer, and the characteristics that affect their value to customers.

- The technology you develop for producing those products.
8- What moves are your organization taking to implement Big Data and analytics to your operations? What IoT and blockchain applications can you use?

- What tools and technology could you utilize or develop to improve food quality, traceability, and
production?

- How can you develop a more sustainable production model to accommodate constraints on arable
land?

- What is the future business model needed to serve new differentiated products to your customers?
Promotion- How you connect with farmers and consumers across a variety of locations and industries.
- How to make consumers, producers, and other stakeholders aware of your products and services.
8- How are you connecting your product with individual and corporate farms who could utilize it?
- How could you anticipate market and customer needs to make customers interested in accessing your differentiated products?
PriceHow consumers and other members of the agricultural supply chain pay for access to agricultural products.7- What elements of value comprise your pricing? How do each of those elements satisfy the varying needs of your customers?
Placement- How food products reach consumers. How the technologies, data, and services reach stakeholders in the supply chain.9- What new paths might exist for helping consumers access the food they desire?
- How are you adapting your operations and supply chain to accommodate consumers’ desire for proximity to the food they eat?
- How could you anticipate customer expectation to make products more
accessible to customers/agile supply chain?
- Have you considered urbanization as a part of your growth strategy?
Physical
Experience
- How your food satisfies the needs and desires of your customer.
- How the services you provide to agribusiness fulfill their needs.
9- Where does your food rate on a taste, appearance, and freshness
scale?
- Could the services you provide to companies and farms in the agriculture industry be expanded to meet more needs?
- What senses does your food affect besides hunger? How does your
customer extract value from your food in addition to consumption?
Processes- Guiding your food production operations in a manner cognizant of social pressure.8- How can you manage the supply chain differently to improve traceability and reduce waste?
- How can you innovate systems in production, processing, storing, shipping, retailing, etc.?
- What are new capabilities to increase sustainability (impact on the environment, or ESG) components?
People- The choices you make regarding hiring, organizing, and incentivizing your people and your culture.- How are you leveraging the agricultural experience of your staff bottom-up to achieve your vision?
- How do you anticipate new organizational capabilities needed to perform your future strategy (innovation, exponential technologies needed, agile customer relationship, innovative supply chain)?
- How do you manage your talents to assure suitable development with exposure in the agrifood main challenges/allowing a more sustainable view of the opportunities/cross-sectors?
--------