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eChoupal Team3 Joann Suen Seema Sangari James Sun Sekhar Varanasi MGP207-2 Fall 2007

eChoupal Team3 Joann Suen Seema Sangari James Sun Sekhar Varanasi MGP207-2 Fall 2007. Problems with Status Quo ITC Use of Commission Agents Lack of Direct Access to the Soybean Source = No control of crop yield, crop quality, predictability of crops harvested

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eChoupal Team3 Joann Suen Seema Sangari James Sun Sekhar Varanasi MGP207-2 Fall 2007

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  1. eChoupal Team3Joann Suen Seema SangariJames SunSekhar Varanasi MGP207-2 Fall 2007

  2. Problems with Status Quo ITC Use of Commission Agents Lack of Direct Access to the Soybean Source = No control of crop yield, crop quality, predictability of crops harvested Lack of Communication and Consistencies with all Soybean Farmers Low sales margin Farmers Open Auction Process Mandi = only source for doing business Word of Mouth/Rumors = Lack of consistency in results – gap of information Transactions outside Mandi not possible Transportation Inefficiencies Ignorant of how to improve their crop and how others were doing better No means of enabling

  3. How did eChoupal create value to farmers? What were the payoffs? Value to Farmers: • Communication bridge • Access to Information • Knowledge Sharing • Access to Goods • Better supply chain to farmers • Better markets for their produce – crop quality management and pricing • Access to vital information about – global pricing, crop cycles, weather, other agri products and vital information to farmers about their local area cropping. Payoffs to farmers: • Access to Information = More informed decisions, i.e. weather forecast allowed farmers to predict the best time to plant and harvest soybeans or to plant another crop altogether • Knowledge Sharing = Sharing of best practices which yields better crops and more efficient and sustainable planting/harvesting processes • Access to Goods = Better crop yield, Control in quality of crop, • Quality products, predictable supply chain • Alternate to Mandi, Farmers could secure better prices  more money for better crops Payoffs to ITC: • Communication Bridge = providing a portal for ITC (production) to connect with the source (farmers) • Growth in soybean revenue • Being able to sell products that were otherwise not sold, i.e. soybean oil, tobacco, etc. • Establishing their own predictable supply chain for quality products • It was a huge marketing channel for other products that ITC manufactures • Build customer trust & loyalty and paving way to sell more ITC products.

  4. What was the transformation role of eChoupal, and how did this impact value creation? • Unpredictability  Control and Quality • Information, knowledge sharing  sustainability, better farming practices, ownership, empowering farmers to make informed decisions • Technology  Elevation of farmers’ education, Increase in profit per soybean crop • Elimination of CAs  $ to performers • eChoupal has become a one stop shop for source of information and buying products (similar to Amazon online store)

  5. Tradeoffs between developing eChoupal within existing socio-cultural norms

  6. Tradeoffs between incremental and “big-bang” rollout.

  7. Key barriers to eChoupal success, and critical factors in overcoming barriers

  8. How should ITC move forward? Is the model sustainable and transferrable to other products? Yes, the process is transferable to other products because of the simplicity of the basis of the system. What are the threats? The major threat would be if the model can easily be copied by other companies to offer similar products which may cause competition for ITC. How should ITC move forward? ITC should look into operational efficiencies. Perhaps provide some services at no cost or lower costs.

  9. Three Key Decisions and Processes(Farmer’s Perspective) • What and when to plant? • Where to sell? • What price and if their soybean crop would be sold?

  10. Problems Faced by Farmers • Little to no access to quality inputs, i.e. seeds, pesticides, herbicides • Lack of information regarding weather – when the rains would occur, if crops could be sold at the mandi, and price • No profits or realization of profits from soybean derived materials • Unfair/Unethical practices by Commission Agent (CA)

  11. Soybean Cycle – From Farm to Market to ITC(Prior to eChoupal)

  12. Process and Information Changes for Farmers to Increase Efficiency • Centralize Information for farmers, Sanchalak, and ITC eChoupal offered a centralized format for all involved in the soybean cycle to communicate with each other, provide necessary information, and method for collaboration and sharing of best practices • Skip the Middleman (CA) Although the CA served as a liaison between the farmers and ITC, eChoupal • Mandi should be a one-stop shop  Selling, weighing, and packaging of crops, and payment of the farmers ITC Representatives (not CAs contracted by ITC) should be at the Mandi to offer those farmers who are skeptical of IT, a one-stop shop to complete his soybean transaction

  13. eChoupal: Fundamental Transformations Increased level of: • Information • Communication • Knowledge Change in culture Power and Dynamics of Roles of Individuals of the soybean cycle/processes

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