Case

1. Bicycle for India
By Vijaya Narayanpeddy and Nancy Sampson
Himanshu Singh (1012)

2. “Affordability isn’t everything
It’s the only thing”
-Paul Polak

3.  International Development Enterprise
 Founded in 1981
 International not-for-profit corporation devoted to the
manufacture, marketing, and, scalable micro-irrigation
and other low-cost water recovery systems throughout
the developing world
 Facilitates local manufacture and distribution of these
products through local supply chains that sell to farmers
at an affordable price
 This strategy allows farmers to grow higher value and
surplus crops, and in turn links them to high-value crop
markets where they can realize profits from their higher
yields.

4.  Mainly work in Africa (Burkina Faso, Ghana,
Ethiopia, Zambia, Zimbabwe, Mozambique), Asia
(India, Nepal, Bangladesh, Myanmar, Cambodia
and Vietnam) and Latin America (Honduras and
Nicaragua)
 Decentralized organizational structure
 Head office in India - New Delhi
 Field office in in India - Orissa, West Bengal,
Aurangabad, Bangalore, Indore, Himachal Pradesh
and Udaipur

5. Bicycles

6. Bicycles

7. The Bicycle Project
 Started in the year 1992
 A challenge for designing bicycle for farmers living
in rural area, to take farm produce to the market.
 Those farmers, who cannot afford to buy a bicycle
(i.e previously they don’t own a bicycle <Target
customer>)
 Would improve global environment.
 Rob Carter, a mechanical engineer involved in the
project

8. Target Area
Urban Consumer Rural
Urban
Producer
Rural

9. Some facts (As of year 1994)
 Total population = 952 million
 Approx. 50% live BPL, now 41.6%
 Average annual income = $270 (Rs 8100)
 76% population living in rural area are farmers.
 10% of farmers are “landlords” having 10-50 acre land
 70% are “small farmers” having less than 10 acre land
 20% do not have any land.
 Income status of farmers
 50% earns less than Rs 4000 per year (Rs 333.33 pm)
 30% earns Rs 12,000-30,000 per year (Rs 1000 -
2500pm)
 20% earns more than Rs 30,000

10. Some facts (As of year 1994)
 In 1994, India produced 7.4 million bicycles (7.3% of
the world production) - Not affordable to farmers
 Price range of Hero models was Rs 930 - 2500
Market status
Hero Atlas BSA Others
10%
15%
50%
Market Leader is ‘Hero’
25%

11. The bicycle project
 IDE bicycles must have;
 Simple design – could be manufactured and served in rural
setting
 Durable, with ease of maintenance
 Minimum speed capability of 6 miles an hour (twice the speed
of walking)
 Withstand gravel-paved or dirt roads
 Transport of minimum 50Kg of cargo
 Retail including profit margin at not more than $ 15 (approx Rs
450)
 %15 is a target lesser than the minimum price in India for
a bicycle.
 IDE also emphasized on the price, that it should not be
higher than the second hand bicycle.

12. Technological development
 Main aim to reduce the cost
 Stripped bells and whistles
 Chins and sprockets were removed and the drive was
placed directly on the first wheel
 Sheet metal was to be used to make the frame
 The key success of the project rested on a wheel
(How??)
 Cheapest wheel available was of $5 each. i.e. $10 for
both wheel
 Frame and front fork will cost $ 10
 Over all cost would reach $20 (Higher than the ceiling
retail price)
 Plastic Wheel can be the solution (given by Joe Montgomery)

14. IDE concern
 Their bike would be the cheapest
 With the increase in income gradually, target
consumer may shift towards the conventional
bicycle.

15. Field Testing
 Prototype suitable to Indian farmers were made, and
tested
 Subcontracted to local village NGOs
 Mixed response
 Stable/unstable
 Easy/difficult ride
 Farmers found it uncomfortable
 Limited carrying capacity

16. The challenge
 To find solution for wheel and bearings
Samples were
•Plastic wheel made collected and were
up of nylon reinforced sent for physical
with fiberglass (used
testing in University of
in wheelchair) – It
would be costly Colorado
•Polypropylene –
found in twine used Later Canadian firm also
for bailing hay, will be shown unwillingness to
reinforced with jute. make more samples

17. The challenge
 Cannondale - An American bicycle manufacturer
was very impressed with what Paul has done
 Paul realized that Best fit is in Hero, but his ceiling
price is too low to agree Hero upon
 Or Paul should look for other industrial giants like
Tatas and Birlas as partners

18. 4 A analysis
 Awareness - Positive
 Availability - Positive
 Affordability - Positive
 Acceptability - Positive

19. What he should do??
SCRAP CONTINUE