To create an impossibly low-cost, high-quality new business model, start by cultivating constraints.
In Bangalore, India, the cost of a Western-style hotel room is typically US$250 to $300 per night. But the indiOne hotel charges $20. The indiOne is modern; every room includes an attached bathroom, an LCD television, a wireless broadband connection, a small refrigerator, a coffeemaker, and a work area. The common areas include a pleasant cafeteria, an ATM, a business center, and a small gym. The hotel, which positions itself as the provider of “smart basics” for the intelligent traveler, is very profitable. Its gross margins were 65 percent in 2005, compared with 30 to 40 percent for typical luxury hotels. And the business model is scalable. Ten such hotels are springing up this year in India, and another 25 are planned. (IndiOne is a subsidiary of the Indian Hotels Company, owners of the famous Taj group of luxury hotels in India.)
Not far away, prototypes of a multiple-fuel stove for the rural poor are being tested by a large multinational corporation. The potential consumers of this stove typically use cow dung and biomass (sticks and grass) for cooking fuels. These fuels are inefficient, and the smoke from indoor fires can be harmful.
See full Article.
Posts
