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ITC e-Choupal Corporate Social Responsibility in Rural India Case Solution
The case talks about CSR activity of an Indian Conglomerate ITC, which by using innovative technology helped small farmers of rural India and increased its business activity. Under their e-Choupal system, Internet kiosks were set up in villages to help farmers’ access international rates and analyze alternatives for traditional mandis. Through this, middlemen were removed which resulted in higher profits for farmers and efficient supply for ITC. Even though e-Choupal was designed to solve supply chain issues for ITC, but it led the company to realize the delicate balance between profits and economic welfare. The company developed its markets called Saagars where goods and services were made available. This helped them invade the market which was previously unnoticed. Now the company was planning to further expand services, but there are numerous challenges it must face before it starts.
Following questions are answered in this case study solution
How does ITC manage the dilemma of balancing its profit objectives with its social objectives and expectations in implementing CSR? Does the ITC e-Choupal initiative really respond to the development needs, concerns and priorities of rural India?
How can ITC take e-Choupal to the next level in leveraging information technology (“IT”) to deliver business and social benefits?
Poor people at the BOP represent a very attractive market opportunity. The BOP model argues “that selling to the poor can simultaneously be profitable and help eradicate poverty”. Do you agree with this statement in reference to India and ITC’s e-Choupal?
Discuss the accomplishments, prospects, and challenges for the managers of the modern supply chain of e-Choupal.
Case Analysis for ITC e-Choupal Corporate Social Responsibility in Rural India
1. How does ITC manage the dilemma of balancing its profit objectives with its social objectives and expectations in implementing CSR? Does the ITC e-Choupal initiative really respond to the development needs, concerns and priorities of rural India?
Initially, the thee-Chouapl network was developed by ITC in order to solve its supply chain issue. Since the company was facing problems because of inefficiencies in its supply chain, it tried to solve it by installing e-Choupal. Internet kiosks were installed to remove the middlemen from the chain. Also, they offered different services like insurance, weather forecasts, innovative technologies to help them produce better crops. Saggar markets were established to analyze the yield more carefully. These Saagars later turned into the market for rural people where they got access to all the FMCG products which were initially unavailable to them. In this market, ICT was responsible for buying products from other villages and sell them after keeping their profits. From this, one can easily conclude that through e-Choupal ITC was not only removing the inefficiencies in its supply chain but was also making a profit by entering into the markets that were left untapped by many sellers. A deeper analysis of the case study shows that ICT was also well aware of the benefits farmers were reaping from e-Choupal. The internet kiosks that were installed helped farmers access the international rates and the alternative ways to sell their products other than mandi. This helped farmers make more profit. Also since they now sold their products to Saagar that were located in the villages, they were at the liberty of making sales only in case if they get reasonable compensation. These Saagars also made many new products available to village people at reasonable prices. The company was quick enough in realizing all those benefits and in reclaiming e-Choupal to be a CSR initiative on the part of the company to develop rural India.
2. How can ITC take e-Choupal to the next level in leveraging information technology (“IT”) to deliver business and social benefits?
E-Choupal was initially installed to remove the inefficiencies in the supply chain of ITC. With the passage of time; however, it was reclaimed as a CSR initiative installed to help the rural farmers. Initially few services were offered, but with the development of infrastructure, many additional services were introduced. Now, even though the company has developed its services a lot, there are numerous ways in which it can further expand them. Firstly, through e-Choupal, it can offer employment opportunities to the people. Rather than outsourcing people for Saagars, it can directly recruit them from these villages. It will not only reduce the recruitment cost for the company but will also increase the employment rate of rural India. ICT is the only company that has managed to develop its infrastructure in rural areas and hence can provide numerous employment opportunities to rural people. Secondly, ITC can start providing farmers with personalized agri services. ITC can form a team of experts who should carefully examine the soil and needs of the farmer and then guide him accordingly. Regular training sessions can also be arranged for the farmers in which they can be taught about ways to yield a better crop. Through this, they can help farmers produce better crops. These better crops will sell at a higher rate at the international market and hence will generate higher profit for the company. Lastly, the company should also expand its crop base. It mainly deals with soya beans in the international market. It should try to inculcate more crops in its portfolio. This will not only help the company but also the farmers as they will be better able to sell their other crops too.
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