Friday, June 01, 2007

Can we learn from Coke distribution?

Considering all the essential products and services that are unavailable to the poor, shouldn't we be inspired by the fact that one can purchase a Coke in nearly every village on the earth. Coca-Cola is a brilliant model of systems of suppliers, distributors, wholesalers, and retailers.

One of their methods could be termed microfranchising. In South Africa, Coca-Cola operates an Entrepreneur Development Program. After selecting entrepreneurs they provide training in business skills, such as managing cash flow, creating profit, marketing and following legal requirements, as well as provide access to startup capital to acquire inventory, coolers, trolleys, bicycles, etc. The program is mutually beneficial as it provides employment and education to local entrepreneurs while helping Coca-Cola gain access to undeveloped markets.

The most interesting aspect in the EDP case is that Coca-Cola originally tried to not impose marketing standards and procedures but to let it develop 'naturally' according to local entrepreneurialism. However, over time, Coca Cola saw that helping small businesses launch was insufficient, they saw a need to provide ongoing training to help them be sustainable. Compare that to the experience of microcredit which has traditionally limited its services to provide access to credit with the assumption that entrepreneurs could take the opportunity and run with it. Just as Coca-Cola saw the need to provide extra guidance, microcredit institutions should be interested in the concept of microfranchising as it can be a mechanism to provide ongoing guidance to promote sustainable livelihoods.

Source: Where there are No Jobs

1 comment:

Tielman said...

Juts like micro credit the system needs some good controls and systems. This system as been adopted by numerous operations in Africa and Asia. Here are some pictures: