Envirofit Reid Patton November 17, 2015

Analysis Tim Bauer created Envirofit to try to reduce IAP, or indoor air pollution. Around 3.6 million people die each year due to IAP Environfit’s mission is to revolutionize cookstoves in developing worlds to solve this problem if 100% of the 500 million cookstoves in the developing world were converted to the energy efficient models, 750 million tons of carbon dioxide would be saved Equivalent to taking all the passenger cars in the US off the road Envirofit teamed up with Shell Foundation had own pilot projects. Key Takeaways from Shell project and Envirofit solution: Use biomass fuel most commonly used fuel in household affected by indoor air pollution Envirofit usesbiomass fuel and a super efficient combustion chamber that cuts down emissions by 80% and doubled fuel efficiency Need a for profit business model partnerships with NGOs result in no sustainable impact Need centralized production of cookstoves to achieve scale, high performance, & durability Stoves produced in China allowed Envirofit to run an efficient and integrated supply chain, achieve economies of scale, and sell the cookstoves for a low price Need to raise awareness about IAP households lacked knowledge of the issues of IAP Did educational programs and campaigns to generate consumer awareness about IAP Had a promo video with a relatable woman, clean cookstove, and clean home Value Proposition: doubles fuel efficiency, cuts down cooking time, reduces pollution by 80% (so creates a cleaner home), 5 year warranty, better for health, better for environment, Issues: customers have weak buying power, retailers not pushing product, only selling when there is a promotion, husbands are resistant to buying the cookstove, have not yet come up with a sustainable business model

Quantitative Bauer is concerned because sales were tapering off in 2010 and continuing to taper off into first quarter of 2011 2011 first quarter sales are lagging behind 2010 first quarter The increase in sales volume from 2008 to 2009 was 29,505/75,168= 60.7% The increase in sales volume from 2009 to 2010 was 1- (75,168/82,246)=8.6% The adoption of the Envirofit’s cookstove is slowly dwindling, and while the margins are still increasing (292,078 in 2009 and 491,164 in 2010), the slowing growth in sales shows that Envirofit is not on a sustainable path

Solutions Overall, Envirofit’s mission is to significantly reduce IAP by revolutionizing cookstoves in developing nations while generating a profit. At the moment, Envirofit has not been successful in achieving its mission because it has not achieved sustainability. People mainly buy the product when there is another incentive like a special deal or promotion. To be sustainable, Envirofit should be able to sell its cookstoves without incentives. To do this Anchan needs to change his marketing strategy and: Target Husbands. Husbands have the buying power, and while the TV commercials need to first appeal to the wife so that they urge their husbands to buy the stove, the commercials need to show the husbands what is in it for them To do this, Envirofit needs to highlight 2 key parts of its value proposition: 5 year warranty: this gives financial security to the husband buying it Fuel efficiency= saving a lot of money in the long run The pricier upfront cost will be worth it in the long run because people will not have to spend as much money on fuel Incentivize retailers: Have regional competitions. Whatever store sells the most Evirofit cookstoves in a certain amount of time get a monetary bonus this is a sustainable incentive because overall more cookstoves will be sold because everyone wants the bonus