The case of chotukool
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The document discusses disruptive innovation and describes Godrej's development of the Chotukool portable refrigerator. Some key points: 1) Disruptive innovations are inferior on attributes valued by mainstream customers initially but have other unique features appreciated by niche customers. They start in low-end or new markets and eventually displace incumbents. 2) Godrej developed the Chotukool mini-fridge priced at $69 using cooling chips instead of a compressor. It was portable, lightweight, and energy efficient. 3) The Chotukool targeted rural Indian markets where refrigerator penetration was only 18%, representing a large potential market. It aimed to provide value to people like food sellers through its affordable price
The case of chotukool
- 1. The Story of Chotukool and The Theory of Disruptive Innovation Annie Ruan
- 2. • Disruptive innovation (DI) is defined as “a process by which a product or service takes root initially in simple applications at the bottom of a market or in a new market, and then relentlessly moves ‘up market’, eventually displacing established competitors”.
- 3. Incumbents nearly always win Performance Entrants have advantages (low-end and/or new markets) (inferior; other unique features) Time
- 4. Key features of DI • inferior performance on attributes that mainstream customers value at the time of product introduction • new features appreciated by low-end or new/niche customers (typically cheaper, smaller, easier to use, etc) • “disruptive” rather than “sustaining” to all the significant incumbent firms
- 5. Innovator’s solution • Using “Job-to-be-done Market Analysis” to Gain a Disruptive Foothold – compete against non-consumption and find non-consumers • Disruption is facilitated by “Good Enough” technology that makes things more idiot-proof – simplify the functions which are only used by techies • Initiate changes from the TOP and set up a separate business unit to protect the DI ideas
- 6. Godrej and Christensen • The DI workshop and Innosight • The idea and R&D of Chotokool
- 7. Portable Refrigerator (Miniaturization) Chottucool’ by Godrej and Boyce’ C’ • Designed for people of rural areas in India. • Priced at $69 (world's cheapest fridge) • No compressor, Only Cooling chip and a fan run on batteries • 20 Parts • Involve villagers right from the design to selling of the product. 7
- 8. Value Proposition & Target Market • Portable • Top-opening unit weighs only 7.8kg, • Uses high-end insulation to stay cool for hours without power • And consumes half the energy used by regular refrigerators • Target MOP Market 8
- 9. • Business Model – Partnering with NGOs to create community entrepreneurs to sell Chottu Cool. • Target market — • From pan wallahs, food sellers to flower sellers to even the rural homes gives some idea of how profitable this innovation could be. • Refrigerator penetration is only 18% of the total population, there was a huge potential market. • The difficulty in cultivating a DI • The competitive advantage of Chotokool 9