Innovating in India – The Chotukool Project

As time passes, technology follows a path called the technological trajectory. A technological trajectory is a pattern that entails ‘normal’ solution-finding activities that result in progress. Incremental innovation is responsible for the progress attained (Takahashi, Shintaku, & Ohkawa, 2013). The trajectory represents the rate of technological performance, technological improvement, and technological adaptation in the marketplace. Technological innovation in the strategic management process follows some patterns across the industry over a period of time.

The highlighted case study discusses Godrej Group’s technological innovation that led to the development of the Chotukool refrigerator. According to the case, the innovative effort of the Godrej Group involved a complete rethinking of the technology to provide low-cost refrigerators to the country’s rural markets. The Chotukool refrigerator was created for 80 percent of India’s population that could not access refrigeration (McDonald, Bever, & Ojomo, 2016). The innovative product gained success and huge acceptance in the Indian rural and urban markets.

What were the pros and cons of attempting to develop a refrigerator for India’s rural poor?

Advantages

Various benefits are associated with the decision to create a refrigerator for the rural poor. Firstly, developing a cost-effective or affordable refrigerator for India’s rural poor will enable the organization to enhance its market share. The public accepts such products and, hence, they are more visible in the market. Secondly, through this approach, the organization can reach all market segments. The refrigerator developed for rural India was later accepted by the urban market of India, considering its efficiency and requirements. Thirdly, such approaches reflect the innovativeness and social responsibility of the organization and, hence, add value to its reputation. Finally, Godrej managed to make a real difference in people’s lives by introducing a product they believed was out of reach. The lack of reliance on electricity brought hope to more than 8% of India’s people living in poverty in rural areas.

Disadvantages

Developing cheap and affordable products for the rural class or poor population of India can be a differentiated strategy of the organization. However, it can affect the international standardization and credibility of the product as this approach generates a perception that certain compromises in quality have been made to provide the products at reduced costs. This assumption can damage the company’s reputation and stand among the public. Secondly, the costs of production may be unprofitable if the target market does not retain its interest in the product due to its lifestyle. This may make it difficult for the company to recover the initial costs.

What product and process innovations did the Chotukool entail? Would you consider these incremental or radical? Architectural or Component Competence enhancing or competence destroying?

The product and process innovations that Chotukool entailed have been discussed as follows. Product innovations are associated with the output of the organization in relation to its products or services. The product innovation is the low-cost and small refrigerators when considering the organization. This innovative refrigerator met the demand of the rural poor people for shops and picnics and was portable.

Process innovation refers to the innovations in the process, techniques of production, and improvement of the product’s efficiency. The Chotukool’s cooling mechanism is different. Its cooling technique is based on thermoelectric cooling as opposed to the compressor technology used in most refrigerators. Adopting the cooling technique used in laptopsed to the development of innovative refrigerators (Xu & Yan, 2014). The expensive cooling system required less power and was smaller.

Radical innovations involve the development of entirely new products using new technology or the application of unusual/unpopular ideas (McDermott & O’Connor, 2002). This innovation was radical as Godrej used a new technology to produce a new product. Often, such projects lack support due to the extensive risk involved in the process. Incremental innovation is an extension or improvement of an already existing technology in the market (Sen & Ghandforoush, 2011). The thermoelectric cooling technology is an already existing technology in the industry. However, refrigerators are universally produced using compressor technology for cooling. The utilization of this technology in refrigerators instead of laptops was groundbreaking and expensive, thus radical.

The component innovation is made to one or more components of the system. Hence, this innovation does not significantly change the overall configuration of the system. Architectural innovation is an innovation through which the entire configuration or the system’s overall design is changed. Godrej’s innovation can be categorized under component innovation. Innovation or change has been made to the cooling component of the refrigerator. The remaining configuration and the overall design of the system did not change.

Did the Chotukool pose a threat of disrupting the traditional refrigerator market? Why or why not?

The innovative refrigerator ChotuKool does not threaten the traditional refrigerator market. This innovation is meant to satisfy a specific group of the target market, which is the rural poor of India. This product meets the requirements of this target audience and some of the demands of the urban population. It does not reduce the demand for highly sophisticated refrigerators in the market. However, to meet the requirements of the other segments of the target audience, like the high-end and commercial clients, the traditional refrigerator technology and design are relevant. The demand and expectation for highly sophisticated refrigerators are higher in the market or in the industry.

Is there anything you think Godrej should have done differently to penetrate the market of rural poor families in India?

Other strategies like providing discounting would be successful when considering the rural poor of India. The lack of motivation to purchase the refrigerators due to a lack of understanding about the product would have slowed sales initially. These penetrating strategies would attract the rural class, as they cannot afford the huge initial payment. However, there is a limit to providing discounts for refrigerators to attract the rural poor. In addition, free service is another complimentary service that could be added to the package. This ensures that the clients realize the benefits and are able to spread positive word of mouth regarding Godrej and the products. Hence, the Chotukool penetration strategy shall be considered an effective strategy.

What other products might the lessons Godrej learned which Chotukool apply to?

The lessons that Godrej learned during the production of Chotukool can be applied to future products that target the rural poor. Similarly, the company can seek alternative cooling techniques that reduce the power consumption of their products and make them available to a wider range of clients. The Chotukool’s improvement should seek to improve its power storage capacity and cooling temperatures to improve efficiency. At the same time, they can ensure that all Chotukool refrigerators are shielded from external elements due to the migratory nature of the targeted clients. Developing more refrigerators for the market is profitable as many can afford high-end coolers. The estimated market share is 90%. In addition to these, it is necessary to ensure that they develop refrigerators for clients who can access electricity but cannot afford high-end refrigerators. These actions should expand the company’s market share significantly.

References

McDermott, C. M., & O’Connor, G. C. (2002). Managing radical innovation: an overview of emergent strategy issues. The Journal of Product Innovation Management, 19, 424-438.

McDonald, R., Bever, D., & Ojomo, E. (2016). chotuKool: ‘Little Cool,’ Big Opportunity. Harvard Business School Case, 18.

Sen, T. K., & Ghandforoush, P. (2011). Radical and Incremental Innovation Preferences in Information Technology: An Empirical Study in an Emerging Economy. Journal of Technology Management & Innovation, 6(4).

Takahashi, N., Shintaku, J., & Ohkawa, H. (2013). Is Technological Trajectory Disruptive? Annals of Business Administrative Science, 12, 1-12.

Xu, C., & Yan, M. (2014). Radical or Incremental Innovations: R&D Investment Around CEO Retirement. Journal of Accounting, Auditing, and Finance, 29(4).

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