HBR Chotukool Case Study
Godrej and Boyce: Chotukool Case study Question and Answers
Q 1. Assess the business case for Chotukool. What are the critical success factors for their product to succeed?
Answer: Godrej and Boyce’s product-Chotukool is an example of Disruptive Innovation. Disruptive innovation, a term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. Companies often take existing products developed for mature markets and pull out features in an effort to reduce costs and re-design the product for use by consumers in cost-sensitive markets. One objective of disruptive innovation is to remove barriers to consumption. Chotukool, a cooling product is one such low-cost solution for non-users of refrigerators especially in the rural areas.
This product was a success and there are various reasons for that, they are:
1. It was designed for rural India. Refrigerators had immense utility but the rural folk didn’t buy refrigerators. They had various reasons but there was scope for innovation here as the market penetration for refrigerators in the villages was only two percent in 2007. This product was made keeping the rural folk and their needs in mind.
2. When it was launched it was the cheapest product. It offers cooling solutions at a very cheap rate i.e. Rs. 3500. Such a price was very attractive as it was fifty percent lower than the cheapest refrigerator.
3. Chotukool has an impressive product design. It was portable as it weighs 7.8 kgs and is 1.5 feet tall and 2 feet wide. It runs on 12 V battery power and can carry a weight of 30-40 litres.
4. The product also has a unique feature of staying cool even without power. This is a very useful tool in rural areas where there is a shortage of power.
5. Godrej involved the villagers in almost every stage of production and marketing.
Q 1. Assess the business case for Chotukool. What are the critical success factors for their product to succeed?
Answer: Godrej and Boyce’s product-Chotukool is an example of Disruptive Innovation. Disruptive innovation, a term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. Companies often take existing products developed for mature markets and pull out features in an effort to reduce costs and re-design the product for use by consumers in cost-sensitive markets. One objective of disruptive innovation is to remove barriers to consumption. Chotukool, a cooling product is one such low-cost solution for non-users of refrigerators especially in the rural areas.
This product was a success and there are various reasons for that, they are:
1. It was designed for rural India. Refrigerators had immense utility but the rural folk didn’t buy refrigerators. They had various reasons but there was scope for innovation here as the market penetration for refrigerators in the villages was only two percent in 2007. This product was made keeping the rural folk and their needs in mind.
2. When it was launched it was the cheapest product. It offers cooling solutions at a very cheap rate i.e. Rs. 3500. Such a price was very attractive as it was fifty percent lower than the cheapest refrigerator.
3. Chotukool has an impressive product design. It was portable as it weighs 7.8 kgs and is 1.5 feet tall and 2 feet wide. It runs on 12 V battery power and can carry a weight of 30-40 litres.
4. The product also has a unique feature of staying cool even without power. This is a very useful tool in rural areas where there is a shortage of power.
5. Godrej involved the villagers in almost every stage of production and marketing.