Making a living out of the wind

Abstract

In rural areas in Kenya, only 6% of the rural population has access to electricity. Hence there is a large market for electricity solutions such as solar and wind power. RIWIK is Dutch start-up that produces and sells Small Wind Turbines (SWTs) in Kenya. An SWT can produce enough electricity for one family or business. RIWIK’s business is based on a local-for-local concept. It means that local craftsmen are responsible for the production and sales of the wind turbines. Hence RIWIK’s SWTs enhance both rural electrification and employment. Currently RIWIK focuses on prosperous households. These households can afford RIWIK’s products without the need for external financing. RIWIK wants to expand the focus to the Micro & Small Enterprise (MSE) market for two reasons. First, the MSE market is large. MSEs account for a contribution of 13% to the Kenyan GDP. Second MSEs can use electricity to increase productivity, expand their products & services and increase their income. However focusing on the MSE market is expected to be complicated. MSEs will need support in purchasing, using and maintaining the product, since they have little financial, educational and technical resources. This research aims at designing a Product Service System (PSS) for RIWIK that contributes to successfully introducing RIWIK’s products on the MSE market. A large part of the data was collected in Kenya, during a field research of 2,5 months. The research analyses the composition of the MSE market and RIWIK’s strengths and weaknesses as a company. Moreover a closer study is done on the interaction between RIWIK and the rural MSE market. The research finds there are three business categories that are most common in rural areas in Kenya: general supply stores, catering businesses, and clothing businesses. There is a need for electricity in the MSE market but there is a lack of infrastructure such as financing, supporting products, training etc. While the MSE market is defined as one of RIWIK’s targetgroups, it is unclear what the business model for the market looks like. Furthermore RIWIK is a technically focused company, in which room for cultural knowledge and clear vision could enhance business success. It is concluded that an end-to-end solution is needed, meaning that RIWIK’s PSS needs supporting products and services for MSEs in order to make their SWTs useful. The research presents an overview of the interaction process between RIWIK and the MSE market. From the overview practical steps for the realization of the Product Service System are derivatived. The steps consist of strategic partnerships & decisions, as well as 47 touch points, RIWIK can design. Two touch points are worked out as an example and finally a business model for the MSE market is presented. In the end the report presents the main conclusions and recommendations for further research.