ITC CHAUPAL Case Study Solution
ITC introduced the plan of connecting with the farmers and offering them a fair price through a system called Echaupal. The aim of Echaupal is to enlighten the farmers and provide knowledge regarding Crops, prices in market and a medium to sell to multiple buyers in the market.Though the system is great and has performed well in the last few decades, yet the sustainability of the system is a question.The reason is thatthe system offers free of cost knowledge about farmingand utilities to the farmers with the freedom to sell to anyone in the market.As in the current scenario there is no giant playerin the market other than ITC and that the quality of crops produced by the farmers has improved by using thetechniques and methods of ITC and that theadvantages ITC offers to the farmers, the whole model might getexposed to a great threat because of the level of freedom that famers have in using ITCechaupal.
The most pertinentthreat to ITC is the entry of the new player with same business model which offers far more perks and price to the farmer. Thison one hand, will drive the farmers away from ITC, while on the other hand, it will increase the power of the supplier-(farmers) to set the prices according to them. This will affect the profitability andrevenues of the company.
In order todeal with the issue ITC should start making contractual agreement with the farmers. Inthatagreement, ITC should clearly define the term to whom with farmers could dealwith using eCHAUPAL. It does not mean that the companyshould monopolize its position, yet it should set certain ground rules, which restrict the farmers from selling to the new rival of the ITC. Moreover, in order to ensure along term relationwith the Farmers, the companyshouldinteractpersonally with thesefarmers, ensuring them the support and transparency of the process. This will create direct link of the farmers with the companywhich in turn would reduce the threat of flight of farmers from the flight of Sanchalak to the rivals.In addition, the approach will create a strong bond and transparency which will work in favor ofmaintaining and retaining the farmers.
ITC has invested great money and energy in developing a model which covers the all dimensions of farming. In order to develop it with time and sustain in market, the company should improve the experience of the farmer by inculcating more involvement and engagement of the farmer. In doing so, the company shall initiate in offering a registrationof farmers to the Echoupal which would eliminatetoo much dependence and humanBias of Sanchalak.During theregistration by every farmer, the family of the farmer would getentitled to study in the local school for free. This will givethe farmers a value of the relation.In addition, to inculcate involvement with the echaupal, the company shall introduce frequent seminars within the village to cognizant the farmers the use of kiosks which will ultimately empower them to contact the ITC directly and also catch if any Sanchalak is being unfair.
ITC CHAUPAL Harvard Case Solution & Analysis
Furthermore, ITC shall offer more product offerings through the Echaupal. For instance the products or offerings which are not present in the village. This will make more farmers switch to ITC network. Similarly, it should create value in the mind of the farmer by incorporating CSR activities in the operation.In doing so, the company can offer solar panels or batteries that could be used in the house for lightening purpose as villages has electricity issues. Moreover, it should grant financial aid and medicalaid to the registered farmers Echaupal which will in turn create strong relation and will also enhance the offering of the echaupal thus sustaining the position of the ITC model in long run.
Lastly, the company can develope chaupal by shifting its prime focus from soya bean to wheat and shrimp. In doing so, the company should expand its offering by offering the information about the product like the origin of the product, the quality and climatic situation of the country and the information related to feed of shrimps& wheat, which can sustain the position of ITC in market, even if rivalry intensifies in the market.
