Wednesday, April 4, 2012

OLPC - Failed Strategy in Africa

In the article, “What Happens Next?” we read that roughly 40 percent of the world’s population will move to middle class status and this brings a new consumer base to tap into. These consumers will be from diverse backgrounds and may not know about established global brands but their tastes will evolve and they will expect quality from the products they use. These new consumers will have only 15 percent of the spending power compared to consumers in developed nations. We also read that companies that can innovate and produce low cost, quality products can successfully tap into this market.

The One Laptop Per Child (OLPC) project has a mission, “to provide each child with a rugged, low-cost, low-power, connected laptop”1. The project looked to kindle self-learning. To this effect they got experts from the industry and academia to innovate and they created a low cost, rugged laptop called the XO. From the article, “Why OLPC is “..dead in the water”… still”2, we see that the OLPC project was not very successful in Africa. Even though the African economy and education among children are increasing, and the XO was a low cost offering in this market, the project was not successful. Why did this happen? Why were they not able to attract consumers?

According to the article by TMS Ruge2, one of the reasons for the failure is because it was the wrong platform to promote self-education in Africa. “As of 2009, there were approximately 450 million phone subscriptions across Africa”2. For many people this was their first introduction to technology and a computing device. The mobile phone infused itself into the daily lives of people. They were able to communicate with each other, tell time, use the inbuilt calculator for performing calculations, look up information. Through all the functions that the cell phone brought, the African people were getting more information and in the process more educated. The XO could not find enough consumers when compared to the cell phone. The XO was developed with a global strategy in mind but it failed to watch global trends. As we see from the article, “Going from Global Trends to Corporate Strategy”, it is very important to study and understand global trends to develop a successful corporate strategy.

So even though companies can innovate and produce quality, low cost products, to be successful they should study consumer needs and global trends and develop an informed marketing and production strategy.


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