Scaling to Existing Markets

Home  /  Business Models  /  Scaling  /  Scaling to Existing Markets

We have found that there are two primary ways enterprises in this space have scaled their projects after they have decided to stay in existing markets.

New Products

One way to scale is by offering existing customers new products to meet different needs.

The premise of this type of scaling is that the existing customer base has increased income. International Development Enterprises India, which sells a human powered treadle pump, is now developing a solar model for customers who can now afford the improvement. When enterprises succeed with the distribution of one product, they therefore can introduce another. Green Power sold 20,000 solar lamps in Vanuatu in its first year of operation, and has now begun importing a new energy product, improved cookstoves. Enterprises like Green Power perceive new needs and develop products to fill them. Lifeline Energy originally developed a solar and crank-powered radio for off-grid women, and then realized there was also a huge need for off-grid lighting and developed a lantern, the Lifelight.

New Demographics

Another mode of scaling is done by offering new financing mechanisms or lower cost alternatives to reach a new segment of an existing market (usually poorer customers).

Scaling to new demographics is often implemented by socially-oriented enterprises who feel that they are not succeeding if a large portion of the population cannot access their products. Rather than expanding their existing model to more of the same types of customers, these enterprises try to modify it to reach new demographics.

IDEAAS, which rents solar systems in the Brazilian Amazon, currently penetrates only 50% of its target market, and has therefore introduced a pre-paid system for customers who do not have stable enough incomes for a fixed monthly rental.  To reach new demographics, the enterprise ECCA, which sells solar lanterns in Nepal, is now offering a modified version with the solar panel removed. The panel is instead replaced with a recharging system, which reduces the upfront cost from $50 to $10. Another example of a social enterprise scaling to new demographics is SELCO. SELCO sells solar home systems in India and is experimenting with loan guarantees and other creative financing mechanisms to help poorer customers access its p