The Mountain Institute (TMI), a Washington, D.C.-based non-profit organisation, received a patent for a machine that makes environmentally friendly bricks from dirt, allowing for low cost construction of housing and other structures. TMI saw this technology not only as an environmental win but also as a tool for economic development in emerging economies, and as a vehicle for serving the housing needs of the poor at the base of the economic pyramid.
This effort started with using the machine to make bricks for the construction of a number of small cottages and a medical clinic in Tibet, a market as rugged as its terrain. Encouraged by this initial foray, TMI was considering expanding activities to a wider scale. To do so however, the organisation saw the need for a deeper understanding of the new “business” challenges it faced. In fact, based on the assumed value proposition of the machine, an idea had been gaining momentum within TMI that would take it into new territory – the launch of a for-profit venture.
This case study explores a non-profit’s plans and challenges as it considers different structures and business models for launching a for-profit enterprise. TMI’s experience in this effort is particularly timely and instructive given the increasing interest in developing sustainable market-based solutions that meet the needs of those at the base of the pyramid – the more than four billion people around the world who are primarily embedded in the informal economy.
This case exposes a number of unique and complex challenges that non-profit (and business) leaders of tomorrow will face, including the increasing overlap between the business and non-profit sectors and the difficulties of developing an effective business model for serving the base of the pyramid. Specific challenges addressed involve business strategy for the base of the pyramid, economic development in low income markets, operating and marketing in remote areas with non-traditional partners, and technology transfer and piracy.
|Authors:||John Buffington, Ted London|
|Institution:||Kenan-Flagler Business School, University of North Carolina, USA|
|Key Words||Non-Profit Organisation, Housing Industry, Construction Materials, Environmentally Friendly Bricks, Scaling Up, Growth, Base of the Pyramid, Low Income Markets, Business Strategy, Emerging Economy, Technology Transfer, Piracy|
|Courses||Strategy, International Business, Sustainable Enterprise, Non-Profit Organisation|
|Target Audience||MBA, Business Executives, BBA|
|Permission Rights||This case can be purchased from the GlobaLens website. It is also part of the oikos Case Collection book (Volume 1): Case Studies in Sustainability Management and Strategy published by Greenleaf.|