The Story of Chotukool and The Theory of Disruptive Innovation

Annie Ruan

• Disruptive innovation (DI) is defined as “a process by which a product or service takes root initially in simple applications at the bottom of a market or in a new market, and then relentlessly moves ‘up market’, eventually displacing established competitors”.

Per

form

ance

Time

Performance that customers

can utilize or absorb

Sustaining innovations

Incumbents nearly always win

Entrants have advantages (low-end and/or new markets)

(inferior; other unique features)

Disruptive innovations

Key features of DI

• inferior performance on attributes that mainstream customers value at the time of product introduction

• new features appreciated by low-end or new/niche customers (typically cheaper, smaller, easier to use, etc)

• “disruptive” rather than “sustaining” to all the significant incumbent firms

Innovator’s solution

• Using “Job-to-be-done Market Analysis” to Gain a Disruptive Foothold – compete against non-consumption and find non-consumers

• Disruption is facilitated by “Good Enough” technology that makes things more idiot-proof – simplify the functions which are only used by techies

• Initiate changes from the TOP and set up a separate business unit to protect the DI ideas

Godrej and Christensen• The DI workshop and Innosight• The idea and R&D of Chotokool

7

Portable Refrigerator (Miniaturization)

C’Chottucool’ by Godrej and Boyce’

• Designed for people of rural areas in India.

• Priced at $69 (world's cheapest fridge)

• No compressor, Only Cooling chip and a fan run on batteries

• 20 Parts

• Involve villagers right from the design to selling of the product.

8

Value Proposition & Target Market

• Portable • Top-opening unit weighs

only 7.8kg, • Uses high-end insulation

to stay cool for hours without power

• And consumes half the energy used by regular refrigerators

• Target MOP Market

9

• Business Model – Partnering with NGOs to create community entrepreneurs to sell Chottu Cool.

• Target market — • From pan wallahs, food sellers to flower sellers to even the rural

homes gives some idea of how profitable this innovation could be.

• Refrigerator penetration is only 18% of the total population, there was a huge potential market.

• The difficulty in cultivating a DI• The competitive advantage of Chotokool