Problem: What problem is this project trying to address?
Mozambique offers friendly and curious people, gorgeous coastlines and a unique European culture from its Portuguese influence. However, the poverty causes many hardships for its residents, most visibly long walks in the hot sun, often carrying heavy loads on their heads. In the country of 22.4 people, over 50% live on under $2 per day. The budget is generated 55% by foreign aid, and typical lending rates average 25%. However, the economy grew 6.5% in 2010, above the Southern African average of 5.3%, and foreign direct investment is booming with over 600 million in the first half of 2010 (400% over the previous year). The market is expected to grow at least as rapidly as GDP growth of the country, which is predicted at 7.5% for 2011.
Mozambique has a stable democracy with a ruling party that has been in power since colonialism ended in 1975. Over a decade of civil war decimated the infrastructure of the country, but the last 15 years have seen a burst in rebuilding and enterprise. While many attempt t use their poverty to generate income (begging), the President has issued a statement that only work can lead to increased opportunities, and the skills of Mozambicans are expanding. A substantial part of the economy is still informal, as 81% of the labor force work in agriculture. There are over thousands of NGOs in Mozambique, but the world crisis and growing middle class are leading to the entry of more for-profit businesses. With unemployment at 21%, the local population welcomes the new businesses. Knowledge of the market is crucial to understand how people will use the bicycles, how to build our aftermarket network, as well as the value for local advertisers.
Solution: What is the proposed solution? Please be specific!
Mozambikes benefits from an innovative business model designed to unlock a new market segment for a product with developmental benefits. Mozambikes breaks from status quo in its development of a bicycle industry and application of advertising. Bikes today are brought in by Eastern traders who dump bicycles cheaply in price and quality. They do not provide customer service, nor do they create jobs or teach skills. They care not about cost to the consumer, but rather their margin and so they permit the retailers to inflate the prices widely. Mozambikes is a local business with Mozambican employees and a plan to develop a network of local, affiliated technicians. Mozambikes offers fixed, yet attractive margins for retailers to ensure the same market price regardless of distance from an urban hub. Our advertising solution is also unique in providing an effective channel to advertise to low income clients. Moving advertisements have proven to be a powerful form of advertising, as currently used by busses and taxis, but the lack of full supply chain bicycle producers has prevented any advertising on bicycles to date. Lastly, Mozambikes is innovative because it is a social venture. We have a triple bottom line mission, meaning that we seek to maximize economic, social and environmental impact equally with the premise that the business can grow best financially if all three are maximized. As an example, we are selling bicycles at a slimmer margin than competitors, and thus this will enable us to sell more product.