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Afghan Sun case study
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Afghan Sun
Business paper 1 case study
Characters
Su
- Wants to give back to society and other communities
- Has experience in running her own business (HH)
- Inspires and motivates her employees
- Has good relationships with governments and NGO’s which will be beneficial for obtaining external sources of finance and other types of aid when setting up
Arif
- Runs AK bank which provides microfinance to people in Bangladesh
- Shares Su’s vision
- Is willing to move into the Afghanistan market to provide microfinance to Afghans to buy solar panels.
David
- From Afghanistan therefore he understands the culture and the market and will be very useful in communication and marketing
- He asked to work on the project therefore he is motivated
Salima
- Also from Afghanistan therefore she understands the culture and the market and will be very useful in communication and marketing
- Has experience as a production director in factories so has knowledge as to how a production facility should operate, and how to minimalize waste effectively
Stakeholder analysis
Stakeholder analysis
Internal
Su
Owner of both HH and AS
Experienced
Started AS because she wanted to give back to society
Inspires and motivates her workforce
Managers
Experienced in HH
Volunteers
No training required = low costs
Junior staff
Volunteers
Empowering HH workforce
External
Government
Conflict. Afghanistan is currently war-torn
Parts of the country is still politically unstable
International forces remain in the country to help rebuild the infrastructure
Suppliers
They must be ethical
Customers
Poor, rural Afghanis who live in areas with unstable electricity and lack of
infrastructure
They have low disposable incomes and would benefit greatly from
microfinance and electricity
Society
Unstable, not all parts are peaceful
STEEPLE analysis
Country A(developed)
Social
- Low but rising unemployment
Technological
- New facilities needed
Economic
- Developed economy
- High costs of wages
- Stable currency
Environmental
- Complex transport links to Afghanistan
Political
- Stable environment
- Election may lead to change
- Limited government assistance
- Free market economy
Legal
- Major trading agreement
Ethical
- Sustainable environment
Country B(developing)
Social
- High unemployment
Technological
- Facilities available
Economic
- Developing economy
- Low costs of wages
- Falling currency
Environmental
- Straightforward transport
Political
- One party state
- Government encourages investment from overseas
- Grants available
Legal
- No major trade agreements
Ethical
- Economic development is prioritized.
STEEPLE analysis
SWOT analysis
SWOT analysis
Weaknesses
- Su doesn't have any experience running a social enterprise
- Does not have a large workforce.
- Lack of skilled workforce
- Not being able to deliver product to some areas
- Uncertainties in Human Resource and marketing planning
- Will have to bare huge losses for a whole year
Threats
- Might get taken over by AK or another company
- Afghanistan is emerging from a war and some parts of the country remained politically unstable (It is a country which is emerging from war so people would not use their money to buy solar panels
- rather use them to support their household).
- People who live in rural areas lack electricity in afghanistan & have a very low income which could be hard for them to invest in solar power.
- Some areas have no infrastructure
- Unstable economic environment
- Distribution of product in remote areas
Strengths
- Has money from HH to fund her new business
-Found suppliers that share her vision
-Helped by AK banks in Bangladesh
- His experience is an asset of the company as well.
-Employees as well as Sunchelin have a clear vision
- Suppliers share it as well
-Informal organisational structure: Su is inspired and motivated managers
- Good as a manager
- Laissez-faire management/democratic. Since su still takes part in major decision makings/Situational
-Limited liability to AS
-She has a contingency plan for when things go wrong
-Seldom conflict between managers
- Managers are intrinsically motivated and are both afghani hence have better understanding of the particular market.
-Experience of the managers (David) who are internally recruited - source of motivation for them as well as an asset as they are both Afghan
Opportunities
- To manufacture solar power systems in Afghanistan
- To outsource some of AS’ production
- Stakeholders giving a sort of financial assistance
- To merge or work with AK Bank in the future
- No competition in this particular market (Gives Su the first mover’s advantage).
- If the microfinance company sets up successfully, the afghanis would have the necessary funds to purchase AS’s products
- Electricity is a necessity, thus, demand could be inelastic.
- Ease of entry, a new market - they would be able to fill the niche
- Work with international forces to rebuild infrastructure in the country (line 71)
- Potential to gain worldwide reputation and recognition for the good work done in Afghanistan in the eyes of international welfare teams and peace keeping forces which are deployed
- Su made a fortune from her successful business High-end holidays (HH)
- Now no longer takes part in the running of HH. She has an input with the strategic decision making. Also provides the inspiration
- Su met Arif Koomar in Bangladesh. He is a microfinance provider at AK Bank.
- He provides finance for 3 million people in Bangladesh to buy solar power systems.
- Su made a quick decision to open a similar scheme in Afghanistan as there are around 34 million people and there isn’t a reliable source of electricity. She aimed at poor and remote families.
- Su set up the social enterprise Afghan Sun (AS) – A private limited company – and recruited volunteers from HH
- After lots of research AS decided to make solar power systems using cellular manufacturing. They also identified suppliers and encouraged Arif Koomar to work with AS and expand AK Bank into Afghanistan.
- Su appointed David (who asked to work on the AS project) to help make and sell the solar power systems. He is an afghan and worked in HH’s marketing department.
- Su also appointed Salima, who is also an afghan and has experience with a large manufacturing business as a production manager.
- Su is deciding whether to hire experienced HH managers or promote junior employees from within HH as senior managers for AS.
- Su is also deciding where to produce the products. She does not want to outsource the main production, but does wish to outsource the production of certain components, ideally in nearby countries.
- David believes the solar power systems are product orientated and that the customers have to be taught about the benefits.
- David is also investigating distribution as the customers are in remote locations with poor infrastructure.
- Su has already decided that most of the finance for production will be provided by herself and loans from HH.
- International forces remain in Afghanistan to help rebuild the infrastructure and restore peace and reinforce democracy.
- Management of AS have to make decisions on production and distribution as soon as possible and get the project started.
Timeline of events
Key terms
Key terms
https://quizlet.com/267995715/business-management-case-study-afghan-sun-flash-cards/