Case
Teaching Notes
Supplementary Resources
Abstract
This case looks at a new start-up company, d.light Design, as it was seeking to go to market in India with its solar-powered LED lamps in 2009. Sam Goldman, founder and chief customer officer of d.light, was in New Delhi, India; his business-school friend and co-founder Ned Tozun was in China, the site of the company's manufacturing plant.
One of the key decisions Goldman and Tozun needed to make was whether d.light should focus on just one distribution channel in India, or multiple channels. The startup had limited capital, so it needed to get the distribution question right to generate revenue quickly.
The case thus combines an entrepreneurial problem with an emerging-market, or bottom-of-the-pyramid, channel design challenge. This case does not focus on product design or manufacturing challenges but rather on questions of:
- The constraints d.light faced in creating an aligned distribution channel. These constraints can have legal, environmental, and/or managerial foundations
- Demand-side misalignments in the channel structure that will occur if d.light chooses one or another of the considered channels in the case, namely, (a) the RE (rural entrepreneur) channel, (b) the village retailer channel, or (c) the centralized shops channel
- What mix of channels—or what single channel—d.light should focus on in the Indian market
- The financial return possible based on d.light's current cost structure and overhead expenditures in India
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
Resources
Exhibit 1: Average Annual Household Income (Rs.)
| Income Quintile | Rural | Urban |
| Lowest fifth | 5,651.67 | 15,332.16 |
| Second fifth | 15,480.09 | 33,226.54 |
| Middle fifth | 24,408.17 | 53,948.05 |
| Fourth fifth | 40,974.34 | 85,403.05 |
| Highest fifth | 119,469.20 | 197,267.10 |
| Sample mean | 41,194.40 | 77,612.44 |
Exhibit 2: Types of Work Done by Employed Individuals
Exhibit 3: Average Per Capita Consumption (Rs. per month)
| Income Quintile | Rural | Urban |
| Lowest fifth | 664.19 | 846.41 |
| Second fifth | 582.29 | 905.80 |
| Middle fifth | 629.63 | 1,083.02 |
| Fourth fifth | 779.05 | 1,414.64 |
| Highest fifth | 1,212.58 | 2,172.87 |
| Sample mean | 773.57 | 1,282.91 |
Exhibit 4A: Rural Household Consumption in Various Categories (Rs.)
| Income Quintile | Kerosene (monthly) | Fuel and Lights (monthly) | Cooking and Household Appliances (annual) | Education/Schools (annual) |
| Lowest fifth | 36.27 | 102.37 | 22.96 | 399.22 |
| Second fifth | 37.58 | 106.65 | 13.67 | 383.17 |
| Middle fifth | 38.84 | 140.93 | 23.28 | 563.34 |
| Fourth fifth | 41.03 | 186.93 | 68.59 | 814.62 |
| Highest fifth | 42.11 | 322.63 | 178.11 | 2,299.90 |
| Sample mean | 39.12 | 171.92 | 61.33 | 892.21 |
Exhibit 4B: Urban Household Consumption in Various Categories (Rs.)
| Income Quintile | Kerosene (monthly) | Fuel and Lights (monthly) | Cooking and Household Appliances (annual) | Education/Schools (annual) |
| Lowest fifth | 48.54 | 229.12 | 51.88 | 1,303.26 |
| Second fifth | 50.76 | 299.85 | 53.93 | 1,392.26 |
| Middle fifth | 43.66 | 363.86 | 89.42 | 2,033.91 |
| Fourth fifth | 33.02 | 449.08 | 191.05 | 3,389.76 |
| Highest fifth | 22.78 | 581.16 | 523.63 | 6,069.30 |
| Sample mean | 39.81 | 384.10 | 181.16 | 2,825.46 |
Exhibit 5: Rural Household Access to Electricity
| Income Quintile | % of Households with Access | Average Hours/Day of Access |
| Lowest fifth | 52 | 6.94 |
| Second fifth | 57 | 7.82 |
| Middle fifth | 65 | 9.33 |
| Fourth fifth | 75 | 11.32 |
| Highest fifth | 90 | 13.57 |
| Sample mean | 68 | 9.79 |
Exhibit 6: Urban Household Access to Electricity
| Income Quintile | % of Households with Access | Average Hours/Day of Access |
| Lowest fifth | 84 | 14.76 |
| Second fifth | 92 | 16.71 |
| Middle fifth | 96 | 18.04 |
| Fourth fifth | 99 | 18.81 |
| Highest fifth | 99 | 19.75 |
| Sample mean | 94 | 17.61 |
Exhibit 7: Household Exposure to Mass Media (% of households in which at least one member is exposed to the media type)
| Rural | Urban | |
| Newspaper | 39 | 71 |
| Radio | 48 | 49 |
| TV | 63 | 89 |
Exhibit 8: Image of a d.light Promotion at a Typical Haat in Rural India
Exhibit 9: Image of a Hypermart in Rural India
Exhibit 10: Estimates of d.light Product Economics (Rs.)
| Model # | S10 | S250 |
| MSRP | 549.00 | 1,699.00 |
| d.light revenue | 446.34 | 1,381.30 |
| d.light COGS | –274.50 | –849.50 |
| Distribution costs | –54.90 | –169.90 |
| Profit margin | 116.94 | 361.90 |
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
