Strategic Business Case for New Go-to-Market Plan at Total Kenya 🌍

A proposed independent business unit aiming to make clean energy affordable for low-income urban households, fostering environmental sustainability and health.

1. Executive Summary 🚀

Total Kenya faces significant challenges in penetrating the low-income urban household market for Liquefied Petroleum Gas (LPG). High upfront costs and the prevalence of dirty cooking fuels hinder adoption. To address this, an autonomous business unit is proposed, ensuring agility and rapid response to market needs, similar to the successful solar lanterns initiative in 2019. Transitioning approximately 630,000 households to cleaner cooking solutions not only reduces environmental impacts but also aligns with corporate sustainability goals. The strategy anticipates a breakeven point within two years, leveraging brand equity and access to research and development resources afforded by multinational affiliations.

2. Identifying the Segment’s Problem 💡

2.1 High Upfront Costs

The initial investment required for LPG adoption remains a considerable barrier for low-income households. Many families opt for cheaper, less clean energy sources, which are often more expensive in cumulative daily costs compared to a refill of LPG.

2.2 Health Concerns

Using dirty fuels poses severe respiratory health risks to users. Transitioning to clean energy solutions can alleviate these issues and improve overall community health.

2.3 Economic Fragmentation

High living costs paired with unstable income levels mean that families frequently grapple with rising fuel prices. The cumulative expense of purchasing lesser energy sources often surpasses that of an LPG refill, making affordable clean energy an appealing alternative.

3. Business Opportunity 🌟

3.1 Market Potential

According to the World Bank, the market potential for LPG in the bottom-of-the-pyramid segment amounts to 5,481 kilotonnes annually. Current trends show minimal direct competition, presenting a unique opportunity for Total Kenya.

3.2 Addressing Health and Financial Concerns

The existing reliance on dirty fuels due to health and economic pressures creates an opportunity for LPG adoption. By presenting LPG as a more economical and health-conscious choice, Total Kenya can strategically position itself within this segment.

4. Proposed Change Plan 🔄

4.1 Establishing an Independent Business Unit

An autonomous unit allows for a focused approach unencumbered by the existing hierarchical structure. This agility is critical for seizing market opportunities.

4.2 Technology Acquisition

Investing in Internet of Things (IoT) technology is essential for innovating pricing models and tracking cylinder usage, addressing the issue of cylinder loss, which has been significant—over 60% in liberalized exchange pools.

4.3 Staff Training and Communication

Robust training for staff and distributors will ensure seamless field support, enhancing customer acquisition and reinforcing brand positioning.

5. Measurable Outputs and Outcomes 📈

5.1 Market Growth Through Affordability

Promoting affordability is pivotal. The introduction of a pay-as-you-consume pricing model will significantly enhance LPG adoption, particularly among low-income households.

5.2 Cylinder Loss Reduction

Enhancing tracking through IoT technology will curtail cylinder losses and ensure better revenue predictions from recurring purchases.

5.3 Reputation Enhancement

Improving living standards within the targeted segment fosters brand loyalty and aligns with Total Kenya's strategic objectives for responsible energy innovation.

6. Stakeholder Relationship Development 🤝

6.1 Key Players Communication

Establishing consistent communication with key stakeholders will facilitate buy-in and cooperation, particularly among suppliers who must be actively managed to avoid disruptions.

6.2 Segment Education

The bottom-of-the-pyramid segment may initially resist change. Comprehensive educational campaigns will be vital in dismantling misconceptions and promoting the benefits of switching to LPG.

7. Operational and Technical Considerations 🚧

7.1 Infrastructure Development

To support the market entry, Total Kenya must invest in additional cylinder logistics, delivery trucks, and storage capacities tailored to the needs of lower-income households.

7.2 Technology Deployment

Strengthening the technological backbone of the operation will be a cornerstone of this initiative, leveraging advancements to enhance consumer engagement and operational efficiency.

8. Resource Considerations ⚙️

8.1 Allocating Time and Expertise

Adopting the 5Ms framework—Manpower, Materials, Machinery, Minutes, and Money—ensures a holistic approach to resource allocation, with a significant investment in research and development to nurture innovation.

8.2 Budgeting for Innovation

Designating 5% of the capital expenditure towards R&D will facilitate continued technological advances, ensuring the offering remains relevant and competitive.

9. Risk Analysis and Management ⚠️

9.1 Proactive Risk Mitigation

Monitoring and addressing potential risks early in the project lifecycle will be essential for maintaining stakeholder relationships and ensuring project viability.

9.2 Managing Change Blockers

The sales team must actively engage with identified challenges in the bottom-of-the-pyramid segment, utilizing awareness campaigns focused on health benefits to promote LPG adoption.

Conclusion: A Sustainable Future 🌱

The proposed strategic repositioning of Total Kenya to cater to low-income urban households represents a significant opportunity for growth, not only in market share but also in fostering healthier communities and sustainable energy practices. By embracing innovation and prioritizing education, Total Kenya can lead the charge in transforming Kenya's energy landscape for generations to come.