Social entrepreneurship - a trend or a real shift ?

We can describe a social entrepreneur as someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas business entrepreneurs typically measure performance in profit and return, social entrepreneurs assess their success in terms of the impact they have on society. While social entrepreneurs often work through nonprofits and citizen groups, many work in the private and governmental sectors.

One well known contemporary social entrepreneur is Muhammad Yunus, founder and manager of Grameen Bank and its growing family of social venture businesses, who was awarded a Nobel Peace Prize in 2006.

To give an example, Danone SA joined the Grameen group and created the Grameen Danone Food, which is a plan of development in Bangladesh, using local farmers and local companies as suppliers.
http://www.danone.com/fr/actualites/focus/grameen-danone-food.html


http://www.businessweek.com/magazine/content/04_18/b3881047_mz007.htm?chan=search


Nowadays, our society is in constant evolution. People are more aware about their rights and give more importance to their health and well-being.
Entrepreneur must understand that even if profits are of course important, the well-being of their employees is primordial cause it is thank to them that a company can make those profits.
I think that it is more than a trend but a real need for our society.

That is also why the impacts on the environment are always mentioned for each strategy of a company. Companies are many to become "environmentally-friendly", first of all, for their image but also because they understand that our future depends on that.

Entrepreneurs have to overtake the research of profit and only profit. The example of Danone shows that a multinational can think socially and still generate profits.

In my opinion, social entrepreneurship has become a real shift and we are all beginning to understand that we really have to play a role in the society.

Vente-privée.com

Vente-privée.com is an e-business providing sales for is own members and only for them. The brand sold are well-known one and sometimes prestigious, such as Longchamp, Lancel etc. and the customer benefits from great sales (-30% to -70%).
Sales are about all type of goods such as clothes, accessorizes, sportswear, toys, high-tech…

To be invited in these sales, you need to be invited by somebody who is already client. Once member of the club, you receive regularly on your mail box invitations for the sales. The person who invited you will benefit from a discount at your first purchase.

The sales are timely-limited and can last 4-5 days maximum. The quantity of the good sale is limited too so that you need to be almost the first to visit the site if you really want to find the good you want.

For example, if the sale "Point à la ligne" is interesting for you, click on “s’inscrire à la vente”. As soon as the sale will start, you will be able to buy what you want and then to receive it at home.

This concept is a very interesting one for different reasons:
For the customers :
- Time saving because no need of moving to the right store
- Money saving because of the big discount

For the brands :
- Elimination of inventories for the brands
Indeed, this concept solves the problem of inventories for the brands because it permits to eliminate the old collections which are not going to be sold.


How does vente-privée make money?

http://www.vinimarket.com/dossier_49616_fr.htm

By registering and selling the goods for all the companies’ presents on the web-site, the company earns commission. Vente-privée is part of partnership agreements with some brands and earns commissions from the sales.


This business exists of course off-line but only in big cities, there are a lot of “ventes privées” in some shops in Paris but it is not always well-known, the publicity in not as efficient as on the net and only one brand is represented in each vente privée.
I really think that the concept is more efficient online.
To develop the business of vente-privée, what could be interesting is to develop the partnership and the advertisement. Indeed, there is no advertisement on the web.
However, the fidelisation of the client is good so the publicity can be as efficient as the advertising.

Who does this business compete with?

It competes with the ventes privées off-line which have no competitive advantages except the possibilities of see and try the clothes.
But as nowadays, the e-shopping is booming, the web-site vente-privée.com is still growing.

Since a few months, 24h00.fr is the new competitor of vente-privée.com. The manager is following a strategy consisting in evaluating the issues of vente-privée.com and trying to take advantage of them.
http://www.lentreprise.com/3/3/5/article/12038.html

The Freemium Business Model

The freemium business model works by offering basic services for free, while charging a premium for advanced or special features.
The word freemium result from the combination of the two aspects of the business model: free + premium. The business model has gained popularity with Web 2.0 companies.

The freemium business model was first articulated by venture capitalist Fred Wilson on March 23, 2006.
"Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc, then offer premium priced value added services or an enhanced version of your service to your customer base."

After describing the business model, the problem was to find a name for this concept. After over 30 names suggestions, Jarid Lukin of Alacra, one of Wilson's portfolio companies coined the term "freemium". The term has since appeared in Wired Magazine and Business 2.0, and has been used by prominent bloggers such as Chris Anderson (from the Longtail) and Tom Evslin.

Web sites such as Linkedin.com, Flickr.com or Skype.com are examples use of the Freemium business model.


Taking the example of Skype, this company makes its users insanely productive by letting them talk with any other user worldwide for free.
The company makes money by charging users for connecting to phone systems outside of its network. It's a freemium model, indeed, Skype attracts users with free services, and then it charges them a premium for special features.
Bruce Sterling, in the article "Blogging for Dollars," Wired, June 1, 2006 gave his opinion on the concept:
“Files are stored centrally, so you will not want to use this method to transfer sensitive data. And since somebody has to pay for storage and bandwidth, you get limited capabilities for free — premium plans get you more storage, bandwidth or access to your files (Web 2.0 jargon alert: this free-to-premium escalation plan is being called the 'freemium' model)”.

Positive points:
-Basic services can be used by everybody and for a website like Linkedin, it is very useful in order to find work. So it can be viewed as a real work tool.

-The users are not bounded with the website

-The free services make the website more well-known because it increase the number of users.


Negative points:
-Basic services are often really basic and only serve to attract the customer to order the special features.

-The price you pay for advanced services is not always fair regarding the service provided.


Links:
http://www.contentmatters.info/content_matters/2006/05/whats_in_a_word.html
http://www.wordspy.com/words/freemium.asp
http://fr.wikipedia.org/wiki/Accueil

EasyHotel

EasyHotel is specialized in hotel booking on internet. It offers a safe and clean room at the best possible price in Great Britain, Switzerland and Romania. Moreover, it allows the customers to book rooms in hotels (other than Easy hotels) at low prices in more than 100 countries all over the world (Europe, Asia, Africa)

Mr Stelios, the founder of EasyHotel, took his inspiration from Japanese “Capsule Hotels”. The idea is that the customers can accept less space in their room for a better price. Easy Hotels offer tiny rooms (between 5 m2 and 9 m2) in basements, without ventilation, TV …

A minimum to live on!

It is useful for young travellers who privilege low prices and judicious locations to the comfort, or for businessmen who stay only a couple of days. Rooms are not designed for families or senior citizens.

Easy Hotel targets short-stay customers

The Easy Group business model is build on a maximized profitability of their services or products. On one hand, start investments and maintenance expenses are minimums. That is why the model could difficultly be applied offline. Superfluous services are banished. And on the other hand, EasyHotel targets very precise customers in order to attract them and sell its concept.

Two kinds of competitors exist on the web: Those who allow customers to book rooms in a large variety of star-ratings hostels (http://www.expedia.fr/ or http://www.ratestogo.com/ for example) and those who offer cheap rooms in private hostels (Formule1 hostels) or in hostals (http://www.hostelworld.com/). EasyHotel is somewhere in between: the concept consists of a cheap private room.

Nevertheless, today this model is not always scaleable because of the law. For instance in France, a ventilation, a ceiling above 2,20 m and a surface above 9 m2 in a room are compulsory. That is why EasyHotel offers cheap rooms only in Great Britain, Switzerland and Romania for the moment. According to me, this model is sustainable provided that managers put a clear strategy in place in order to develop this concept all over the world.


To complete this analysis, we can realise a SWOT (Strength, Weakness, Opportunity, Threat) graph to judge the EasyHotel health and know what we would do if we own this business.

STRENGTH:
An innovative concept.

WEAKNESS:
Legislative constraint. “Capsule Hotels” are not allowed in France for example.

OPPORTUNITY:
An obvious demand. This business can surf and use the EasyJet concept.

TREAT:
How to develop this concept all over the world?
How to increase customers?
How to create a growth model for this business?


Managers have to limit themselves strictly to the law and develop a model of capsule room. It would allow them to conquer new countries and improve their branding.

They have to adopt a clear differentiation strategy:
- Create and value a competitive advantage
- Avoid the direct competitors
- Develop a branding