ABE II

INTUIT INC.:
PROJECT
AGRINOVA
CASE ANALYSIS
Group 5
Althaf Basheer - ABM20029 Apurva Srishty- ABM20045
A Raghunath - ABM20030 Rajesh Mohanty - ABM20054
Jyothish J S - ABM20031 Bidarshi Maji- ABM20002
Saket Jha - ABM20032 Abhijeet Sahoo- ABM20043
Sanjana Khati - ABM20033 Anushka Grover - ABM20036
Shijin P P - ABM20034
 Company Background
Quicken
Intuit is an American software company
founded by Scott Cook in 1983
01 A software program that helped customers
manage their personal finances

Company’s main goal was to provide

potential solutions to unsolved problems.
Quickbooks
Followed a customer driven approach to First accounting software that required no 02
innovation and delivered products that accounting training
"wowed" them.

Intuit’s product portfolio expanded to include

products and solutions for consumers, businesses,
03 and institutions related to income tax, payroll, and
online banking

By 2008, the company had 8,200 employees worldwide; operations across the United States, Canada, the United Kingdom, India,
and other locations; and annual revenues of $3.1 billion and net income of $477 million
NEW BUSINESS OPPORTUNITY
The Indian
Agricultural Market

In April 2005, Intuit set up a research and development center in

Bangalore, India, to develop software products for the company's
core businesses.

The Intuit group wanted to use information Agriculture - 25% of India's GDP
technology and mobile phones to increase the size of farmers’ 60%-70% of employment
information networks and thereby
296 million mobile subscribers in
match market supply and demand more efficiently.
2008

Developed crop price information service

for farmers, code-named AgriNova.
AGRICULTURAL SUPPLY CHAIN TRANSACTIONS
IN A MANDI
FARMERS MIDDLEMEN CUSTOMERS
AUCTION SALES
Farmers share in Wholesalers, Retailers, Food 5% of mandi sales
consumers' rupees is 40% Agents, Distributors Processors, Exporters Agents securing 8-12% commission
Issues with transparency and price
Farmers' Practices Revenue Distribution fixing
65% produce sold in mandis Farmers - 40%, Collusion of Agents in advance to fix
30% produce sold at farm gate to distributors Middlemen - 35%,
floor price
5% sold directly to customers Retailers/Customers - 25%
Agents also took commission from
farmers
In 2007, there were about 6,300 mandis in India, 98% of which Hand touches hidden under a towel,
were regulated to some extent and bids were not called out
At mandis, farmers sold through agents. Agents did not take
ownership of farmers’ produce but rather brokered its sale to
NON-AUCTION SALES
wholesalers, who in turn resold the goods to retailers and other 95% of transactions
customers Farmers leave produce with trusted
Mandis lacked cold storage facilities, and farmers had no choice agents for sale
but to sell perishable goods on the same day Facing potential underpayment and
The government’s Agricultural Produce Marketing Committee exploitation
Agents may report a lower sale price
(APMC) issued licenses to agents and charged them a rental fee
to farmers, pocketing the difference
for mandi store space
 CHOICES AND CONSTRAINTS OF FARMERS

2. WHERE Reasonable distance from more than one mandi

Considerable variation in prices in different
mandis
Farmers had to incur transportation costs

1. WHEN? 3. WHOM

Few days' window for perishables Farmers bound to single agent due to personal loans
Fluctuating prices even within a day Smart farmers were not attached to any agents
Difficulty in predicting prices due to lack of market Some farmers sold directly to distributers at gate
info
Problem Statement
Intuit is evaluating an opportunity to launch a
new venture that would use SMS to deliver
crop price information to farmers in India . They
conducted 5 weeks of extensive research

Agrinova’s team had identified agriculture

as a promising market for new information
systems
There primary research revealed that Indian
farmers were often exploited by agricultural
agents

Agrinova wanted to provide a potential

solution to help farmers increase their
incomes
Main Challenges of Intuit
Would farmers receive tagible financial value from the
service ?

Would the farmers be able to estimate their gains ?

Would agents provide farmers with fair prices ?

Would Intuit be able to handle the operational

challenge of collecting reliable real time information
from multiple markets and agents ?
 SWOT

S Leading Provider: Known for offering leading

financial management solutions.
Legacy and Customer Focus: 25 years of legacy
STRENGTHS with a customer-driven approach.
Industry Demand: Increasing demand within the
agricultural industry.
Research and Development: Significant
investment in R&D.
User Experience: Emphasis on user-friendly
products.
Technology Adoption: Strong penetration and
utilization of technology.
Market Positioning: Advantage of being the first to
offer agent information.
 SWOT

W Expertise Requirements: Need for deep expertise

in agricultural economies.
Agent Numbers: Reliance on a large number of
WEAKNESSES agents.
Operational Issues: Facing certain operational
challenges.
Vendor Management: Intuit staff lacks experience
with managing outside vendors.
Market Expansion: Difficulty in expanding into new
geographical markets.
R&D Costs: Increasing expenditure in R&D.
Farmer Transaction Fees: Uncertainty if farmers
will agree to pay transaction fees.
 SWOT

O Concentrating and exploring on Health

associated products - organic farming
OPPORTUNITIES Expanding markets towards developing
countries like China which increases the
sales
Merger & Acquisitions, joint ventures
decreases the financial risk involved
Exploring new business opportunities in
terms of providing logistical services.
 SWOT

T Return on Investment (ROI)

Lack of transparency in terms of fixing
prices
THREATS Reliable Price data
Street to foot method
Competitors - Technological advantage
may become a neccesity - ITC, Reliance,
Routers etc
Gathering data from farmers - may
overstate the prices
What if agents backoff due to price
consenus among stakeholders
 PORTER 5-FORCES
5-Step Ordering Process

5-Step Ordering Process

Bargaining Power Bargaining Threat of Competitive Threat of New

of Suppliers Power of Buyers Substitutes Rivalry Entrants
HIGH LOW MODERATE MODERATE LOW

To onboard large Project AgriNova Similar products Several free and Project requires
no. of agents and offers unique or could be offered by subscription based significant efforts,
to receive reliable useful information Government agri information managing key
price information with ease that could website and system about mandi stakeholder so
from them could help farmers for emerging crop prices, weather threat of new
be challenging better price technology information already entrants could be
relaization. companies in future exist at some places relatively low.
Evaluation of Alternatives
What to Grow Service

Direct Connection
Between Farmers and
Buyers

Crop Exchange
Marketplace via SMS

SMS-based Crop Price

Information Service
 Objective: Help farmers decide what crops to plant by providing information on
market demand, potential yields, and expected prices.

Benefit Approach Challenges

Enable farmers to make Collect and analyze data on
informed decisions about crop market prices, crop yields, and
selection to maximize regional planting trends to
profitability based on market forecast demand and advise
trends and demand. farmers on the most profitable
crops to grow.
Farmers were unable to make
sense of the information.
"500 other farmers will grow
potatoes in your region" - Farmers
could not understand if that was
too much or too little
 Objective: Facilitate direct transactions between farmers and buyers without
middlemen, using SMS for communication.

Benefit Approach Challenges

Potentially higher incomes for Create a platform for farmers Resistance from established
farmers by eliminating agent to list their produce and for middlemen and the difficulty of
commissions and improving buyers to make direct ensuring critical mass for platform
price transparency. purchases. viability.
 Objective: Establish an SMS-based marketplace for transparent auctioning of
crops, where farmers list produce and agents/buyers bid..

Benefit Approach Challenges

Empower farmers with the
ability to get the best prices
for their crops through
competitive bidding.
Develop a system allowing for
the easy listing of produce by
farmers and bidding by buyers,
all conducted via SMS.
Reluctance of agents to
participate due to inability to
inspect crop quality electronically
and operational hurdles in auction
management.
 Objective: Provide farmers with fair market price information and agent contact
details via SMS.

Benefit Approach Challenges

Increase transparency in crop Collect market price data from Ensuring the reliability of data
pricing, helping farmers avoid agents and disseminate it to provided by agents and
exploitation by middlemen. farmers, enhancing their operational complexity of real-
negotiating power. time information dissemination.
Financial Analysis
Would farmers pay extra for How much would it cost
subscription or transaction fee? AgriNova to acquire users?

Assuming 90 villages, 30 Mandis & average of 50 agents per Mandi, target to be 20 agents/Mandi onboarded in 1st year with 3 seasons.
And 7 paise and 22 paise for sms and call/minute
Charging Rs. 15/ farmer/season from an agent on a successful transaction
15*(50*3*20*30) = 13,50,000
Expenses:
SMS: 50*20*30* (12*20*1*.07) = 5,04,000
Call: 50*20*30* (12*10*1.5*.22) = 11,88,000
Employee(5) salary: (10,000 approx) = 6,00,000
Total Expenses = 22,92,000
Unable to break even in first year. With new farmers and agents onboarded, the revenue will
increase with comparatively low impact on expenses. Onboarding 30-32 agents/mandi and 60
farmers/agent would be needed to break even in first year.
Other assumptions: Every agent has unique set of farmers onboard. All farmers are selling through agents
Financial Analysis
User Acquisition Cost
SMS Costing: 16.8
Call: 39.6
Human Resources: 12
Total Cost = 68.4/farmer

Revenue Through Ads

ADs through SMS will increase the overall SMS cost and the revenue from ADs will
depend on internet penetration in the area to analyze CTR
Onboarding local brands and partners to advertise their offerings through text.
Public service announcements, local news update are additional sources.
 RECOMMENDATIONS
-Clearly articulate AgriNova's benefits for farmers, emphasizing improved
price transparency and market access.
-Collaborate with agricultural agents, cooperatives, and mobile carriers
to enhance data reliability and market penetration.
-Develop incentives for agents to provide reliable price data, fostering
trust and credibility among farmers.
-Explore subscription fees, transaction charges, and targeted advertising
to ensure sustainability and profitability.
-Strengthen capabilities in data collection, customer support, and vendor
management for seamless service delivery.
-Evaluate the results and effects in terms of
1)Number of farmers willing to get onboarded
2)Number of farmers actually getting tangible benefits
3)Retention of agents
4)Percentage increase in agents onboarded Year-on-year
 CONCLUSION

The Agrinova project has
first mover advantage when
it comes to sharing prices
of nearby mandis this will
be hugely beneficial for the
farmers.
If farmers are provided with
better prices compared to
whatever they were getting
through agents many farmers
will switch to Agrinova as this
will shift bargaining power to
farmers.
For reliable price data they
should not just stick to
agents but also get their
team on ground to know
about the real prices and
how prices are fluctuating
When more and more agents
will benefit from Agrinova and
earn reasonably good
revenue through increase in
transaction many other
agents will join.

Manager Business Manager

FIRST MOVER COMPENSATION ON GROUND
Head EFFORTS NETWORK EFFECT
THANK
YOU