Iran Kandelous 2011 - Growing Inclusive Markets

PHYSICAL INFRASTRUCTUREThe company started to operate in a remote area which was isolated from major urban centers.During the early construction phases, it was very difficult to establish the working site since therewas no infrastructure to provide accommodation, technical services and office space forengineers, experts and craftsmen coming from the city. There was no road, hotel or restaurant andthe company had to build all of this from scratch.LACK OF KNOWLEDGEBusiness activities in the region influenced the physical, social and cultural environment of thevillage. As a result, some of the conservative members of the community had concerns regardingthese activities. They were worried that expanding business and attracting urban visitors mayharm the tranquil originality of the environment. This is a challenge for many businesses startingtheir activities in isolated and intact areas.ACCESS TO FINANCIAL RESOURCESFinance is a challenge which has continued till now. Financing is a common problem for most ofIranian entrepreneurial ventures. Due to the lack of venture capital and risk-taking financialinstitutions, the companies have to rely on the conventional banking system, which is reluctant tofinance such entrepreneurial activities. The banks usually ask for high-value collateral which maymultiply the value of the requested loan. Relying on government assistance could be analternative but is not easily available.Actions to Remove BarriersINVEST IN REMOVING CONSTRAINTSThe seed money for Kandalous came from the personal wealth of the founder. In 1980 he hadfounded a chemical company which became a popular brand and a successful producer ofdetergents in Iran. The money generated through this business activity was used later to financethe investments needed for starting Kandelous Group.COMBINE RESOURCES AND CAPABILITIES WITH OTHERSCurrently, the company seeks foreign investors to acquire necessary funds for its expansion plans.This way, the interests of two parties are aligned for a joint activity. The investors realize theirprofit and the company can expand its social and productive activities.LEVERAGE THE STRENGTH OF THE POORFrom the beginning the company used the local labour in the region to collect herbs, bushes andleaves. This is a way to capitalize on cheap labour to produce herbal products in a competitiveway. In parallel, it provided them on the job training to build new skills. The local communityalso contributed in building infrastructure and helped the company to build its facilities.Case Study ● Kandelous Agro-Industry Group 12