G-Auto Business Model: Diversifying and Sustaining Under Duress

Abstract

This case traces the evolutionary and competitive challenges faced by Nirmal Kumar (Kumar), a social entrepreneur, in the process of diversifying and sustaining a fledgling corporation. Kumar, an MBA graduate from Indian Institute of Management Ahmedabad, Gujarat, was severely ill-treated by an auto rickshaw driver when he refused to yield to unfair price demand. That traumatic experience and the risk it posed to the vulnerable section of the society, motivated him to search for a solution. He found that overcharging was not endemic to all auto drivers. With his own limited resources, he started organizing the good auto drivers, leveraging his prior experience in procuring external unencumbered funding. He articulated well-defined value propositions to the stakeholders and created G-Auto. G-Auto proved to be a safe and efficient para-transit alternative. He obtained politico-regulatory and financial support to expand and standardize the operating model across other cities of Gujarat. Within a couple of years, he had organized around 10,000 auto drivers under the G-Auto banner. He further differentiated the service according to specific needs. He arranged training for the drivers and designated them as G-Auto Pilots to enhance their dignity. He further leveraged the auto network to diversify into the under-skilled job market and the fruit and vegetable supply chain and attempted to give a corporate form to his diversified ventures. In the process, the basic stewardship character of his initiative appeared to be compromised, besides drawing unwanted attention from competitors coupled with threats and violence to him and his auto-pilots. With waning stewardship characteristics, would Kumar be able to grow and sustain his initiatives? Would he be able to command the same goodwill trust from his old and new stakeholders? If not, how would he sustain his existing and new initiatives all on his own?