Sanergy: Sustainable Sanitation




Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

Abstract

The global sanitation crisis attracted the attention of several regional, national, and international organizations which tried to address the issue in their own way. However, the statistics reveal that nothing much had been done at ground level. About 2.6 billion people lacked access to decent sanitation facilities across the globe, more than 2 million people including 1.5 million children died every year only from diarrheal disease. The loss caused to individuals, economies, and environment in developing and underdeveloped world was far more than these statistics revealed.

Kenya had become a hub of slums with more than 8 million living in the urban slums in the country. Moreover, more than half of the country’s urban population was living in slums, relying on unsanitary options. Since there were no affordable toilets in these slums, people in these areas relieved themselves either by using pit latrines or by defecating in plastic bags (called flying toilets). The result was environment pollution. The communal toilets that existed were often the scenes of crime, with many of these crimes targeting women. Also the pit latrines were a source of danger to children, with many falling in and dying. To rescue the urban slums of Kenya from the sanitation crisis, three Massachusetts Institute of Technology (MIT) graduates — David Auerbach, Lindsay Stradley, and Ani Vallabhaneni — developed a business model which had a non-profit wing to address the issue of inadequate sanitation and a for-profit arm to generate revenues. The company, Sanergy, was launched after a feasibility study was conducted and the possibilities were explored in great depth. Sanergy picked two slums of Nairobi, Kibera and Mukuru, to start with and applied its business model, which included a vertically integrated waste management system divided into five parts: build, franchise, collect, convert, and transfer. The company manufactured toilets which were franchised to the local entrepreneurs of the slums...

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Issues

The case is structured to achieve the following teaching objectives:

  • The inception of a social enterprise by social entrepreneurs.
  • The choices made by a social entrepreneur to build the organization to pursue aggressive goals and decide the business model — to go in for a non-profit or a for profit setup or a hybrid model
  • Funding of a social enterprise
  • The business model developed by the company to address its dual goal. Details of the business model including manufacturing Fresh Life Toilets (FLTs), franchising them to local micro entrepreneurs, collecting and processing the waste into fertilizers and electricity.
  • Application of sustainability models — the triple bottom line in any business setup. Sanergy covered three spheres of sustainability — economic, social, and environmental.
  • Acquiring funds to run the business and ensure sustainable development in the long run.
  • Various problems and challenges faced by social entrepreneurs and their businesses.

Contents
INTRODUCTION
SANITATION CRISIS IN KENYA
SANERGY – THE INCEPTION
A SUSTAINABLE BUSINESS MODEL
A WIN-WIN VENTURE
THE IMPACT
SCALING UP
THE CHALLENGES
A TOUGH ROAD AHEAD?
EXHIBITS

Keywords

Sanergy,Kenya,Sanitation Crisis,Social Entrepreneurship,Social Enterprise,Hybrid model,Micro entrepreneurs,Sustainability models,Sustainable development,Developing countries,Social innovation,Business model innovation,Social impact,Scaling up

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