Emulating the Business Model of Aravind Eye Clinics for Cash Converters

This report focuses on emulating the business model of Aravind Eye Clinics for Cash Converters, a company that buys old electronics goods to refurbish and sell them at low costs. The report provides recommendations relating to the business model of Aravind Eye Clinic to develop the ‘low margin high profit’ business model.

Running head: CREATIVITY BUSINESS WEALTH
Creativity Business Wealth
Name of the Student
Name of the University
Author Note

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Executive Summary
Various social enterprises like Aravind Eye Clinic have devoted their time and resources to help
the poor and backward communities of India by providing them with free eye surgeries and
lenses. The eye surgeries performed by them are low cost yet high quality. Thus, even if the
margin per operation is low, they perform in high volumes to make up for that cost. This report
focusses on this business model to emulate business conditions for Cash Converters, a company
that buys old electronics goods to refurbish and sell them at low costs. Recommendations
relating to the business model of Aravind Eye Clinic will also be provided in this report, which
would further help to develop the ‘low margin high profit’ business model. In conclusion, this
business model generates low revenue at the start of the business period but can challenge any
other aggressive business model in terms of revenue generation in the long run.

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Table of Contents
Introduction..........................................................................................................................4
Discussion............................................................................................................................4
Conclusion...........................................................................................................................6
Reference List:.....................................................................................................................7

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Introduction
In the era of digital technology, most children residing in the developed countries could
afford their own personal computers or even get access to computers on rent basis. There are
many parents living in the rural part of Vietnam who struggle everyday just to put food on the
table for their family. Only some of the well-established families can afford a computer. So
much knowledge is provided on the internet and people with access to those informations will
always be at an advantage. Children can learn a lot more from the computers in their homes and
the underprivileged children will always be at a disadvantage, as they cannot afford computers.
The report is aimed at developing Cash Convertors to utilize the business model of Aravind Eye
Clinics. The case study of Aravind eye Clinics is elaborated in this report and along with the
business model that aims at generating revenue from ‘the bottom of the pyramid’(Prahalad
2016.).
Discussion
Dr. Govindappa Venkataswamy popularly known as Dr. V founded Aravind Eye Clinics
to serve the poor sections of Indian population (Aravind.org 2017). The business model focused
on mass production of products and services while maintaining a low margin of profit. Low
profit margin in turn helped to reduce the overall cost to patients of Aravind Eye Clinics. Dr. V
was emphatic towards the poor people and sought for ways to provide high quality treatments for
cataract at low cost. On using the target costing method, which is a widely used tool in
innovation in the product designing systems, the cost of cataract surgery was reduced drastically.
Doctor V introduced innovation to the underlying surgery techniques that was conventionally
used in other hospitals. This caused the procedure’s time and cost of operation to be reduced
significantly. A key feature of this model is quality assurance. Infection is a major issue in the

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medical sector and quality assurance is important to avoid this issue. Aravind Eye Clinics had
addressed this issue, as the infection rate is lower than any other major hospitals. Efficiency was
achieved by implementing one key surgeon who would perform two operations at a time.
Paramedics performed all the other lesser medical activities related to the surgery. Using this
technique low operating costs were achieved. A huge influx of patients were achieved because
the operations were cheap and safe, and even free for the poor. Thus, the surgeons achieved
efficiency, as they had to perform a huge number of operations annually. The system provided
training to develop the necessary skill set to work efficiently and productively along with setting
up factories to manufacture lenses and deliver them at low costs instead of importing them at
high costs. This cost targeting helped them to serve more and more patients where only the
people who could afford the operations were charged and the rest were treated free of cost yet
they made so much revenue that they could largely expand the eye care facility in a relatively
short period of time (Cooper 2017).
Cash Convertors can apply the same business model to expand their refurbished
electronics goods sales in Vietnam. In 2006, the food poverty line was estimated to be around
6.7% while in 2011 the poverty rate of Vietnam was 12.6% (The United Nations in Viet Nam.
2017). There are many poor and underprivileged families in the Vietnam as is evident from the
statistics. Thus, they can only afford refurbished computers, which can be provided by Cash
Convertors at a low cost. The company can establish a branch office in Vietnam to sell
refurbished electronic goods especially computers to the poor people of Vietnam. Refurbished
goods can be sold at a cheap price as the cost of acquiring old computers is very low and most of
the time those computers can be repaired at very easily. The profit margin would be very low for
each individual computer sold. Hence, in order to generate more revenue, increase in sales

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volume needs to be achieved as seen in the Aravind Eye Clinics’ business model. Old computers
can be recycled and refurbished by either repairing the damage or replacing the damaged part
altogether. The developing countries generate huge amount of computer waste each year. This
waste can be recycled and reused (Sthiannopkao and Wong 2013).There are many computer
parts suppliers who sell cheap spare parts if ordered in huge quantities. Thus, Cash Convertors
can stock up on cheap spare parts and use them when necessary. They can even perform a data
analysis by either hiring an analyst or outsourcing the task to get an informed idea on the type of
spare parts that are generally needed and stock up more of those parts. Cheap labor can be
obtained from the labor market of Vietnam, as the poverty index is high (Coe and Hess 2013).
Training regimens can be created for the people working at the Vietnam branch to make them
accustomed to the technology and for improving their productivity and efficiency. The aim is
minimize the cost of the whole process while maintaining the quality of the original product.
There are various initiatives taken in other parts of the world such as the inexpensive new
computers initiative of Africa that can also be applied in Vietnam (Harris 2015). Rugged low
cost technologies can be provided for sale in huge numbers. Single board computers such as the
Arduino and Raspberry Pi can be used to increase educational computing at affordable prices (Pi
2013). While computers are provided at a cheap rate, the internet companies might not provide
cheap internet. Thus, Cash Convertors might need to better market their products by providing
some free e-learning databases along with their computers. They can even provide trainers free
of cost who can teach the customers the basic applications of a computer.
Conclusion
In conclusion, Cash Convertors can emulate the business model of Aravind Eye Clinics
by establishing a special branch in Vietnam. There they would sell refurbished computers at low

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prices or even give computers away free of cost to those who live below the poverty line and can
never afford a computer in the first place.

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Reference List:
Aravind.org. 2017. Aravind Eye Care System. [online] Available at:
http://www.aravind.org/default/servicescontent/CommunityOutreach [Accessed 30 Nov. 2017].
Coe, N.M. and Hess, M., 2013. Global production networks, labour and
development. Geoforum, 44, pp.4-9.
Cooper, R., 2017. Target costing and value engineering. Routledge.
Harris, J.U., 2015. The Promise, Prospects and Challenges of In-formation Communication
Technology (ICT) Utilization in African Educational Systems: Continental, National and
Institutional Reali-ties. Nwokeafor (Ed.,) Information Communication Technology (ICT)
Integration to Educational Curricula: A New Direction for Africa, pp.99-118.
Pi, R., 2013. Raspberry pi. Raspberry Pi, 1, p.1.
Prahalad, C.K., 2016. The fortune at the bottom of the pyramid: Eradicating poverty through
profits.
Sthiannopkao, S. and Wong, M.H., 2013. Handling e-waste in developed and developing
countries: Initiatives, practices, and consequences. Science of the Total Environment, 463,
pp.1147-1153.
The United Nations in Viet Nam. 2017. Basic Statistics. [online] Available at:
http://www.un.org.vn/en/about-viet-nam/basic-statistics.html [Accessed 30 Nov. 2017]