When Development Met Market: A Study on Creating Shared Value Strategy of Public-Private Partnership for International Development

Abstract

This study pays attention to the two different sectors' movements: International development and market. Discussions in the area of international development has been moving towards embracing market and for-profit sector, while more and more scholars and players in for-profit sector have been placing emphasis on social impact. Both of the movements are innovative and unconventional movement against traditional realm of each sector. International development has begun to adopt marketized principles of efficiency and effectiveness. As the efficiency and effectiveness are at the core of business sector, developmental organizations and governments need to benchmark market's practices and strategies. On the other hand, since social value has not been treated as a core of business sector, recent emphasis on the social responsibilities of firms as a member of society and on innovative and alternative business strategy of creating shared value has widened opportunities of partnerships between for-profit sector and public or non-profit sector. The representative efforts of the trends are observed in stressing public-private partnership in development area and creating shared value in business sector. In the analytical frame of modified Hybrid spectrum of organizations, the two concepts from different sectors can be placed at the middle. That is, the two different sectors can exchange each party's strategies at some point. Taking this as the premise of analysis, this thesis analyzes three successful public-private partnership cases in the frame of creating shared value strategies. The three cases represent each of the strategies for companies to creating shared value suggested by Porter and Kramer. First case is the partnership of Vodafone and DFID, which introduced innovative mobile banking model in Kenya and developing countries. By taking first strategy of reconceiving products and market, the business model have provided Vodafone new revenue sources with first-mover advantage in new markets, while enabling the unbanked population in the country to have access to financial service, thereby enhancing welfare of the residents significantly. Second case is the case of Cocoa Partnership which is an alliance of many development organizations and Mondelez International. The partnership was initiated by Mondelez International to strengthen their supply of cocoa from Ghana in their value chain. Due to the initiatives of the partnership, productivity of cocoa which is critical to the nation's economy and fundamental competitiveness of the company have been dramatically enhanced. The last case is about cluster building. After decades of efforts in Kenya, small and medium size social enterprises producing biomass cooking stoves have emerged. The Market Transformation for Highly Efficient Biomass Stoves for Institutions and Medium-Scale Enterprises in Kenya including these enterprises and the United Nations Development Plan have maximized the impact of the innovative biomass stoves that can contribute to the welfare of the whole community and especially women through strengthening the cluster of existing business model.