Economics Essay

1231 Words Apr 8th, 2014 5 Pages
1. What was ITC’s motivation for creating the eChoupal?
a. What problems (discuss from a data and process focus) does it address?
With the development of technological revolution, ITC created the eChoupal. ITC supplied Internet access for remote villages. EChoupal was used to assemble and knowledge and share information through websites. There are many motivations for ITC to create the eChoupal.
1. The revenue of IBD was far behind
The First, IBD (the agricultural commodities export division of ITC) was “lagging behind the other divisions of the company” (Upton and Fuller, 2004, p.2). According to the data, IBD grossed $100 million in agricultural commodities sales while ITC’s other divisions such as retail, hospitality, tobacco
…show more content…
For this reason, it is important to use accurate information resources to alter the value chain and optimize its supply chain. On the input side, ITC should use accurate information to forecast weather. ITC used herbicides and pesticides more effectively. Therefore, farmers as suppliers could receive a higher crop yield. ITC had more control over high-quality and high-yield soybean from farmers. On the output side, farmers obtained more information like price to make wise decisions. They had a choice of selling to the middlemen or directly to ITC. Optimizing the supply chain could save transaction costs and benefit all the participants.
3. Farmers had limited capacity for risk
The third, farmers reduced the investment in crops because they were worried about risks such as inclement weather or pests. Farmers did not want to risk new farming methods. For this reason, the crop value was low and farmers’ revenues were low. It is harmful for the development of agriculture in India. The capacity of crops also influenced the ITC’s profits in sales.
Overall, ITC created the eChoupal to increase soybean’s yield and farmers’ profits. The eChoupal would support the free flow of information in order to help ITC optimize its supply chain.
2. What were the old and new physical flows and information flows in the channel, i.e., how does

Related Documents