Navigating an eternal ocean – EnerGaia’s emergent strategy in the market for Spirulina

• Main Authors: SCHILLEBEECKX, Simon J.D., MERRILL, Ryan Knowles
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2019
• Subjects: Commercialisation; Social entrepreneurship; Social enterprise; Fund raising; Growth strategy; Resource-based strategy; Entrepreneurial and Small Business Operations; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/cases_coll_all/259; https://smu-my.sharepoint.com/personal/chiweichan_smu_edu_sg/_layouts/15/onedrive.aspx?listurl=https://smu.sharepoint.com/sites/admin/CMP&id=/sites/admin/CMP/cases/SMU-19-BATCH [PDF-Pic]/SMU-19-0008 [Energaia]/SMU-19-0008 [Energaia].pdf&parent=/sites/admin/CMP/cases/SMU-19-BATCH [PDF-Pic]/SMU-19-0008 [Energaia]
• Institution: Singapore Management University

The case follows the evolution of EnerGaia, a technology firm pioneering rooftop production of spirulina (blue-green algae) in developing markets. The narrative and discussion questions focus on the strategic choices of the CEO, Saumil Shah. Core questions regard Saumil’s options for positioning his company within the value chain and the trade-offs he faces in pursuing a mid-end market in Europe for dry spirulina powder versus lower cost spirulina in the developing markets of Asia. The case describes how Saumil leverages reputation to obtain resources. EnerGaia wins various awards from development organisations (Blue Ocean, USAID) that love its mission to help the poor with a new farming system. A social mission also helps attract quality interns and biologists. A challenge of these financial and reputational influxes is that they enable the firm to continue without necessarily becoming profitable and that they may risk pushing the firm in a specific direction that may not be sustainable in the long-run. Now the firm may appear to be “going corporate”, deviating from its roots and “springboarding” on the reputational advantages of a socially-oriented start-up model to become a profit-seeking biotech firm. In identifying and realising an emergent strategy, Saumil and his staff must wrestle with sustaining a consistent identity, allocating scarce resources, and building scalable processes. The case concludes by asking which direction its CEO should take for 2018: should he continue working towards developing markets in multiple countries while chasing development grant money as a social enterprise, or should he focus on commercial partnerships? Also, while working with his scientists, should the CEO continue his pursuit of an Eternal Ocean breakthrough to empower scaling of the EnerGaia solution across rural landscapes, or should he focus on pioneering farm-scale organics to supply high-priced spirulina (and the tech to produce it) to a rapidly growing European market?