Vietnam has a rice problem. While the country is one of the world’s largest exporters of rice, the rice production process creates unwanted byproducts in the form of rice straw. Rice straw has typically been dealt with by burning it, which creates significant environmental and health issues. Sensing the opportunity to utilize rice straw as a resource, rather than turn it into a nuisance, Trang Tran founded Fargreen, a for-profit social venture. Fargreen aimed to change the practice of burning excess rice straw by creating a market solution to incentivize utilizing the straw to grow gourmet, branded mushrooms. In addition to remedying the pollution problem, it created additional off-cycle income for rice farmers. The case begins in the first six months of Fargreen’s operations. It addresses common issues faced by new social ventures, such as integrating the venture’s social mission into its strategic decisions; potential tradeoffs that can arise while attempting to balance social and financial gain; and addresses the challenges that can occur when using entrepreneurial approaches to start a firm within a communist country that is just beginning to liberalize its economy.
East Meets West: Growing a For-Profit Social Venture in Vietnam
by: Asad Aziz, Yolanda Sarason
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After reading and discussing the material, students should:
- Identify the unique cultural, political and economic factors of a country or region and their potential impact on the formation and operations of a social venture in that location.
- Analyze the business model of a social venture, identifying sources of value creation and value capture.
- Develop criteria by which to evaluate tradeoffs between financial and social objectives in a social enterprise.
- Form a strategic recommendation for a social enterprise that is consistent with the organization’s social mission and facilitates financial growth.