Embedded Files
Pattern description
Pattern description
The same product or service is provided to ‘the rich’ at a much higher price than to ‘the poor’. Thus, the main bulk of profits are generated from the wealthy customer base. Serving ‘the poor’ is not profitable per se, but creates economies of scale, which other providers cannot achieve. Additionally, it has a positive effect on the company's image.
Inventive problems
Inventive problems
The product price should be high in order to get the maximum revenue.
The product price should be low in order to increase the number of customers.
The product should be targeted at a small group of customers in order to fully meet the needs of customers.
The product should be targeted at a large group of customers in order to attract more buyers and get the maximum revenue.
Application examples
Application examples
Warby Parker is an American provider of eyewear (prescription eyeglasses and sunglasses) that employs the Robin Hood business model to provide high-quality glasses to its customers, while also helping needy or impoverished people to obtain glasses. For every pair of glasses sold in the developed world, Warby Parker directs a proportion of the revenue to non-profit partners such as VisionSpring. Warby Parker’s partners also support personnel training and manufacture in developing countries. As a predominantly online company, Warby Parker is able to reduce overheads and bypass optical retailers to provide glasses at lower costs, thus increasing revenue and donations to its partners.
The One Laptop per Child (OLPC) initiative also successfully uses the Robin Hood business model. Founded in 2005, OLPC is a Miami-based non-profit organisation that provides children in developing countries with inexpensive XO-1 laptop computers for educational purposes. It evolved as a result of an education research project led by MIT professor Nicholas Negroponte, aiming to provide children in lower-income countries access to knowledge, information and modern communication tools to help them build a better future. The XO-1 laptop is the OLPC initiative’s centrepiece. It costs a mere US $100 to make and was developed specifically for use in schools in lower-income countries. To distribute its laptops across the globe rapidly, OLPC uses the Give 1 Get 1 programme. The plan was for consumers in the USA and Canada to receive an XO-1 laptop by donating US $399 (plus shipping) and, in return, a similar laptop was sent to a child in a developing country.
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