2. A Alkandari / Application of the six forces model by Porter on a non-profit industry, Rahma International: A Case Study
24
become the best charity organization (Rahma
International, 2010).
Rahma International organization has offices in more
than forty countries around the world to support and aid
the less fortunate people. The non-profit organization
has sponsored more than 4, 000 thousand orphans,
established more than 4219 mosques and Islamic
centers, drilled more than 10,000 wells of different
kinds and supported more than 7712 job training
projects. It also has established more than 2120
accommodation residences for the homeless,
established more than 210 medical facilities including
clinics, hospitals and medical centers and established
more than 120 schools and educational centers
worldwide.
Based on the background information, it is apparent
that Rahma International has spread its efforts across
many different countries and projects, which in turn
have attracted the major focus of the employment of
capital of the organization. The failure to consider the
importance of the development of relational capital
through a range of strategies including marketing has
meant that the organization has not been able to be
considered as a major organization in the global
industry. The organization needs to address this issue
strategically in order that it can attract more funding
and so that it can become more clearly positioned in a
highly fragmented industry populated by many
organizations.
Situation Analysis
One of the effective situation analysis tools for non-
profit organizations is the non-profit Industry Analysis
Six Force Chart (Centre for Nonprofit Excellence,
2007). The six forces model uses Porter’s (1980) five
forces model as a framework and modifies it to the
special characteristics of the non-profit industry (Oster,
1995). The model is illustrated in Figure One:
Figure1. Six Force Chart (Source: Oster, 1995, p.30 ).
Threat of New
Entrants
User Group
Funding Group
Supplier Relations Among
existing Organizations
New Substitutes
3. Proceeding of the 3rd International Conference on Marketing, Vol. 3, 2015, pp. 23-29
25
Relations Among Existing Organisations
The competition for donations in the non-profit sector is
highly competitive as the need is large and resources
are finite (Thornton, 2006; Yarenka, 2007). However in
the delivery of services often there is co-operation
(Dolnicar, Irvine and Lazarevski, 2008). In times of
crises this level of co-operation increases considerably
with the input from a range of non-profit organisations
being co-ordinated by organisations such as the Red
Cross. Organisations with a high public profile and a
strong government lobby are more likely to be more
competitive for the finite source of funds than smaller
organisations. Overall the level of rivalry between non-
profit organisations should be considered to be modest.
Threat of New Entrants
The barrier to entry of new non-profit organisations is
very low. New non-profit organisations are likely to
originate from a negotiated source of funding and will
often be targeted towards a specific area of need that
has not be dealt with in detail because of the more
holistic foci of large non-profits like Rahma
International. In effect, the inability of global non-
profits to be all things to all people open the door for
smaller non-profits to enter the market and service the
need of a specific group of people. In order to protect
itself from new entrants, a non-profit organisation must
value the importance of the development of its
reputation in the market place. This creation of a strong
brand has not been given the attention that is warranted
by Rahma International. Without a high profile in the
industry built on its reputation, the organisation may
struggle to become a significant global player in the
industry. Having a globally recognised reputation will
enable the organisation to garner a higher level of donor
support from governments, businesses and individuals.
Substitutes
The substitutes in this context are all the revenue
sourcing channels that are leveraged by organisations in
order to access the component of disposable income
that people and companies are willing to allocate to
charities. In this area the reputation of a company can
play an important role. In order to sustain its operation,
a non-profit organisation must work hard on promoting
its reputation and informing the public on its reach
(Dolnicar and Lazarevski, 2009). Public and private
entities want to be associated with organisations that are
effective. Rahma International is involved in the
collection of donations from governments, businesses
and individuals.
The religious requirement of the Muslim faith for the
donation is 2.5% named (zakat), zakat is the third pillar
in Islam (Dhar,2013). This is annual charity given by
Muslims,where Muslims should calculate their capital
after meeting families need's(Dhar,2013). This charity
is given to the poor and needy by the funding groups in
the organisation. In order to sustain and grow this
source, the organisation must work hard on building its
reputation.
User and donor group
The level of need in the international community is
extremely high and the capability of an organisation to
meet that need is determined by its ability to attract
funding. These two groups are not concentrated for
Rahma International. They are spread out across the
Muslim world and in global areas of need. This lack of
concentration means that the user and donor groups do
not exert a high level of control over the organisation.
This can create a problem in that the highly fragmented
approach of the organisation can mean that it is difficult
to build a coherent and consistent image in the
marketplace. There may be benefits for Rahma
International deciding that a core focus of its efforts
will be in a specific area, such as child health, where
the major component of donors money can be directed
and where long term improvements can be leveraged to
demonstrate the effectiveness of the organisation.
Supplier
The suppliers for Rahma International are the
organisations that provide the materials and services
that are utilised to improve the life of those in need. The
large number of suppliers and the community focus of
Rahma International can mean that the organisation can
4. A Alkandari / Application of the six forces model by Porter on a non-profit industry, Rahma International: A Case Study
26
leverage corporate social responsibility to access
materials and services below the market rate. The
service orientation of the Muslim religion can meant
that the organisation is able to consider the leveraging
of extensive volunteer networks to meet identified need.
In doing this the organisation is able to do more with
less.
Summary
The use of the six forces schema for analysing the
situation has revealed that key to the sustainability,
growth and success of Rahma International, is that there
is a need to look at strategies that develop the
relationship capital of the organisation and grow its
reputation in the international community. Compared to
other global non-profits such as Red Cross, Oxfam and
Green Peace, the community awareness of Rahma
International is low. Given that the situation analysis
identified that the organisation needs to advance its
reputation as protection from the dynamic nature of the
industry, the next section identifies the strategies and
approaches that the organisation needs to use.
Strategic Orientation
Intelectual capital
Non-profits must become more commercial in their
orientation if they are to be competitive and meet the
challenges raised in the situation analysis (Andreasen
and Kotler, 2008). Key to this is the capability of the
organisation to have a clear understanding as to who the
customer is (Gonzalez, Vijande and Casielles, 2002).
The non-profit sector with its focus on the provision of
services and meeting the needs of people are not suited
to the implementation of for-profit strategies
(Alexander, 2000; Paton, Foot and Payne, 2000). The
selection of strategic management approaches and the
development of effective marketing strategies for the
non-profit sector is an area requiring increased attention
(Kong, 2008). Without guidance on strategies that are
suited to the sector, there is a real risk that the
humanitarian orientation of the organisation may
become compromised by a commercial orientation.
This commercial orientation might distance the
organisation from its donors and from the groups in
society that it is servicing.
In response to this challenge, Kong (2008) recommends
the development of key intellectual capital performance
indicators that can orientate the strategic direction of
the organisation. An intellectual capital orientation is
founded on the development of strong customer
relationships that Bontis (1998) termed relational
capital. Relational capital involves the formal and
informal relationships that the organisation has with its
external stakeholders. The improved management of
these relationships has a multiplying effect increasing
the effectiveness of the organisation (Ordonez de
Pablos, 2004). There is a lack of marketing capital in
the intellectual capital of the organisation and this
means that the organisation has not been effective in the
development and promotion of its reputation.
Branding
Rahma International lacks a clear brand image in the
market place. Global non-profits that have developed a
global identity such as Amnesty International and the
Red Cross have been successful in building a brand.
The building of a brand image precedes the
development of reputation in the market place.
Leveraging intellectual capital to promote the social
goals of the organisation and to enhance the reputation
of the organisation acts to improve the capabilities of
the non-profit to manage the issues identified in the
situation analysis (Kylander and Stone, 2012).
Although Rahma International has directed the majority
of its intellectual capital to the improvement of the
lifestyle of those in need, the organisation has
overlooked the application of intellectual capital to the
advancement of its own reputation.
The benefits of creating a brand image and developing
a truly global identity will be the reduced barriers faced
by the organisation in attracting funding and the
elevation of the role that the organisation will play in
changing the social, economic and political agendas
that are contributors to the situation. The creation of a
global identity through brand marketing can increase
the impact of Rahma International. Research by
5. Proceeding of the 3rd International Conference on Marketing, Vol. 3, 2015, pp. 13-29
27
Kylander and Stone (2012) indicates that the new
approach to global branding for non-profits should be
centred in using image strategically to build the
operational capability of the organisation, attracting
support and highlighting the core mission of the
organisation.
In order to generate a focused brand image, the
organisation needs to introduce a less fragmented
approach to its delivery of services. The effect of this is
to fragment the global brand identity of the
organisation. This fragmentation means that the
organisation faces difficulty in providing a consistent
and coherent image to the market place. Without
detracting from the organisation’s will to provide a
broad range of projects that meet identified need, the
organisation could benefit from having global strategy
that targets a specific issue such as the improvement of
infant care in disadvantaged communities. The focus
that this might provide to the organisation would enable
the creation of a more coherent brand identity than the
fragmented services that the organisation currently
delivers. In this way the brand can work to build
cohesion for the organisation.
Building reputation through marketing
Reputation has been identified as the key to the
strategic protection of the organisation from declining
resources, increasing costs and an expanding number of
organisations competing for a share of the available
resources. Enhancement and promotion of the
reputation of the organisation in the market place
enhances the relationship capital of the organisation
(Dolnicar and Lazarevski, 2009). The promotion of the
organisation through web-sites, social media, video and
film, corporate events and news events raises the
awareness of the actions that the organisation is
involved in and the meaningful outcomes of those
interactions. By focusing on a single cause that drives
the actions of the organisation, Rahma International is
able to leverage cause related marketing to grow its
reputation.
Cause related marketing (CRM) seeks to stress the
commitment that an organisation has made to a social
issue. The use of CRM can be an important means of
enhancing the reputation of the organisation, increasing
participation and fostering strong commitment that can
ensure the sustainability of the organisation (Broderick,
Jogi, & Garry, 2003). The marketing strategy develops
the awareness of the outcomes of the organisation in the
minds of the organisation’s current and potential
stakeholders. The marketing is focused on highlighting
the link between the contribution that is made and the
outcomes that are made. An effective CRM can result
in an increase in the level of funds attracted to the
organisation and elevate the level of media attention
that the organisation receives (Cone, Feldman and
DaSilva, 2003). The research of Cone, Feldman and
DaSilva (2003) found that CRM is not effective for
non-profits seeking to repair a damaged reputation. This
is not the situation for Rahma International where there
is simply a low level of brand awareness of the
organisation in the marketplace. Cone, Feldman and
DaSilva (2003) found that CRM is highly effective in
the building of a strong brand reputation.
An effective CRM focuses on the outcomes and the
social changes that have occurred as a consequence of
the actions of the organisation. This shift in focus to the
outcomes directs the attention of the stakeholders away
from seeking donations to developing a brand image
that links the logo and name of the organisation with
social change. The linkages formed in the mind of the
stakeholder can trigger social conscience and create a
link with the issues that are important in the mind of
those in the donor group to the organisation. This acts
to make the organisation an organisation of first choice
when the government, business or individual is seeking
to align itself with an organisation that is achieving
social change. The strengthening of the brand
reputation will aid the organisation in attracting
volunteers and favourable terms for the merchandise
that the organisation needs in order to improve the
social situation of those in need. This translates into a
strengthening of the relationship capital that will also
improve the operational efficiency and effectiveness of
the organisation.
Conclusion and Recommendations
The use of the six forces table for analysing the industry
that Rahma International operates in revealed that the
6. A Alkandari / Application of the six forces model by Porter on a non-profit industry, Rahma International: A Case Study
28
organisation will face an environment of increasing
competition for static or declining resources to meet
ever increasing needs. The close analysis of this
situation revealed that the organisation can protect itself
from these forces and improve its sustainability by
looking towards improving its relationship capital.
Currently Rahma International has been very
fragmented in its approach to meeting those in need and
has given minimal attention to the building of its
reputation in order to be more effective and efficient.
The report has arrived at a set of recommendations that
the organisation needs to implement in order to build a
brand and enhance its reputation in the global
community. The recommendations are:
Seek a focused cause such as the
improvement of infant health that is the
primary focus of the actions of the
organisation;
Develop key relationship performance
indicators that will inform the strategic
action of the organisation;
Seek to build and strengthen the relationship
that the organisation has with its
stakeholders;
Employ or engage marketing capital for the
development and promotion of the brand
image of the organisation;
Engage in cause related marketing that
promotes and builds the reputation of the
organisation in the international
community;
Leverage news channels, social media,
visual media and web technologies to
achieve this.
Understanding and applying these recommendations
will enable Rahma International become the global
charitable body it aims to be.
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