How does your organisation stay competitive

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Strategies for competitive advantage in charities and non-profits

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  • 06/02/09
  • 06/02/09
  • 06/02/09
  • 06/02/09
  • How does your organisation stay competitive

    1. 1. nfpSynergy Summer Insights Wednesday 16 th June 2010 20 Cavendish Square
    2. 2. How does your organisation stay competitive? Joe Saxton
    3. 3. How is competition different between for-profits and non-profits?
    4. 4. Structure of for-profit and non-profit organisations Provision of goods and services Income greater than costs Profit For-profit Non-profit Income greater than costs Profit Provision of services
    5. 5. <ul><li>Influence of external world and rapid change </li></ul><ul><li>Focused strategy </li></ul><ul><li>Responsive and adaptable to change </li></ul><ul><li>Excellent people </li></ul><ul><li>Excellent funding </li></ul>The inside world The outside world The specific competitive arena <ul><li>Your culture, strategy and competences </li></ul>What factors influence competition and your organisation ability to succeed
    6. 6. How do charities say they stay competitive?
    7. 7. Strategies for maintaining a competitive advantage Organisations earning less than £500k “ Which of the three following strategies do you believe are the most important in maintaining a competitive advantage for your organisation?” Base: 38 people Source: How does your organisation try to get a competitive advantage? nfpSynergy Feb 2010
    8. 8. Base: 56 people Source: How does your organisation try to get a competitive advantage? nfpSynergy Feb 2010 Strategies for maintaining a competitive advantage Organisations earning between £500k and £5 million “ Which of the three following strategies do you believe are the most important in maintaining a competitive advantage for your organisation?”
    9. 9. Base: 58 people Source: How does your organisation try to get a competitive advantage? nfpSynergy Feb 2010 “ Which of the three following strategies do you believe are the most important in maintaining a competitive advantage for your organisation?” Strategies for maintaining a competitive advantage Organisations £5 million +
    10. 10. How does your organisation try to get a competitive advantage? Strategies for maintaining a competitive advantage under all categories “ Which of the three following strategies do you believe are the most important in maintaining a competitive advantage for your organisation?” Base: 170 people Source: How does your organisation try to get a competitive advantage? nfpSynergy Feb 2010
    11. 11. The research from 1994
    12. 12. How can organisations measure their competitive position? <ul><li>Media mentions </li></ul><ul><li>Awareness </li></ul><ul><li>Search engine results </li></ul><ul><li>Voluntary income growth </li></ul>
    13. 13. Number of media mentions per month Nov 2009 – March 2010
    14. 14. Number of media mentions per month Nov 2009 – March 2010
    15. 15. Google and Bing search Number of hits
    16. 16. Spontaneous awareness of certain charities
    17. 17. Growth patterns of development charities since 1980 Vol Income £ ,000s Year
    18. 18. Measuring your competitive position <ul><li>Media mentions, awareness, search engine results and growth patterns are only suggestions </li></ul><ul><li>Our forthcoming fundraising benchmark – released July 6 will provide another way to compare yourself with other charities </li></ul><ul><li>All our monitors help organisations understand how their compare with their peers </li></ul><ul><li>But each organisation needs to decide for itself what measures make sense </li></ul><ul><ul><li>Number of applicants per job </li></ul></ul><ul><ul><li>Staff turnover rate </li></ul></ul><ul><ul><li>Success rate in tenders </li></ul></ul><ul><ul><li>Direct marketing response rates </li></ul></ul><ul><ul><li>And many more </li></ul></ul>
    19. 19. But the outside world is changing too
    20. 20. Budget deficit Public Sector Net Borrowing as a percentage of GDP Base: UK Source: HM Treasury/nVision
    21. 21. Declining Voter Turnout As percentage of the UK electorate Base: UK electorate Source: British Electoral Facts: 1832-2006, Parliamentary Research Services, House of Commons Library data
    22. 22. Type of household in England Trend and forecast, 2006-based projection Base: UK 2005 Source: Social Trends, National Statistics/nVision
    23. 23. Age structure of the UK population Number of people and proportion of total UK population of each age, 2009 projection Base: UK Source: National Statistics/nVision
    24. 24. International migration Number of people moving into and out from the UK, in thousands Base: UK Source: International Migration, National Statistics/nVision
    25. 25. Household disposable income growth Total increase from 1980 in real terms – January 2010 nVision forecast Base: UK Source: National Statistics/nVision
    26. 26. Proportion who have internet access By age, gender and social grade “ Personally, do you have internet access…At home; At work; At school/college, none of these?” Base: 1,200 respondents aged 15+, GB Source: nVision
    27. 27. Participation in social networking websites As percentage of total population, by gender, age and social grade “ Which of the following, if any, have you done on the internet in the last 6 months…? Created / updated a personal profile on a social networking site (e.g. facebook / myspace / bebo)” Base: 1,200 respondents aged 15+, GB Source: nVision Research
    28. 28. Volume of SMS messages on UK cellular networks among the four main operators In millions Base: UK Source: OFCOM/nVision
    29. 29. But what does the changing external world have to do with competition? <ul><li>Other organisations may become more adept at dealing with the new world </li></ul><ul><li>Existing stakeholders may become more distant or more engaged as a result of the changing world </li></ul><ul><li>New stakeholder groups may become important </li></ul><ul><li>Older/younger/rich/poorer may change their outlook in a changing world – so the old ways of communications will no longer work as well </li></ul>
    30. 30. Awareness and communication strategies
    31. 31. What does a generic strategy need to do? <ul><li>Provide a framework for all of the marketing and communications </li></ul><ul><li>Act as an architect’s plan, not a builder’s toolkit </li></ul><ul><li>Allow the entire organisation to understand how competitive advantage will be achieved </li></ul><ul><li>Not specifically about service provision </li></ul>
    32. 32. Four strategies <ul><li>NICHE </li></ul><ul><li>EXTERNALLY/FUNDING-DRIVEN </li></ul><ul><li>DIFFERENTIATION </li></ul><ul><li>AWARENESS </li></ul>
    33. 33. Four strategies <ul><li>Niche </li></ul><ul><li>Externally/Funding-Driven </li></ul><ul><li>Differentiation </li></ul><ul><li>Awareness </li></ul>
    34. 34. Niches <ul><li>Differentiation based on the actual work of the charity </li></ul><ul><li>Work can also be done by larger charities </li></ul><ul><li>Single mindedness is the key </li></ul><ul><li>Use PR and fundraising to own the niche </li></ul><ul><li>Geographically distinct - but the same work as others </li></ul><ul><li>High local awareness - the local charity </li></ul><ul><li>e.g. Donkey Sanctuary, Woodland Trust, Cats Protection League, County Naturalists Trusts </li></ul>
    35. 35. Four strategies <ul><li>Niche </li></ul><ul><li>Externally/Funding-Driven </li></ul><ul><li>Differentiation </li></ul><ul><li>Awareness </li></ul>
    36. 36. Externally-driven strategy <ul><li>Carried along by external sources of revenue </li></ul><ul><li>Legacies, grants, investments make fundraisers marginalised </li></ul><ul><li>React to the news, not make it </li></ul><ul><li>Pervasive feeling that ‘money grows on trees’ </li></ul><ul><li>Trustees and Directors focused elsewhere </li></ul><ul><li>In marketing terms, there is little to recommend it </li></ul><ul><li>Most charities are moving (slowly) towards other strategies </li></ul>
    37. 37. Four strategies <ul><li>Niche </li></ul><ul><li>Externally/Funding-Driven </li></ul><ul><li>Differentiation </li></ul><ul><li>Awareness </li></ul>
    38. 38. Differentiation through audience <ul><li>A clear audience based on lifestyle or demographics or attitude </li></ul><ul><li>The audience needs to be coherent and stable </li></ul><ul><li>All activities centred around relationship with audience </li></ul><ul><li>e.g. Christian Aid, Jewish Care, CAFOD </li></ul>
    39. 39. Differentiation through product <ul><li>Product means recognisable communications relationship </li></ul><ul><li>Membership, child sponsorship, etc. </li></ul><ul><li>Product used as basis for other marketing e.g. legacies </li></ul><ul><li>e.g. National Trust, Action Aid </li></ul>
    40. 40. Differentiation through beliefs <ul><li>Strong beliefs can build a distinctive organisation </li></ul><ul><li>Beliefs about working method, about symptoms and causes, about new ideas </li></ul><ul><li>e.g. Greenpeace - non-violent direct action </li></ul>
    41. 41. Pure product strategy Pure audience strategy Spectrum of differentiation strategies Mix of product and audience strategy ActionAid National Trust RSPB Christian Aid CAFOD
    42. 42. Four strategies <ul><li>Niche </li></ul><ul><li>Externally/Funding-Driven </li></ul><ul><li>Differentiation </li></ul><ul><li>Awareness </li></ul>
    43. 43. Awareness strategy <ul><li>All communications directly or directly increase awareness </li></ul><ul><li>Awareness is not the same as advertising </li></ul><ul><li>Regular monitoring of awareness </li></ul><ul><li>Have a clear set of beliefs and values </li></ul><ul><li>Make all your activities work together </li></ul><ul><li>Structure is important </li></ul>
    44. 44. Awareness strategy <ul><li>PR must be very strong </li></ul><ul><li>Be prepared to be visible </li></ul><ul><li>Create activities to get in the news </li></ul><ul><li>You should have a spokesperson </li></ul><ul><li>Comment on everything </li></ul><ul><li>Be prepared to be outspoken </li></ul>
    45. 45. Externally- driven strategy Awareness strategy Differentiation strategy Niche strategy The development sequence of competitive strategies KEY TO ARROWS UNCOMMON DEVELOPMENT USUAL DEVELOPMENT COMMON DEVELOPMENT
    46. 46. Strategies in context <ul><li>AWARENESS </li></ul><ul><li>Oxfam or Save the Children </li></ul><ul><li>DIFFERENTIATION </li></ul><ul><li>CAFOD - audience </li></ul><ul><li>Action Aid - product </li></ul><ul><li>Practical Action - beliefs </li></ul><ul><li>EXTERNALLY-DRIVEN </li></ul><ul><li>World Emergency Relief </li></ul><ul><li>NICHE </li></ul><ul><li>WaterAid </li></ul>
    47. 47. The challenge of competition <ul><li>Our task is to envisage the future and prepare for it, to make our organisations ready for the changes and the competitive times ahead. </li></ul><ul><li>Our task is to create strategies that make our own organisations excel, and to communicate those strategies across the organisation from trustee to volunteer. </li></ul><ul><li>Our task is to prepare a vision of a better world and share it with our supporters. We are not charity workers, but fulfillers of people’s dreams about who they are and what they believe in. </li></ul>
    48. 48. 2-6 Tenter Ground Spitalfields London E1 7NH (w) www.nfpsynergy.net (t) 020 7426 8888 (e) insight@nfpsynergy.net Registered office: 2-6 Tenter Ground Spitalfields London E1 7NH Registered in England No. 04387900 VAT Registration 839 8186 72

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