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Strategic Analysis & Planningfor NGOs
CUSTOMERS
DOMAINS OFINTERVENTION
SERVICES
MYINSTITUTION BUYERSSUPPLIERS
GOALS
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Life ’s Cycle of an Association
Birth
Adolescence
Consolidation
Adult ageMature age
Bureaucracy
Death
Time
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Nachhaltige Entwicklung ..
…ist eine Entwicklung,
welche die heutigen Bedürfnisse zu decken vermag,
ohne für künftige Generationen die Möglichkeit zu schmälern,
ihre Bedürfnisse zu decken.
(Bruntland - Kommission 1987)
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Mission, Vision, Strategy
MISSIONWhy are we in business ?
VISIONWhat do we want the business to look like five years from now ?
STRATEGYHow do we intend to get there ?
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The Elements and their Consistency
BUSINESSCAPABILITIES
OrganisationOperationsExpertise
Ressources
EXTERNALENVIRONMENT
STRATEGYGoals
Product Market FocusCompetitive Premise
Business System Focus
5 Forces of Porter
MISSION
VISION
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Environment: the Five Forces, external factors, ...
RivalryRivalry
EntryEntry
SubstitutesSubstitutes
SuppliersSuppliers CustomersCustomers
Entry
Suppliers Rivalry Customers
Substitutes
… their evolution and their meaning
EX
TE
RN
AL
FA
CT
OR
S
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4 Business Strategy Components • Goals: What do we intend to achieve ? What are our expectations
with respect to the evolution of the environment ? (SMART, 5 Forces)
• Product Market Focus: What are the products/services that we intend to provide / sell , and to what specific markets (members, customers) ? (Product Market Matrix)
• Competitive Premise: How do we intend to win in the marketplace ? What will we offer to our customers / members that is important to them, different from our competitors, economically feasible and difficult to match ? (Marketing Approach, 5 Forces, Environment Analysis, Budget,)
• Business System Focus: What are the prime value-adding activities that we want to perform in house ? (Value Chain)
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Product Market Focus
Customer1
Customer2
Customer3
Product 1
Product 2 $ or X
Product 3
Product 4
Total (if $)
Product Market Matrix
CUSTOMERS SERVICES
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Competitive Premise (« niche »)
CompetitivePremises
Products/services
Importantto
customer
Difficultto
match
Differentfrom
competitor
Economicallyfeasible
Product 1Product 2 XProduct 3Product 4
Matrix : Products / Competitive Premise
What makes us indispensable, better als competitors and economically viable ?
Ideal state : crosses everywhere !
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Business System Focus
The Value Chain
MYINSTITUTION BUYERSSUPPLIERS
Make or buy ?
CUSTOMERSRAW
MATERIALSSALEDISTRIBUTIONTRANSFORMATION
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Business Strategy Components
MYINSTITUTION
CUSTOMERS
DOMAINS OFINTERVENTION
SERVICES
MYINSTITUTION BUYERSSUPPLIERS
Product Market Focus
Business SystemFocus
CompetitivePremise
GOALS
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The Process of Strategic Analysis
STEP 1: EVALUATE THE CURRENT BUSINESS PERFORMANCEHow is our institution doing ?
STEP 2 : EVALUATE CURRENT STRATEGY (CONSISTENCY) AND ASSESS THE URGENCY FOR CHANGE
STEP 3 : DEVELOP AND EVALUATE STRATEGIC PROPOSALS
STEP 4 : COMMIT, AND PREPARE TO IMPLEMENT
Analysis is complete. Move to management change
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Institutional Self Evaluation
STEP 1 :EVALUATE CURRENT BUSINESS PERFORMANCE• How is our institution doing ?
(organisation, operations)Strengths - Weaknesses
• Are our Programs and Ressources adapted to our objectives ?• How far do we depend upon international help ?
STEP 2 : EVALUATE CURRENT STRATEGY• Is our Strategy consistent with our global project, our business
capabilities and the evolution of the external environment ?
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Step 1: Evaluate Current Business Performance
• Strengths / Weaknesses / Opportunities / Threats– internal
• Operations• Organization• Expertise• Ressources
– against external references• Customers (satisfaction)• Competitors• Suppliers• Substitutes• Entry Barriers• Benchmarks
1. OK 2. ComplacentOrganisation
3. TroubledOrganisation
4. Crisis
OR
GA
NIS
AT
ION
AL
HE
AL
TH
+
-+ -
OPERATING PERFORMANCE
SWOT
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Step 2 : Evaluate Current Strategy
• Identify the current strategy
• Evaluate the strategy– Goals, Product Market Focus, Competitive
Premice, Business System Focus– use model to assess its consistency
• Assess the nature and urgency of required changes– forecast the future performance, assuming the
strategy stays the same– identify problems (importance, urgency)– identify changes needed (minor, fundamental)
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6 Essential Strategic Questions
• WHAT ? Activities and main programs (risks)
• WHERE ? Target Territory
• FOR WHOM ? Target Groups
• HOW ? Means of intervention (realise, finance, « catalyse », advise, coordinate, inform, short or long term engagement)
• WHEN ? Planning
• WITH ? Ressources (training needs), capabilities
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Degree of Financial Dependenceand Self Financing
% Financial Dependence from International =Help
Total International Help
Total budget / expenses
% Total Financial =Dependence
Total international help +Total national and local help
Total budget / expenses
% Self Financing = 100 % - % Total Financial Dependence
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Basis of financial autonomy
• Improved ressources ’ management
• Increased productivity
• Created savings as basis for new investments
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How to increase Self Financing ?• Self Effort
– Members ’ contributions and Participation to special projects
– Material contribution
– Work contribution
– Credits
• National and local financing– Donations
– Profits of organised events
– State Help
• Sale of services or products– Income generating projects
– Profit Centers controlled by the association
– Consulting
– Credit
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What is a Business - Plan ?
A « Business - Plan » is a document which describes your institution now and in the future.
It shows :
… your perspectives
… your goals
… the allocation of your ressources– organisation– finances
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Objectives and uses of a Business Plan• Objectives of a Business Plan
– Study the feasibility and sustainability of an enterprise (institution, project)
– Present own objectives and concepts
– Bring to future partners and investors essential elements for their decision
• Uses of a Business Plan– Search for investors, convince donors
– Sale or acquisition of comapnies
– Search for financing a credit or leasing
– Acquisition of a big customer
– Rectuiting a new executive
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Content of a Business Plan
• Executive Summary• Company ’s Presentation• Product / Services• Markets and their Evolution• Competition• Marketing / Concretisation of the Market• Localisation / Production / Administration• Organisation / Management• Risks Assessment• Finances
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Questions for strategy assessment (1)
• Business Capabilities– Do we have enough organisational means to bring our
programs to successes ?– Do we have enough expertise in the fields we ’re
working at ?– Do we need to train our collaborators ? - If yes, how
can we do it ?– Do we have enough experience and adapted methods
to work with our target groups ?
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Questions for strategy assessment (2)
• Business Capabilities– Do we know the ressources (human, financial,
technological) we need to reach our goals ?– Do we have enough collaborators, equipment and
material to realise our programs ? - If not can we get them on time ?
– Do our collaborators know our strategy so that they can contribute to its success ?
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Questions for strategy assessment (3)
• Vision– Can we clearly tell what should be our institution within 3-5
years ?
• Goals– Does our actual orientation bring overall superior results ?– Will this orientation assure such results in the future ?
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Questions for strategy assessment (4)• Target Groups
– Do our programs respond to the needs they expressed ?
– Do our programs correspond to a prioritary need of the community or the country ?
– Can Target Groups fully participate to planning, organising and evaluating programs ?
– Which long term impact could our porgrams have on the local communities ?
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Questions for strategy assessment (5)• Product Market Focus
– Do we have clear priorities about our future offer of products and services ?
– Do we have clear priorities concerning target groups and customers ?
– Do we succeed without being too dependant from one customer, one product, one market ?
– Does our institution have several pillars so that it can survive to a grave event (lost of a big customer, price war, hard competition) ?
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Questions for strategy assessment (6)
• Competitive Premise– Do our customer find we are unique and difficult to
match ?
• Business System Focus– Have we already asked ourselves if we could make
our business in a completely different way ?
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Questions for strategy assessment (7)
• Environment– Can we exclude important environment ’s changes
which could force us to make radical changes ? (customers, technology, market, competition, …)
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Questions for strategy assessment (8)
• Consistency (coherence)– Does our strategy correspond to the fundamental
choices (mission, vision, goals) or our association ?– Is the strategy broadly accepted by our members,
board, management and collaborators ?