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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 ?