Essays on Major opportunities and threats and EFE Matrix

Analysis of Opportunities and Threats

The ratings in the EFE matrix were assigned according to the analysis of external environment for ACF International and according to the industry analysis. The scores mean the following: 1 – poor response, 2 – average response, 3 – above average response, 4 – superior response (David, 2011).

ACF International in 2010 managed to increase the volumes of funding (ACF International, 2011), and thus the rating for the “Lack of funding” threat was selected as 3; the organization also implemented a large number of initiatives, established connection with local governments and managed to attract new employees and volunteers all over the world (ACF International, 2011); thus, the ratings for such threats as “Lack of qualified professionals in the target regions”, “Bureaucracy obstacles” and “Gap in the need for help and actual possibilities” were set as 3. At the same time, ACF International still faces problems with infrastructure, especially in poor regions, and thus the score for the “Poor infrastructure in the target regions” was set to 2. Growing rates of crime in countries with high poverty rates present a significant obstacle, and there are no efficient methods of reducing the impact of criminal groups; thus, the score for the “Criminal groups in the target regions” threat was set to 2.

ACF International managed to improve its efficiency in 2010 (compared to previous years), and it is likely that in 2011 the organization will show even better rates. The score for the “Ineffective implementation” threat was thus set to 3. The organization established relationships with several other NGOs and sponsors (ACF International, 2011), but ACF International did not establish strong links with NGOs dealing with similar problems, and thus the score for the “Partnership with other NGOs” opportunity was set to 2. During the 2009-2010 period, the main activities of ACF International related to water and sanitation initiatives (ACF International, 2011), and the score for the opportunity “Improving access to water and sanitation” was set to 4. A large number of initiatives launched by ACF International related to education and health care, and the score for the opportunity “Launching educational and health care centers” was set to 3. ACF International also provided a lot of emergency help, but did not use the full power of forecasts to launch preventive programs; thus, the score for the “Forecast-based emergency help and prevention” opportunity was set to 2.

ACF International managed to perform several successful online and social campaigns as well as fundraising initiatives, and the score for the “Promotion using social networking” opportunity was set to 3. At the same time, the organization paid little attention to mobile donation programs, which might create new perspectives for any nonprofit, and thus the score for the “Mobile donation programs” opportunity was set to 1. The score for the “Growing number of volunteers” was set to 3 since ACF International launched new programs and attracted more people in 2010 than before.

Analysis of industry and key strategic issues

According to Porter’s Five Forces Model, the relative attractiveness of the industry depends on such factors as rivalry among competitive firms, potential entry of new competitors, availability of substitute products and their potential development, bargaining power of consumers and suppliers (David, 2011). In the nonprofit humanitarian sector, the bargaining power of consumers is low and in fact there is no bargaining – the clients are most often happy to accept any help. However, the impact of bureaucracy, the lack of state support and possible effect of the high crime rates on the acceptance and effectiveness of humanitarian help leads to the existence of medium bargaining power of consumers. The bargaining power of suppliers is high because the nonprofits often lack volunteers and infrastructure in the target regions, and might have to accept any level of service and prices offered by the suppliers.

Potential availability of substitutes in the nonprofit sector is comparatively low because all nonprofits have own mission and goals, and develop their own innovative programs and initiatives; the existence of similar programs does not mean that the clients will have to choose between these programs. Most likely, the clients will accept all available products. At the same time, the dispersion of funding caused by many similar products might be rather high, and can lead to low quality and coverage of these products. Overall, the impact of substitute programs on a particular nonprofit can be evaluated as low to medium. Formally, potential entry of new competitors in the nonprofit sector is low, but it’ll take a long time for the competitors to grow into powerful NGOs. Thus, the entry barrier for new strong competitors still exists. Finally, the rivalry among competitive firms in the industry exists in the area of fundraising, but the companies do not compete with regard to the delivery of their products. Overall, the rivalry can be estimated as moderate. Since the need for nonprofit sector services is expected to grow, as well as the interest for volunteer movement and the methods of donation and fundraising, the industry can be estimated as quite attractive.

For ACF International, key strategic issues are related to meeting customer demands, establishing connections with local governments and NGOs as well as developing methods of improving social and criminal trends in the target regions. In addition to this, ACF International should pay more attention to modern means of fundraising and introduce facilities for mobile donations, since this technology is very promising for the nonprofit sector. ACF International should also build its strategy with regard to powerful competitors such as Save the Children and Mercy Corps, and create programs which do not duplicate the ideas of these organizations. At the same time, ACF International might seek partnership with these companies or with other NGOs operating in the same sphere (especially those focused on eliminating hunger and malnutrition) in order to unite efforts and to expand the network of ACF International.

References
David, F.R. (2011). Strategic Management: Global Edition. Pearson Education, Limited.