“The concept of competitive advantage is as important for non-profit organizations as it is for profit organiz

Question

profit organizations”. Do you agree with this statement or not? Explain with examples to justify

your answer.

Answer 1

I could argue either side on this one. After thinking about it a while I will try and take what I see is the more difficult argument.

I AGREE WITH THE STATEMENT.

The concept of competitive advantage is one company can do some part of their job better, cheaper, faster, whatever, than another company. Examples of these are...

cheaper materials - Saudi Arabia cost to produce a barrel of oil is cheaper than most countries because they have so much and it is cheap to drill for.

cheaper labor - China has a cheap labor force so manufacturing is going there.

good engineers - Silicon Valley has an advantage in developing high tech stuff because Stanford University in the 50s challenged engineers to stay there and develop new products and companies rather than go work for the established companies in other parts of the world.

What does this have to do with non profits? Well, what do non profits need? They need causes, volunteers, money, infrastructure, and success. There are more I am sure but these are probably the main ones.

CAUSES - A group trying to save polar bears would probably do better than one trying to save termites. Cute kids trump drunks in the street. Puppy dog rescue beats saving hyenas. All this of course gets trumped by the animal of the year in the latest Disney movie.

VOLUNTEERS - If you can get volunteers fired up and ready to help it sure beats having to hire people. How easy is it for people to volunteer? Do they feel they are making a difference? Is it fun?

MONEY - A non profit fully funded by Bill Gates will have and advantage over the lady down the street who has little money but wants to save all the cute little kittens from the pound.

INFRASTRUCTURE - How big is the group? Do they already have a presence where the charity is needed. Red Cross is large and makes a big difference every time there is a disaster. If there is an earthquake in California, Red Cross is there, you see them on TV helping. If you want to help the disaster victims who are you going to give money too?

SUCCESS - Does the money given go to helping the cause or is it used for salaries for those who are asking for money. See Red Cross above. There are often report cards published on how much money is going to help for major charities.

I guess we can add MARKETING. A non profit that can get the word out about the good things they are doing will be able to attract more money and more volunteers.

Does that help?