Anda di halaman 1dari 56

Social

Entrepreneurship
Lecture 8: Launch, Growth attainment

By:
Amrit Bista
BE, MBPM

Date: 27/01/2019
1
Five competitive forces model

Commercial firms are affected by

 Substitutes
 Ease of entry
 Market power of buyers
 Market power of sellers
 Competitive pressure from current rivals

2
What are parallel threats acting on
social enterprises?
 Substitutes ways for clients to meet their needs
 Competition for donors who support other non-profits
 Competition with other groups serving the same clients
 Socio-economic or demographic changes in client needs or
interest
 Public policy changes in regulation or funding levels
 Bargaining/market power of paid workers, lenders, land
owners, and third-party payers
 Figure 8.1 illustrate these forces

3
Figure 8.1: The threats to social value
creation

Substitute for service

Socio-economic and
demographic changes Ability to create social
value
Public policy shifts

Bargaining power of
sellers and buyers 4
Social Entrepreneurship process

1. Opportunity recognition 2. Concept development

Social problems Identification of social


rewards
Unmet needs New products or markets

3. Resource determination and 4. Launch and Venture growth


acquisition

Financial resources Measurement of returns

Human capital Expansion and change


5
Social Entrepreneurship process

5. Goal Attainment

Succeed in mission and shut down

Succeed in mission and find new opportunity

 Attain a stable service equilibrium

 Integrate into another venture

6
Key challenges of social enterprise

7
Key challenges of social enterprise

8
Key challenges of social enterprise

9
Key challenges of social enterprise

10
Key challenges of social enterprise

11
Key challenges of social enterprise

12
Key challenges of social enterprise

13
Key challenges of social enterprise

14
Key challenges of social enterprise

15
Key challenges of social enterprise

16
Key challenges of social enterprise

17
Key challenges of social enterprise

18
Key challenges of social enterprise

19
Key challenges of social enterprise

20
Key challenges of social enterprise

21
Key challenges of social enterprise

22
Key challenges of social enterprise

23
Key challenges of social enterprise

24
Key challenges of social enterprise

25
Key challenges of social enterprise

26
Key challenges of social enterprise

27
Key challenges of social enterprise

28
Key challenges of social enterprise

29
Key challenges of social enterprise

30
Key challenges of social enterprise

31
Key challenges of social enterprise

32
Key challenges of social enterprise

33
Key challenges of social enterprise

34
Launch and growth

 Follow a tangible business strategy with a plan


 Needs a growth strategy, explicit and transparent
 Must cover plans for removing obstacles (plan B) and
measuring progress through regular, appropriate
monitoring

35
Social enterprise growth strategies

 Product-driven growth
 Additional activities or programs
 Market driven growth
 Finding new consumers for existing services

 There are not mutually exclusive – social enterprises can


combine new or old products with new or old markets
 Table 8.1 illustrates these combinations

36
Table 8.1 Social enterprise growth
strategies

Existing Markets New Markets


Existing products Market Market expansion
penetration
New Products Product Product
development diversification

37
Merging as a growth strategy

Merger proposal should address


 Is there willingness to partner, as a starting point?
 Which organization is dominant?
 Is there much to gain, are the stakes high?
 Is there a catalyst leader?
 Are there other supporters?
 Is there enough (not too much) time to discuss?
 Do missions align?
 Can productive personal relationships develop?

38
Myths about social growth

A social venture will not grow quickly unless it is


in a high-growth sector
 Figure 8.2 shows that different sectors grow at the
different rates
 Growth is a more a characteristics of the specific non-
profit than the overall sector

Rapid growth requires a venture being the first of


its kind
 First-mover advantage is not as critical when there is
unmet need that an enterprise can address

39
Figure 8.2: The growth of various
social sectors, 1977-97

40
Problems to anticipate during growth

 Being clear about the stimulus for growth


 Resistance to market-based change
 Boards are risk-averse
 Community relationships resist change
 It is hard to show the results of change
 There are human resource management as well as cultural
challenges

41
Creating an intrepreneurial
environment
 Encourage action
 Use informal meetings
 Understand that failure is a part of learning
 Be persistent in implementing ideas
 Make innovation a goal
 Encourage informal communications in the workplace
 Encourage the development of new ideas
 Assign people to think about the future
 Encourage ways to work around bureaucracy
 Reward innovation

42
The intrapreneurial process

Key elements are:


 Organizational characteristics
 A trigger event
 Entrepreneurial personnel
 Supported by resources and ideas
 Figure 8.3 shows how these forces interact

43
Figure 8.3: A model of
intrapreneurship

Organizational
Idea
characteristics favourable
quality
to innovation

Triggering event Ideas Implementation


of ideas

Personnel with
entrepreneurial Resources
characteristics
44
The intensity of social
entrepreneurship
It is characterized by degree and frequency
 Degree can be revolutionary or incremental
 Frequency can be continuous or sporadic
 Figure 8.4 shows these dimensions of intensity

45
Figure 8.4 A model of entrepreneurial
intensity

High
Continuous and
Continuous and
revolutionary
incremental
Frequency of
social
entrepreneurship

Infrequent and Infrequent and


incremental revolutionary
Low

Degree of social
Low High
entrepreneurship
46
Understanding risk factors for social
entrepreneurs
 Leadership risk
 Staff and volunteer risk
 Funding risk:
Current financial situation
Effect on future funding
Diversification – one business or more?
 Enterprise concept risk – is it really a good idea?
 Marketplace volatility – exposure to broad economic and
social factors

47
Managing and reducing risk

 Get help from experts and network with other social


enterprise
 Gather and use data, look for signs of volatility
 Plan with realistic models, updated frequently, with
contingencies
 Diversify the support base to spread the risk
 Grow and make commitments in stages
 Work on organizational weaknesses
 Avoid all-or-nothing bets – work steadily towards big goals.

48
The end of the social
entrepreneurship process
 Attaining goals is the last stage of entrepreneurship
 And then what – how to harvest the gains?
 Nonprofits do not provide the opportunity to divide or
distribute wealth
 The needs for social enterprise is likely to exist even in the
face of success

49
Some enterprise end in failure

 Just as in commercial venture, there are high failure rates


among social ventures
 Figure 8.6 shows the high share of new organizations
disappeared within four years in the 1990s
 Environmental, religious, arts and other types of
organizations seem to have been particularly fragile

50
Interpreting failure

 When social enterprises close, it is the impact of the


market mechanism at work
 One organization’s failure is an opportunity for another
one to succeed
 The failure of a social enterprise is not primarily a moral
lesion, but neither do social entrepreneurs have moral
immunity against failure

51
Figure 8_6 Organizational
disappearance
Rate of organizational disappearance within first four years of operation in
seven non-profit sub-sectors, 1992-1996

52
Goal attainment is a critical point of
decision
 Shut down
 Redefine
 Stabilize and continue
 Integrate into another venture with purpose

53
THOUGHT FOR CHANGEMAKERS

 Begin with an end in mind


 Do what you do best
 Have people ask you questions about your idea
 Practice pitching your idea
 Study the history of the problem you are attacking
 Develop a theory of change
 Keep thinking about how you can measure or evaluate
success
 Celebrate every victory, no matter how small
 Initiate new relationships
 Appreciate yourself with masters (Work without pay if
necessary

54
THOUGHT FOR CHANGEMAKERS

 Volunteer for a political campaign


 Publish a letter to the editor or an op-ed
 Meet with a newspaper editor
 Host dinner discussions about your idea
 Form a group to achieve a modest, short-term goal
 Ask a question at a public forum
 Engage people with opposing political views
 Ask for advice from people you admire
 Read biographies of people who have built things
 Spend some time working in a different sector, field or
country
 Practice public speaking

55
THOUGHT FOR CHANGEMAKERS

 Take a finance course


 Learn how to negotiate
 Find sources of inspiration and use them
 Hold to principles, be flexible about methods

56