Strategy Dynamics Briefing 61: Rivalry in noncommercial cases

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Competition is widespread in public services and voluntary organizations, and is often similar to the rivalry for customers in business cases. Voluntary organizations must be clearly helpful to the beneficiaries of their services if they are to attract funding from donors, so any such organization with few such “customers” will lose out in the fundraising market. Other customer-like rivalry arises for political parties who compete for voters, and Churches who compete for followers.

Rivalry for staff occurs constantly amongst public services, so the framework in Briefing 60 is directly applicable to competition for staff in such cases, as well as in other noncommercial situations. Competition for staff can become international in scope, such as when nursing staff are attracted from low-pay economies to work in the health services of richer nations. It is even helpful to regard terrorism as a “career path” for people that competes against more benign occupations.

Voluntary organizations constantly compete to attract donors and the giving that they bring, competition that can readily take any of the three forms discussed in previous Briefings — capturing new donors, winning donors from other organizations, and capturing more share of the giving from donors who support more than one organization. Just as businesses compete for customers and sales, voluntary organizations should be conscious of which form of competition they are engaged in, and where their efforts should focus. Depending on the scale of the challenge, it may be worthwhile to go further and try to estimate the numbers and value of donors involved and the rate at which they are moving around the structure in Figure 1.

Figure 1: The three rivalry mechanisms for donors to voluntary organizations. (Click image to view larger)

The three rivalry mechanisms for donors to voluntary organizations.

This framework, like those for customer-based rivalry discussed in earlier briefings, may need to be segmented to differentiate between high-giving donors and others, or extended to deal in more detail with the varying attributes of the donor population explained in Briefings 24-31.

Until next time…

 

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Rivalry across sectors

It is long been known that competition does not just mean competing with suppliers of similar products or services, but may also involve competing with ‘substitutes’ – different products or services that nevertheless fulfill the same benefits for the customer. Air travel is a well-known example, where passengers could choose road or rail instead. Even video-conferencing is a viable substitute, if it avoids the need to travel for a business meeting.

Strategic Management Dynamics book coverPublic services and voluntary organizations, too, may need to think about ‘rivalry‘ more broadly. High-profile TV-based charity campaigns can attract large donations to support such causes as famine-relief. People who make those donations may feel they have ‘done enough‘ giving, making it harder for other charities then to raise money for other causes. It has even been suggested that national lotteries divert money that would otherwise go to charities, if players believe that the money raised by the lottery goes to other good causes.

This briefing summarises material from chapter 7 of Strategic Management Dynamics, pages 483-484.

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