 As-Salaam-Alaikum-Khawwati-Nuh-Hassanat. Wasim As-Salaam welcomes you to lecture number nine of Marketing for Non-Profit Organizations, MKT 6-8 at the Virtual University of Pakistan. We're going to get into the first component of the lecture, which is going to be all about examples from the area of mission, objectives and goals. We already have developed a basic understanding of these three elements of the strategic process. And today I'm going to talk about the relationships that exist between these three elements in a way that we understand how these elements flow out of each other in a natural way. We know that it all starts with a purpose. The organization exists because it has a certain purpose at hand. And fulfilling that purpose marks the completion of the strategic process and achievement of the mission. So how these three elements flow out of each other is going to be evident from the two examples that I'm going to give you, one after the other. Let me start with the first one. You happen to be working for an organization that wants to be in the area of alleviating hunger in a particular geographical area. Well, it goes without saying that this geographical area is not affluent. It deserves food, which has to be offered to them, either absolutely free of cost, or maybe at subsidized rates because you think that you have to maintain some level of self-dignity and self-worth of the target market. And therefore, you would like to sell food, although at subsidized rates. Having said that, the way should be clear about the purpose of the organization. But we have not yet understood or other talked about the scope of operations. The scope of operations is going to be dependent on the purpose. If the purpose is to solicit food from other outfits that already are into the area of preparing food, then it is going to be the one set of circumstances. However, if the organization thinks it is going to prepare food by itself, it is going to be another set of circumstances. In either of the cases, the mission statement is going to be a little different because it is going to talk about scope of operations, which is going to be different in either case. Going back to the case of a collection of food from those outfits that are into the business of preparing food, let me tell you here that there are examples of organizations that solicit food from restaurants on daily basis by collecting their leftovers, preserving those, and then distributing those among those who are needy and who have to be fed on daily basis. The organization is supposed to work out certain mechanics as to how to pick those families that are deserving and how the food is going to be distributed to those families comprising the target market. And that is something that we should be part of the objectives first and then goals. But let me go back to the mission statement. Depending on the scope of operations, whether you do it by yourself or you let somebody else do it and then collect it from them and then distribute to the target market, it's going to form the exact construction of the mission statement. And that is why I said I'm not going to construct the statement for you. And I would rather like to leave it to your imagination and creativity because you are the one working for the NPO and you are the one who's going to decide what should be the real scope of operations. Now, this is not a question of your whims or your fancies. This is a question of what kind of resources you have and what level of capabilities and core competencies you have, which will enable you to do the job which you want to do, meaning either collecting food or preparing food. The point here is that the capabilities and core competencies have to be applied in a way that the resources that you have at your disposal could be optimized, could be very finely capitalized on, and you get some kind of advantage out of the whole exercise. Once you are clear about the scope of operations, it will go back into the mission statement and you will proceed accordingly. Now, the next question that you will have, how do you distribute that food? Well, you distribute that food either at stationary distribution points or through mobile network or a combination of both, again, depending upon the resources that you have and the capabilities that you have. The next thing that you must consider and which goes without saying is the product. You can have a couple of different products in shapes and forms. For example, you can have food packets in which you distribute at the distribution points and you also can distribute meals for congregations of different sorts of kinds for different occasions. And if you allow me to go back to the purpose of the organization once again, you can get into relationships with those constituents who are going to the most relevant in terms of the purpose of the organization. In other words, if the purpose is to collect food, then you will like to develop constituents who are the most relevant in terms of providing you with that kind of service. However, if the food is going to be prepared by the organization itself, then you will be developing different kinds of constituents. You may like to get in contact with the growers of food or the distributors of prepared food or food items and wedding party, caterers, and any other constituent who you think can be of a very high level of relevance to the service that you want to perform. So you have seen that you're going to have the different options at your disposal in terms of preparing the product and in terms of distributing the same. You can have the solicitation model, meaning you get food from somebody else and then distribute it, or you get food from somebody else and also distribute it through somebody else. The meaning, you get into an agreement with another NPO that specializes in distribution services and you decide for yourself just to be an interface between those who prepare food and those who distribute food. You perform the function of an organization that identifies the target market and then makes sure that food is collected on daily basis and distributed on daily basis very efficiently. The next shape and form could be that you prepare food and distribute it yourself or you prepared food and have it distributed through somebody else. There could be so many different combinations and all these combinations are going to be a reflection of the mission of the organization. Or in other words, if you go back and try to fit all this to the mission, they should fit very well into it. Once you are clear about the product source the distribution and the complete scope of operations, you are all set to construct the mission statement. And once you have prepared it, you get down to defining the set of objectives which will define the strategic direction that your organization should take in order to move forward. In this particular case, what do you think are going to be the objectives? Well, the foremost objective would be to very strategically identify those constituents who can be most relevant to the organization in terms of enabling you to be able to distribute food to the target market. Whether you solicit food from somebody else or you prepare it by yourself, the objective is going to develop the relevant constituents which could be restaurants and wedding party caterers, like I said earlier, in case you want to collect food from somebody else and which could be growers and manufacturers of food items and distributors of the same so that you can make things easy for you to start preparing food. And the next objective could be to get into a JV, meaning joint venture agreement with another NPO who you think should perform or could perform the distribution function better than your organization because it is not your expertise to get into distribution. Your resources, capabilities, and core competencies do not reflect these kind of features and characteristics that you can undertake the job by yourself and therefore you would like to have another company that already is into a similar business and specializes in distribution networks. So you would like to get into a JV, the mechanics for which you have to very smartly work out so that you can get into a collaborative relationship and develop synergies for effective distribution and marketing. Another objective would certainly be how you could have put all these connections together so that the revenues can be generated at a level that is a prerequisite for the organization to sustain itself. You can also think of a couple of more or a few more objectives which you think provide you with these strategic direction absolutely essential for your organization to move forward toward achievement of the mission. Now, once you have laid down all the objectives, you have to very sharply put together the goals which are going to be a translation into numbers of your objectives. So in other words, here you're going to talk in more certain terms. The goals for this organization would be in the first place to determine the number of families that form your target market. I think that has to be the starting point. Although I'm talking about this particular factor as part of goal specification and the goal determination, but the fact is that your whole business plan for the NPO starts with this particular point that you must know the size of your target market. Once you have identified the families, then you can translate that into the amount or the quantity of food that you require in order to feed them. Here you'll have to work out the mechanics for identifying the families that are your target market and you can get into mechanics like demographics in the first place. In other words, identifying families on the basis of their income distribution. For example, you might decide for yourself that you would not like to distribute food whether free of cost or at subsidized rates to those families that have less than five members and that have more than one earning member. Once you have these numbers based on demographics, you can get into your requirements of distribution because without having information on the quantity of product that you need and the size of the target market that you have, you cannot move ahead with the distribution. Therefore, whether it is distribution of food packets at stationary distribution points or distribution of those packets at the doorsteps of your target market or through a distribution network belonging to another NPO, all is going to depend on the total quantity that you are going to generate on daily basis and then weekly and then monthly basis. With this, we are done with the first example of a food bank that has the mission to alleviate hunger in a particular geographical area. The reason I call it food bank because you may like to opt for the setup that solicits food from other entities that already are into this business and together you're out to collect that food for further distribution and you are basically performing the function of a food bank. So that's why I said this is an example of a food bank. Let us now move on to the next example which is going to further clarify what this concept is all about, meaning the mission, the objectives and the goals. I know that you already are quite clear about how these elements work as part of the strategic process. They flow out of each other and they all start with the purpose of the organization but still I would like to give you another example because I really would like you to be very creative in terms of putting different examples together once you start developing a complete conceptual understanding of the NPO environment. This example relates to a nursing home because you are working for that nursing home which provides medical and nursing care to elderly people in their latest years. Now the intention here is that you would like your organization to become an entity that differs from other organizations offering similar kind of services. You would like to differentiate on so many different counts which are in addition to just offering the boarding and lodging with medical and nursing care to elderly people who may start thinking that they are counting their days and waiting for the terminal point in their life to come and take them from here. That is not the case when it comes to your thinking process and when it comes to your strategic process to be more precise. Because you think by offering differentiation to the residents of your nursing home you can develop a facility which is second to none. And you think it is not just the medical and nursing care rather you must consider other factors like their dietary habits and their socializing needs and their need to determine certain activities in relation to their hobby patterns and so on and so forth. The reason you want to go for these considerations because you want to tell the residents of your facility that they are still relevant to the society and by offering these services in addition to the basics, run off the mill, medical and nursing care you want to develop a sense of self worth and dignity on part of the residents. And the unique selling proposition of your organization that has its roots in differentiation, the kind of differentiation I've just talked about with the meaning all those factors which come in addition to basic medical and nursing care. Once we are done with the mission we are down to defining our objectives. Here in this particular situation I think the foremost objective has to be hiring of the medical and nursing staff that are absolutely essential to keep the facility alive and to be able to provide the residents with the basic service for which the facility exists. In addition to that, we also need to have people who have the savvy for different kinds of social matters because as part of the mission and purpose of the organization we did talk about giving the consideration to the dietary habits of the residents their socializing needs and the need to self determine the various kinds of activities like if somebody wants to get into gardening the organization should be able to provide them with the requisite opportunity and so on and so forth. Therefore we need to have people from different social areas because one being hospitality. So in other words, we need people who are the good at the practices from the area of the hospitals but also in addition we need people who are knowledgeable about the hospitality business. So in other words, we also can join hands with hotels and restaurants as part of some kind of cost marketing relationship whereby we can draw on their expertise, their knowledge and their savvy for the different areas that we wish to or we envision to put together as part of the organization's mission. The thing here is that we've got to put together all those steps and bring them into focus that are required to lay the base for the four hour strategic movement toward achievement of the mission and that of course is going to take us toward specifying goals and the foremost goal here also is the generation of funds, the revenue stream. That's something which is taken for granted and without that the goal, your plan cannot be complete in any sense and therefore take it for granted that this goal always under any circumstances has to be talked about. Another goal could be specifying what kind of a relationship you are going to have with your partners and maybe as part of a cost marketing relationship or maybe as a short-lived joint venture that whatever is the case, you have to translate all the mechanisms into the financial terms and into different numbers so that you can see from day to day and from week to week and from month to month where you stand and where you need to reach and what has been the performance at a given point in time and what is left to be done and so on and so forth. Another goal could be the training and development of the different staff members not just the doctors and nurses but also specialists in different social matters because training and development from time to time will keep them current with the latest trends and by doing that, they can add a lot more value to the concept that I'm talking about. We're now getting into the next component which is on culture. Culture basically is a set of values and beliefs held by the members of the organization. Culture becomes the guiding principle for people to move forward. By harboring those values which are positive and therefore the greatest challenge in terms of inculcating a good culture in any organization, whether it be commercial or an NPO is to standardize those values and beliefs as much as possible because the more people believe in good values and beliefs, the better off the organization will be. So in other words, a large body of employees harboring positive values and beliefs to the will to make their organization a good working place and a successful organization because they're a cohesive team. A good culture means that the team is cohesive and the team is cohesive because it has the commonality of the values and beliefs. Like I said, organizations fail because they do not have good culture. They are successful because they have a strong culture and all the successful organizations have a strong culture. The resources, capabilities and core competencies are something which also evolve out of a good culture and how does that happen? Well, I'm gonna show it to you in a while. Back to cohesiveness. The more cohesive as a team, the better the organization is. It goes without saying and the fact is many good organizations exemplify a very decent and practical working environment without having any policy manuals and very well structured systems and procedures only because they have a very strong culture. So in other words, people working for those organizations know what is to be done under any given set of circumstances. These people do not really have to refer back to any policy manuals or systems or procedures to seek guidance in order to complete a certain job under any set of circumstances. So culture plays a very important role toward making a setup either successful or unsuccessful. Now, this is not to say that good organizations should not have policy manuals and they should not have well-structured systems and procedures. Before I start talking about the need for these factors, let me say here how the culture of an NPO evolves. Well, because NPO's are started by very passionate individuals, NPO's reflect their personalities. Culture development gets a head start and everything that's done in the organization is well-intentioned and people like to carry it forward with a lot of zeal and enthusiasm of following the example of the leader or rather the founder of the organization. They still harbor the values and beliefs that were demonstrated by the founder of the organization and it becomes a way of life, a very strong culture which works day in and day out and it keeps working for a number of years. The organization reaches a point when it really starts growing and it starts feeling the need of making a transition from the formative period to the period of further growth. So it becomes kind of a transition from one phase to another phase and this brings in the need for making certain changes and certain adjustments which reflect on the culture of the organization and that is something which is not really liked and approved by the people who are working for the organization. Let us call these people the existing staff members of the organization. Why is it that the need for making certain changes is felt? Well, the growth of the organization has to be managed in a programmed way which calls for adaptation of the principles of competitive marketing management. So in other words, if we really believe in the concept of customer centeredness, this is the time when the customer or the target market has to be brought into a sharp focus and the bringing the target market into a focus brings along with it a lot of changes that are reflected onto the culture, like I said earlier. The new entrants into the company who are hired mostly from the commercial sector because the organization now wants to have a customer focus are more oriented toward the commercial we are working and have less knowledge of the way an NPO works. It becomes a very interesting kind of a situation which also presents itself as kind of a predicament because the old people working for the organization are very satisfied with the way they are working because whatever they have done over the past years have been to the satisfaction of everyone. But the new entrants think that there has to be a certain different way so that they can make adaptations to the management process of the organization in a way that the target market gets the center stage. Here I would like to point out that the reason target market has not had a center stage until this point is that the NPO has been working very satisfactorily and that owes basically to the fact that it started when there was no competition and it was mostly on its own and a lot many different stakeholders did not really interfere or intervene into their working and it grew to a certain point but now things have changed and customer has taken the center stage and therefore there's a need for making adaptations to the principles of competitive marketing management and when that happens the old group confronts the new group. The new group to say is the marketing expert group so to say and the older group is the one that believes in a very high level of social service which is based on very serious and sincere intentions. This is not to say that the marketing people do not subscribe to that view. The only thing is that marketing people think that the social service that the organization has been providing so far has been very, very intentioned. No question about that but that has been done and achieved in disregard of so many the different principles and parameters that we talk in relation to or in the context of competitive marketing. For example, the old people did not take care of the waste. They were not really concerned about a high level of efficiencies and productivity because they were only concerned about offering the social service regardless of the cost and regardless of the implications of those costs on the future programs. And therefore the new marketing people think that they need to make certain adjustments all over to the organization structure, to the systems and procedures and to think that everything has got to be institutionalized in order to make the working of the organization very much compliant with the principles of not only competitive marketing management but also overall management of organizations. And this is where the conflict between the old people and the new people starts. The conflict grows because there's the one school of thought that thinks that the new school of thought does not really have a commitment to the purpose whereas the new people or the new school of thought thinks that the old one does not really have a concept of the fit between the mission and the strategy. So this is the kind of the conflict that brews and it keeps brewing until the point that it is resolved amicably either between the two groups through their own initiative or with the help of intervention from the board of directors. Whatever the case is, it becomes extremely significant that differences are resolved and the organization is not only put back, you seek it onto a healthy, positive track, but it also starts following some newer concepts in order to meet with future challenges. And that calls for conflict resolution which is brought about only when the one group becomes subservient to the thoughts of the other group. Now here you see that I'm not choosing the word subservient in a negative way, but what I'm trying to say is that the one group gets convinced by the logic and the concept of working of the other group. If it becomes kind of a conflict of egos, the organization will never go for the resolution of the conflict and therefore it is very important for the one group to listen to the other group in a way that their thoughts are subordinated to the ones they think are superior to theirs. And therefore toward that resolution, they've got to answer the certain questions and those questions relate to what exactly is the mission of the organization. So we are going back to the mission. I mean, if the mission is provision of social service at what cost, with what kind of efficiencies and with what kind of results to which they will bring the organization a better vision for the future years. So these are the kind of questions that they have to answer. And then they also have to look into what is wrong with the existing mission. Those people who think something should be added to the mission or something should be deducted from the mission, they've got to have very logical and convincing background and rationale for that so that the other party that could convince itself that yes, we have been missing this particular standpoint or perspective and therefore we should put our thoughts in subordination to what they are saying. And they have to look into what exactly there should be the mission and what kind of adjustments should be made to objectives and goals. Objectives are very strategic in nature and the whole team, meaning the collection of the old school of thought along with the new school of thought have to look into which objectives are going to serve the purpose of the organization better. And once there is agreement on that only then the resolution to the culture conflict or the culture shock will take place. And the whole organization will start talking about not just offering the social service based on very sincere intentions, having good values and beliefs but also in terms of how to maintain very high efficiency, how to cut wastes and how to be very competitive because we are at competitive market stage and the competition offers itself in so many different shapes and forms and to tackle and manage all that we need to have application of the principles of competitive marketing management. We now get into a very interesting component of the strategic process known as SWOT. We all know that SWOT basically stands for Strengths, Weaknesses, Opportunities and Threats. And it really is a wonderful tool to analyze the two environments with the meaning of the internal environment as well as the external environment of the organization with the by way of taking count of the strengths, the weaknesses, opportunities and threats. How do we ward off threats with the help of our strengths and how do we exploit our strengths to seize the various opportunities is going to be the learning of this particular component. Although we all know what SWOT is but in an NPO context, I think I need to talk about the basic elements that must be considered before we carry out the two requisite analyses. Well, we know that resolution of any kind of cultural conflict within the organization has got to take place. And once the conflict is over and we have a very cohesive team, we are all set to lay the ground for the moving that is strategically in terms of applying our capabilities and core competencies and optimizing our resources toward any program that is at hand. So in other words, it again is the strong culture which helps us achieve all that. Before we carry out the SWOT analysis, we once again have to understand the whole process that we have learned so far with the help of a graphical presentation because that basically is going to form the basis for internal analysis. And internal analysis is all about what is desired and therefore we've got to be very clear about the fact. To what extent we are in a position to apply our capabilities and to use core competencies toward building a competitive advantage. The ultimate objective of any organization, again, whether it be a commercial organization or an NPO, is to develop a sustainable, competitive advantage. And to do that, we have to count on all those concepts that we have learned so far but then to see if we need to develop certain connections and learn why those are so much important in connection with each other. How the whole that is created, by those factors coming together, is greater than the sum of their parts. Let's take a look at the graphical presentation and see how the whole thing works. As you can see from the slide, that the whole process starts with the strategic intent and this is something that I pointed out earlier also. But the strategic intent is a function of our resources, our capabilities and core competencies and we've got to see to it that the capabilities and core competencies are applied in a way that resources could be optimized. Now, when I say this, I have to tell you that there's a difference between capabilities and core competencies. This is something that we did not touch earlier. All capabilities are not core competencies because those capabilities are also possessed by your competitors, meaning other organizations operating in the similar area and therefore those capabilities, however good and however up-to-date those may be, but those are not core competencies until the point you really can create a differentiation, meaning a point of differentiation which cannot be copied by your competitors, which cannot be followed even if the try by your competitors. In the first place, it has got to be so distinct that your competitors do not even attempt to follow you until a certain point when they think they are ready to follow you. Here, you again have to come up with a combination of core competencies by making certain adjustments that you again come up with a certain level of differentiation with which sets you apart from your competitors. Now, we should be very clear about this fact that you can optimize your resources and apply the capabilities and core competencies in the most optimal way only if you have a very strong culture. And that is why I talked about the concept of culture and that is why it is so important because without a strong culture, there is absolutely no way that you really can have the differentiation that you desire to have and put in place and set yourself apart. A strong culture is going to enable you to achieve your goals. It is not how finally you define your strategic direction by putting together very fine objectives and specifying some very sharp goals. It is not that. They are not really going to help you until the time the organization has a very strong culture and the strong culture that becomes a way of life in such a way that people work voluntarily as a natural behavior. So this is the beauty of a strong culture and this is the kind of contribution a strong culture makes towards your strategic intent and also building your core competencies. The core competencies cannot be built until the time that you have a strong culture. The team has got to be cohesive. They all have to be on the same page and rather on the same line in order for the organization to move forward and it is only through that that core competencies are going to be built with the help of certain level of differentiation. Once you have built the core competencies you are all set to develop your competitive advantage and competitive advantage is something which should not be, or rather could not be copied by your competitors and that is why you call it sustainable competitive advantage. There are certain conditions to which they make competitive advantage rather sustainable and we've got to take a look at those conditions. The one is, as you can see from the slide, the valuable capabilities. In other words, you have to have capabilities to which you can ward off and neutralize threats in the external environment. If you have those capabilities you are adding value to the organization. The next conditionality is non-substitutable capabilities. These are the capabilities which do not really have strategic equivalents. In other words, you develop these capabilities through your relationships with all the stakeholders. In other words, you develop a network of constituents in a way that your competitors cannot see that. These capabilities are invisible because your relationships are very sacred and your stakeholders and all the constituents, they trust you. Now this is not something the way you can show your competitors and again it is not something which they can easily copy and therefore this becomes kind of a sustainable advantage for the organization. Another dimension to this particular non-substitution is the complexity of the social relationships. The reason I call it the socially complex relations because again nobody can develop the relations the way you have developed because there are certain dynamics which you follow and those are the intangibles which cannot be felt or seen by your competition and that's why we call such capabilities as non-substitutable. The next conditionality is rare capabilities. As the terminology suggests, these capabilities are rare in terms of offering you the point of differentiation and that is why we call them rare. Yet another conditionality is costly to imitate capabilities. Well, these are the capabilities which are extremely hard for the competition to follow or imitate because these basically stem from a historical perspective. You have a certain level of experience and you have the corporate memory and the corporate knowledge that you have developed over a certain period of time and the way that you have done all that it is not really possible for anybody else to follow that and therefore we call them costly to imitate capabilities. Once we have developed the understanding of this process which basically is about building competitive advantage through strategic capabilities, we are all set to carry out the internal analysis of the organization because we are now in a position to build a competitive advantage with the help of very fine application of our capabilities and core competencies and an optimal exploitation of the resources that we have at our disposal. So once we are done with the internal analysis because we know what are the strengths and what weaknesses are and not every company has strengths all the time. So talking about this internal analysis and developing the competitive advantage does not mean that your organization will never have weaknesses. As a matter of fact, it is a question of formulating the right strategies on the basis of these strengths and weaknesses that you come up with a beautiful analysis. So in other words, once you are done with the internal analysis in terms of its strengths and weaknesses, the way of the objective of course is to define some competitive advantage because without that, you're going to have competitive parity and if you have competitive parity, you're as good or as bad as competition because you do not really have something which cannot be imitated or which cannot be copied. Everything can be followed by them. They will limitate you, they will copy you and you'll be as good as them and that's what you call competitive parity. You've got to get out of that phase and get into competitive advantage and that is why I'm rubbing in the point of competitive advantage and exploiting your strengths again and again but at the same time, we all have weaknesses. Once done with the internal analysis, the NPO is onto the external analysis which is about the external environment and I did talk about in one of the components earlier as to what really are the segments of the external environment. So having confidence that we all know what that environment is and what are those segments, we are rather should be all set to carry out the analysis of the external environment and to determine what really are the threats and what are the opportunities that the external environment offers and depending again on our strengths that we have to seize those opportunities. Here the one thing comes in addition to the segments of the external environment in the context of the NPO's and that is that NPO's could have to deal with a few external publics which commercial organizations do not really have to and these external publics that have their input to make, important input to make and therefore we should take a quick look at what these publics are. A public basically is a group of people or organization or both whose needs in some way have to be served by the NPO. That is what you call a public. So let me take you to the slide and show you different publics that NPO's deal with. As you can see from this presentation, the classification of the publics is done into input publics which consists of funders, donors, suppliers and regulators. Then we have internal publics that consists of board of directors, could the management staff volunteers and the fact is that we have a pretty good understanding of all these publics. The only thing is we now have to put their roles into a proper perspective while we analyze the environment externally. And then we have the next publics that is the partners. We have other NPO's. I have showed you with the help of examples. You may like to get into distribution, joint venture with some organization that specializes in that. Then you have other corporations that you may like to get into cost marketing relationships. Then you have traders, you have government agencies. The fourth publics is classified as consuming publics. You know, customers, activists and advocates. Well, these are the broad categories and in one particular context you can make further classifications and subclassifications. But the important thing about all this is that input publics right on the top supply resources that are utilized by the internal publics, which is the second stage, helped by the partners, which is the third stage and consumed by the designated publics, that is the consuming publics. And that's where the target market lies. With this understanding, all I can say is that we have laid the ground for carrying out the analysis which is going to be about the four elements of it. Strengths, weaknesses, opportunities and threats. We can ask ourselves some very pinpointed questions on all these four elements and get the answers. The trick here is, or rather the underlying condition here is that the management of the organization has got to be very honest and objective in carrying out the analysis so that it really can determine its strengths as well as weaknesses and seize upon the opportunities which the external environment offers. At the same time, it should be in a position to neutralize all those threats that the external environment carries in it. Thanks.