Strategic Issue one: How to Develop a Long Term Perspective of Financial Stability and Viability?

Strategic Issue One: How to develop a long term perspective of financial stability and viability?

Like many other not for profit and non government funded organisations, Red Nose could also face a state of financial unsustainability and instability because of a lack of long term financial strategic plan. The lack of such, would eventually have its negative influence on the Red Nose’s performance of delivering its services and supports effectively and efficiently, and achieving its ultimate goals.

The Power of Competitive Rivalry

To start with, in a business setting, Sands probably would be the biggest competitive rival to Red Nose. SANDS (Stillbirth and Neonatal Death Support) is an organisation that provides similar supportive services but with a focus on care and support for those bereaved parents and their families who experienced pregnancy or infants loss. In this regard, Red Nose and Sands became two rival organisations with very similar services that are provided to the same group of people (Johnson et al., 2014). The similarities between these two organisations are obvious, as both of them provide service and bereavement support to parents and families who have experienced the death of a baby or stillbirth. To be more specific, from the geographic perspective, both organisations provide a national wide 24/7 helpline along with their online platform accesses like live web chat and email to support those who needs help from different states and territories (Sids and Kids, 2016; SANDS, 2015).

However, when speaking of actual physical presence, Red Nose currently have five offices across Australia (Victoria, Queensland, Australian Capital Territory, New South Wales, and Western Australia), while SANDS now operates physically in South Australia, Victoria, Queensland and Tasmania, and just recently they announced their service expansion into New South Wales (Sids and Kids, 2016; SANDS, 2016). That is to say, there will be at least three overlapped areas or markets (VIC, QL, NSW), in which the two organisations will face each other’s competition or, to some extent, some cooperation. Moreover, as both of the organisations have made extension plans in the national wide for the following years, it would not be a surprise that they will encounter more competitions in the overlapped areas (Sids and Kids, 2016; SANDS, 2016).

Although, to some extent, Red Nose has been in collaboration with SANDS in some events like Walk to Remember, it does not change the fact that the overall pool of targeted customers or in other words, potential donors is rather limited in size (Sids and Kids, 2015). In regard with donors and funds, Porter’s Five Forces Framework is originally designed for for-profit companies, but in this case, the power of suppliers and the power of buyers could also be combined into one power as the power of funders (Johnson et al., 2014). That is because of the nature of these non profit organisations, which is to draw their resources (funds, accessibilities and services) from donors, large corporations or the governments to achieve their visions. On the other hand, the donors and funders would get either the supportive services they need, or a positive social presence through funding organisations like Red Nose to carry out influential activities. Further to this, the funders or any other supportive groups will put high emphasis on evaluation and demonstration of the performance of organisations like Red Nose because they will than decide whether to fund the organisation or not (Ramadan and Borgonovi, 2015). Since both Red Nose and SANDS’s income still largely rely on donations (account for 38.3% of the total revenue of Red Nose) and grants, it would be critical for both of them to secure current donors and to further seek for more resources (Sids and Kids, 2016). There is another factor for Red Nose to consider about is that although SANDS is currently operating a rather smaller organisation than Red Nose is, it is growing faster and faster in recent years. According to SANDS 2014-2015 Annual Report (2015), there were 2,100 requests for bereavement via a variety of platforms in 2014, a 23% increase compared to the last year; and a 95% increase in terms of information and resources distributed; a 266% increase of social media interaction with consumers; and a 32% increase of total income in 2015 compared with 2014. To sum up, under the competition with SANDS, Red Nose would probably encounter a decline of potential donors and overall revenue as audience targets are diverted. Thus, it is crucial for Red Nose to be prepared and to develop a long term flexible and sustainable financial strategy, which would eventually, enables Red Nose to reduce their reliance on donors and fundraisings.