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A process of strategic positioning (what kind of organisation do we want to be in a changed context in x years; read: strategic positioning.) may show that sticking to the actual strategy of the organisation may lead to dropping behind, against the wishes of stakeholders*. The question then arises what could be done to keep the results of the organisation on a desired level.
The organisation has to look for strategic possibilities of choice:
These strategies are derived from commercial organisation, aimed at profit and taking care of the (above all financial) interests of the stakeholders.
But with a bit of fantasy these market mechanisms can also be applied to NGO's, as long as the different needs of the stakeholders are recognised and the values of the organisation are respected.
The three strategies could be translated as follows:
A NGO that really wants to respond to the problems in society (and thereby wanting to survive as a NGO) has constantly to improve its output, outcome and impact.
One of the forms of strategy is to strive for reducing cost price, or to improve products, differentiating products or services in such a way that they reach an uniqueness, perfectly matching the desires of the target group (Porter). Analysing costs drivers and uniqueness drivers** is the base for methods to reduce the costs and to strengthen the uniqueness. Features of uniqueness of market organisations (in the eyes of the consumer) are characteristics of the product or service, the service to the consumers, timing of delivery etc. For NGO's the uniqueness may be defined by the priorities of the target group, probably always related to the effectiveness of the product or service, such as alleviation of suffering, strengthening autonomy, regaining dignity. Everything in order to foster socially just, sustainable economies with accountable, inclusive systems of governance.
Quality management can be a main instrument in this strategy.
(Read: Fowler: striking a balance. Earthscan, London 2000. Especially the chapters: Improving and going on.)
A well known matrix is that of product/market matrix (Ansoff), in which two strategies of growth are presented: expansion and diversification.
Two dimensions are used, one of products and the other of markets. Each dimension can be differentiated in the categories existing and new. In this way four combinations show up: existing markets and new markets, existing products and new products. Spreading with existing products in existing markets is called: penetration of the markets. Spreading with new products in existing markets is called: product development. Spreading with existing products in new markets is called: market development. These three together are called: expansion strategies. The last one spreading with new products in new markets is called: diversification.
A simple rule is that penetrating new markets with new products is an activity full of risks and disappointments. A spreading strategy should only be contemplated after considering related products in existing markets, or existing products in related markets.
NGO's are founded to reach some societal goal. As long as success is not completely achieved, a NGO, analysing its products or services and the people for whom it is working, should always choose to reach and help more people of the chosen population. In terms of the management science: market penetration is the first choice. NGO's hardly ever will choose the strategy of diversification.
But a NGO can have good reasons to shift from the original key target group to other groups. These reasons have to be related to the content of the work, the necessity to reach more or other people and the expected efficacy of the shift.
A strategy of growth in this way can also reflect a development of vision.
An example is the treatment of perpetrators of sexual violence. Some NGO's, assisting victims of sexual violence and through the work mobilising politicians to change the law, may discover that in the long term nothing changes as long as the perpetrators of sexual violence are moved aside. Some of these NGO's developed a programme to reach and treat perpetrators. In terms of the spreading strategy they combined product development in a related market.
In the management literature operational strategies have to do with the choice of staying independent or cooperation with others.
If interested read: solution 9: cooperation with others.
* Stake holders are those who have an interest (=stake) in the organisation such as the clients, the workers, the funders, the board.
** Drivers are factors that cause an upward move.