Competitive Analysis and Strategic Assessment

Competitive Analysis and Strategic Assessment

BUS 521 – Entrepreneurship and Innovation

Competitive Analysis, Differentiation Strategy, and Risk Assessment

The main competitors of The Reading Corner are public libraries and other nonprofit businesses that target literacy issues within the United States. Libraries are frequented more by low to middle income individuals who either do not have regular access to books or who do not have the means to purchase books on a regular basis, focusing most of their energy on individuals in their teenage years and younger, as well as families. Many libraries have been pushing family-friendly and kid-friendly programs and activities to help draw that targeted audience in more. Library pricing is low for the most part, as most libraries allow the very first library card free of charge. Later they charge $1 for every card they must replace after that. Typically, what can make a library expensive are the late fees, which vary from location to location, but no matter where they are located, the longer someone has something checked out past the due date, the higher the fine will be. Other nonprofit businesses targeting literacy issues within the United States are also competitors because they have the same focus, alleviating illiteracy in America one person at a time. Most nonprofits that focus on illiteracy focus their attention on children and families. These nonprofits target children and families because to combat illiteracy within the next generation, you must target those who will be leading the charge of the next generation, the children.

Because libraries and nonprofits have little to no direct cost to the consumer, what will differentiate The Reading Corner from others are the services. The Reading Corner will offer activities to draw families with younger children in. Activities such as story time, having family fun nights centered around a book series or book genre, and putting on plays so the children can see the book acted out in real life. The organization will also provide book clubs, open to those of all ages, but mostly focusing on young children to teenagers. Access to digital literacy will also be provided, since “families are increasing their access to digital media, but they lack the knowledge to use it effectively in a way that enables learning” (American Library Association, 2015, ¶2). The organization will partner up with schools, publishing houses, associations dealing with reading, local libraries, and product providers, such as computer manufacturers and electronic book readers.

Due to The Reading Corner being a brick and mortar location, there are numerous risks involved in the day to day operation of the business. Natural disasters, terrorism, utility outage, computer crash, and accidents. A computer crash or utility outage would affect the organization for a time until everything was able to be put back on track. Natural disasters, terrorism, and accidents would affect not only the organization, but the customers as well. In the event of natural disasters, terrorism, or accidents, the potential harm can be lessened if there are protocols in place that direct people on what to do in case of an emergency. One method of alleviating utility outages would be to have someone come by on a regular basis to ensure that everything is running smoothly. The harm from computer crashes can be eliminated by having the files backed up to a remote location so that they can be accessed at any time.

SWOT Analysis

Strengths of The Reading Corner are being mission oriented, family focused, and improvement focused. Mission oriented means that the organization is more concerned about ending illiteracy than it is about making money, having an impact on society. Family focused shows that the organization is concerned about the family unit in America and is willing to do what it can to ensure that it remains a strong unit by going through this journey together. While the focus is families, anyone who wants to improve themselves regarding reading can come and do so. Weaknesses of the organization are no brand recognition and the prevalence of illiteracy. Due to there being no brand recognition of the company, penetrating the market and making a mark will be more difficult to accomplish, but still doable. The prevalence of illiteracy is a weakness, simply due to the numerous other nonprofits in existence doing their part to end illiteracy in America, and around the world.

Threats to the organization include competition, technology, and societal norms. Due to the number of nonprofits in existence, penetrating the market will be difficult. Technology is rapidly changing, and if there are not people and strategies in place to help deal with the ever-changing world of technology, the organization can fall behind. Opportunities for the organization include the ability to end numerous injustices and decreasing the level of illiteracy. Lowering the level of illiteracy is the goal, and the creation of this nonprofit allows for the opportunity to make it a reality. By lowering illiteracy levels, numerous injustices will also be decreased. There have been numerous studies and research conducted looking at the effects illiteracy has on one’s life. Some shocking facts about illiteracy are: “nearly 85% of the juveniles who face trial in the juvenile court system are functionally illiterate, proving that there is a close relationship between illiteracy and crime;” “the rate of low literacy in the United States directly costs the healthcare industry over $70 million every year;” and “1 in 4 children in America grow up without learning how to read” (DoSomething, 2018, ¶2). In other words, “illiteracy keeps people trapped in a cycle of poverty and subjugation, limiting life choices and making it difficult to achieve social mobility” (The Room 241 Team, 2018, ¶8). This organization allows for the opportunity to raise the general population’s prospects.

Strategic Position

The Reading Corner’s position statement is: For those who want to make an impact in their community, The Reading Corner is a nonprofit that focuses on building the leaders of tomorrow, one book at a time. Since the organization’s goal is to increase literacy, the marketing message relates to their mission. Marketing message: You could be the next Mark Zuckerberg or Steve Jobs. To distribute the marketing content, numerous avenues will be used to get the word out to the public. Print media will be used by way of brochures and flyers shortly after conception, as well as advertisements in literary magazines and throughout literary associations, like the Association of American Publishers. Social media will also be used by way of blogs, and the popular social media sites like Facebook, Twitter, and Instagram. By disseminating the marketing content over these various avenues, the organization will be able to penetrate the market faster and have a greater reach than just doing one type of marketing over the other.

Types of Risks

Due to being a nonprofit, the organization faces some unique risks. Four risks that could adversely affect the organization are funding shortages, data breaches, reputation, and regulatory compliance. Funding is extremely important to a nonprofit, it is “a nonprofit’s lifeblood” (Insureon, 2018, ¶4). Funding can be affected by theft, fraud due to impersonation, and not raising enough money to successfully operate. Due to the permeation of technology, data breaches are becoming more and more of a reality. A data breach is “any incident that exposes sensitive data [of any kind]” (Insureon, 2018, ¶10). In every business reputation is everything, but that is even more so in nonprofits because they rely heavily on positive public opinion to continue obtaining donations. Regulatory compliance is necessary for nonprofits to maintain their tax-exempt status. If regulations are not followed fines can be incurred or the tax-exempt status could be forfeited. One way to mitigate these risks would be to develop a strong positive corporate culture. Developing the values that represent the organization will help get everyone onto the same page which could aid in boosting loyalty, helping recruit, attracting new customers, driving decision-making, and establishing a positive reputation (Abrams, R., 2017, p.319). Another way to mitigate these risks would be to develop strategies for the processes. Employing total quality management is one strategy to employ as it focuses on the internal standards and guidelines to reduce any errors or defects. A third way to mitigate the possible risks would be to backup all our information onto a third-party location as well as investing in “cyber liability insurance to cover data breach recovery costs” (Insureon, 2018, ¶12). Employing these tactics will aid in eliminating or reducing the possible risks.

References

Abrams, R. (2017). Entrepreneurship (2nd ed.). Palo Alto, CA: PlanningShop.

American Library Association. (2015). Public Library Use. Retrieved from

http://www.ala.org/tools/libfactsheets/alalibraryfactsheet06.

DoSomething. (2018). 11 Facts about Literacy in America. Retrieved from

https://www.dosomething.org/us/facts/11-facts-about-literacy-america.

Dwyer, K. (2018). 7 Critical Risks Facing Nonprofit Organizations. Retrieved from

http://riskandinsurance.com/7-critical-risks-facing-nonprofit-organizations/.

Insureon. (2018). Top 5 Risks for Nonprofits. Retrieved from

https://nonprofit.insureon.com/resources/publications/top-5-risks.

The Room 241 Team. (2018). Crisis Point: The State of Literacy in America. Retrieved from

https://education.cu-portland.edu/blog/education-news-roundup/illiteracy-in-america/.

Trombetta, S. (2017). 11 Organizations That Promote Literacy You Can Donate to Or Volunteer

At This Summer. Retrieved from https://www.bustle.com/p/11-organizations-that-promote-literacy-you-can-donate-to-volunteer-at-this-summer-66809.