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Harvard Case - CARE Kenya: Making Social Enterprise Sustainable

"CARE Kenya: Making Social Enterprise Sustainable" Harvard business case study is written by Pratima Bansal, Tom Ewart. It deals with the challenges in the field of Social Enterprise. The case study is 14 page(s) long and it was first published on : Nov 28, 2005

At Fern Fort University, we recommend CARE Kenya adopt a multi-pronged strategy to achieve sustainable growth and impact. This strategy focuses on strengthening their existing social enterprise model, expanding into new markets, and leveraging partnerships to increase their reach and financial sustainability.

2. Background

CARE Kenya is a non-profit organization operating in Kenya, focusing on poverty reduction and empowering women and girls. The organization launched a social enterprise, 'Kivazi,' to provide sustainable income opportunities for women in rural communities. Kivazi manufactures and sells environmentally friendly, locally sourced sanitary pads, addressing a critical need for women's health and hygiene. The case study highlights the challenges faced by Kivazi in achieving financial sustainability and scaling its impact.

The main protagonists of the case study are:

  • CARE Kenya: The non-profit organization with a mission to alleviate poverty and empower women.
  • Kivazi: The social enterprise owned by CARE Kenya, producing and selling sanitary pads.
  • Sarah: The dedicated manager of Kivazi, facing the challenge of balancing social impact with financial sustainability.

3. Analysis of the Case Study

Applying the Social Enterprise Value Chain Framework:

This framework helps analyze the various stages of a social enterprise's operations and identify potential areas for improvement.

  • Social Value Creation: Kivazi successfully addresses a critical need for women's health and hygiene in rural Kenya. They provide employment opportunities and empower women through economic independence.
  • Business Model: Kivazi's business model relies on selling sanitary pads at affordable prices to low-income women. However, the model faces challenges in achieving profitability and scaling up due to limited access to capital and marketing resources.
  • Impact Measurement: CARE Kenya has established a strong framework for measuring the social impact of Kivazi, tracking metrics like employment generated, women reached, and improved health outcomes.
  • Financial Sustainability: Kivazi struggles to achieve financial sustainability due to low profit margins, limited market reach, and dependence on grants.

Key Challenges:

  • Financial Sustainability: Kivazi faces challenges in generating sufficient revenue to cover its costs and achieve long-term financial viability.
  • Scaling Impact: Expanding Kivazi's operations to reach more women and communities requires significant investment and effective marketing strategies.
  • Competition: Kivazi faces competition from other sanitary pad manufacturers, including both for-profit and social enterprises.
  • Organizational Capacity: CARE Kenya needs to strengthen its internal capacity to manage and support Kivazi's growth effectively.

4. Recommendations

1. Strengthening the Existing Business Model:

  • Product Diversification: Introduce new product lines, such as reusable sanitary pads or other women's health products, to cater to diverse needs and increase revenue streams.
  • Cost Optimization: Implement cost-saving measures in manufacturing and distribution, leveraging local resources and exploring partnerships with suppliers.
  • Pricing Strategy: Conduct market research and refine pricing strategies to ensure affordability while maintaining profitability.
  • Improving Quality and Brand Awareness: Invest in quality control and build a strong brand identity to attract customers and differentiate Kivazi from competitors.

2. Expanding into New Markets:

  • Market Segmentation: Identify new market segments with high potential, such as urban areas with a growing demand for affordable and sustainable products.
  • Strategic Partnerships: Collaborate with NGOs, government agencies, and microfinance institutions to access new markets and expand outreach.
  • Digital Marketing: Utilize digital platforms and social media to reach a wider audience and build brand awareness.

3. Leveraging Partnerships for Growth:

  • Impact Investing: Seek investment from impact investors who prioritize social impact alongside financial returns.
  • Social Franchising: Develop a social franchising model to enable local entrepreneurs to operate Kivazi outlets in different regions, expanding reach and generating revenue.
  • Cross-Sector Partnerships: Collaborate with businesses in related industries, such as healthcare providers or educational institutions, to create synergistic opportunities.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core Competencies and Consistency with Mission: The recommendations align with CARE Kenya's mission to alleviate poverty and empower women by providing sustainable income opportunities and addressing critical health needs.
  • External Customers and Internal Clients: The recommendations focus on understanding customer needs, improving product quality, and building strong relationships with stakeholders.
  • Competitors: The recommendations consider the competitive landscape and aim to differentiate Kivazi through product innovation, branding, and strategic partnerships.
  • Attractiveness: The recommendations aim to enhance Kivazi's financial sustainability by increasing revenue, optimizing costs, and attracting impact investors.

Assumptions:

  • The Kenyan market has a growing demand for affordable and sustainable sanitary pads.
  • CARE Kenya has the capacity to implement the recommended changes effectively.
  • Impact investors are willing to invest in social enterprises with a strong track record of social impact.

6. Conclusion

By adopting a comprehensive strategy that strengthens its existing business model, expands into new markets, and leverages partnerships, CARE Kenya can achieve sustainable growth and scale the impact of Kivazi. This approach will enable the organization to fulfill its mission of empowering women and reducing poverty while ensuring the long-term viability of its social enterprise.

7. Discussion

Alternative Options:

  • Merging with a larger social enterprise: This could provide access to resources and expertise but might compromise CARE Kenya's control and autonomy.
  • Focusing solely on grant funding: This would limit Kivazi's growth potential and create dependence on external funding.

Risks and Key Assumptions:

  • Market demand: The success of the recommendations relies on the assumption that there is a sufficient market demand for Kivazi's products.
  • Financial sustainability: Achieving financial sustainability requires careful planning, execution, and ongoing monitoring.
  • Partnership effectiveness: The success of partnerships depends on strong communication, trust, and shared goals.

8. Next Steps

  • Develop a detailed implementation plan: Outline specific actions, timelines, and resources required for each recommendation.
  • Conduct market research: Gather data on consumer preferences, competitor analysis, and potential market segments.
  • Seek funding: Explore impact investment opportunities and secure funding for product development, marketing, and expansion.
  • Build partnerships: Initiate discussions with potential partners and establish clear agreements on roles and responsibilities.
  • Monitor progress: Regularly assess the impact of the implemented strategies and make adjustments as needed.

By taking these steps, CARE Kenya can ensure the long-term success of Kivazi and its mission to empower women and create a more sustainable future for rural communities in Kenya.

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Case Description

CARE's Rural Entrepreneurship and Agribusiness Promotion project is a new, market-driven approach to development in Kenya. Although the project has been successful from a development standpoint, it is not commercially viable. The sector manager must determine how to improve the project and make it commercially sustainable.

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