Free iBakery: How a Hong Kong NGO Ventures into Social Enterprise Case Study Solution | Assignment Help

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Publish Date: 2024-11-01

Harvard Case - iBakery: How a Hong Kong NGO Ventures into Social Enterprise

"iBakery: How a Hong Kong NGO Ventures into Social Enterprise" Harvard business case study is written by Sammy Fung, Floerence Chan, W.H. Lo. It deals with the challenges in the field of Social Enterprise. The case study is 22 page(s) long and it was first published on : Dec 13, 2012

At Fern Fort University, we recommend iBakery adopt a hybrid organizational structure to maximize its social impact while ensuring financial sustainability. This structure leverages the strengths of both non-profit and for-profit models, allowing iBakery to continue its mission of providing vocational training and employment opportunities for individuals with disabilities while expanding its reach and generating revenue through a social enterprise arm.

2. Background

iBakery is a Hong Kong-based non-governmental organization (NGO) dedicated to empowering individuals with disabilities through vocational training and employment opportunities. Founded in 2008, iBakery has successfully trained and employed over 100 individuals, demonstrating its commitment to social inclusion and corporate social responsibility. However, iBakery faces financial challenges due to its reliance on donations and government grants. This case study examines iBakery's decision to venture into social enterprise as a means to achieve financial sustainability and expand its impact.

The main protagonists of the case study are:

  • Irene Chan: Founder and Executive Director of iBakery, passionate about creating opportunities for individuals with disabilities.
  • The iBakery Board: Responsible for overseeing the organization's strategic direction and financial stability.
  • The iBakery Staff: Dedicated to providing quality training and support to individuals with disabilities.
  • The iBakery Beneficiaries: Individuals with disabilities who benefit from iBakery's programs and employment opportunities.

3. Analysis of the Case Study

This case study can be analyzed through the lens of social entrepreneurship, specifically focusing on the intersection of nonprofit organizations and social enterprise. iBakery's decision to venture into social enterprise presents a unique opportunity to explore the potential for shared value creation and impact investing.

Strategic Framework:

  • Mission-Driven Strategy: iBakery's mission is to empower individuals with disabilities through vocational training and employment opportunities. This mission serves as the foundation for all its decisions, including the venture into social enterprise.
  • Triple Bottom Line: iBakery aims to achieve a triple bottom line of social, environmental, and financial sustainability. This framework guides its decision-making and ensures that its social impact is not compromised in pursuit of financial goals.
  • Stakeholder Theory: iBakery recognizes its responsibility to its various stakeholders, including beneficiaries, staff, donors, and the wider community. The social enterprise venture must consider the needs and interests of all stakeholders.

Financial Analysis:

  • Revenue Generation: The social enterprise arm will generate revenue through the sale of baked goods and catering services. This revenue will help offset operating costs and provide financial stability for iBakery.
  • Impact Investing: iBakery can attract impact investors who seek to invest in businesses with a social mission. This can provide additional funding for expansion and program development.
  • Social Return on Investment (SROI): iBakery can measure the social impact of its social enterprise venture through SROI analysis. This will demonstrate the value generated for beneficiaries and the community.

Marketing Analysis:

  • Market Segmentation: iBakery can target different market segments, including individuals seeking high-quality baked goods, businesses requiring catering services, and organizations interested in supporting social enterprises.
  • Brand Positioning: iBakery can position itself as a socially responsible business that provides high-quality products and services while creating positive social impact.
  • Social Media Marketing: iBakery can leverage social media platforms to promote its social enterprise and engage with potential customers and investors.

Operational Analysis:

  • Business Model Innovation: iBakery needs to develop a sustainable business model for its social enterprise arm. This model should be scalable and adaptable to changing market conditions.
  • Partnership Development: iBakery can partner with other organizations, such as suppliers, retailers, and NGOs, to expand its reach and access new markets.
  • Operational Efficiency: iBakery needs to ensure operational efficiency to maximize profitability and minimize waste. This includes optimizing production processes, managing inventory, and controlling costs.

4. Recommendations

iBakery should adopt a hybrid organizational structure consisting of a non-profit arm and a social enterprise arm. This structure will allow iBakery to maintain its focus on social impact while generating revenue through its social enterprise.

Specific Recommendations:

  1. Establish a Separate Social Enterprise Entity: Create a separate legal entity for the social enterprise arm, allowing for greater flexibility in operations and fundraising. This entity can be structured as a benefit corporation or a B Corporation to demonstrate its commitment to social and environmental responsibility.
  2. Develop a Sustainable Business Model: iBakery should develop a sustainable business model for its social enterprise arm, focusing on shared value creation. This model should emphasize the production of high-quality baked goods and catering services while prioritizing the employment of individuals with disabilities.
  3. Invest in Marketing and Branding: iBakery needs to invest in marketing and branding to promote its social enterprise and attract customers. This includes developing a strong brand identity, leveraging social media platforms, and partnering with local businesses and organizations.
  4. Seek Impact Investors: iBakery should actively seek impact investors who are interested in supporting social enterprises with a strong social mission. These investors can provide capital for expansion and program development.
  5. Measure Social Impact: iBakery should implement a robust social impact measurement framework to track the impact of its social enterprise venture. This will demonstrate the value generated for beneficiaries and the community.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  1. Core Competencies and Consistency with Mission: The hybrid organizational structure aligns with iBakery's core competencies in vocational training and employment while allowing for revenue generation through a social enterprise arm. This structure ensures consistency with iBakery's mission to empower individuals with disabilities.
  2. External Customers and Internal Clients: The social enterprise arm will cater to both external customers seeking high-quality baked goods and catering services and internal clients, the beneficiaries of iBakery's programs. This approach ensures that the social enterprise benefits both the community and individuals with disabilities.
  3. Competitors: iBakery can differentiate itself from competitors by focusing on its social mission and emphasizing the employment of individuals with disabilities. This will attract customers who value social responsibility and ethical business practices.
  4. Attractiveness - Quantitative Measures: The social enterprise venture can be assessed based on its financial viability, including revenue generation, profitability, and return on investment. iBakery can also measure the social impact of its venture through SROI analysis.

6. Conclusion

iBakery's decision to venture into social enterprise presents a unique opportunity to achieve financial sustainability and expand its social impact. By adopting a hybrid organizational structure, developing a sustainable business model, and seeking impact investors, iBakery can create a successful social enterprise that empowers individuals with disabilities while generating positive social and financial returns.

7. Discussion

Other alternatives not selected include:

  • Merging with a For-Profit Company: This option could provide immediate access to resources and expertise but could compromise iBakery's control and mission.
  • Remaining Solely a Non-Profit: This option would maintain iBakery's focus on social impact but would continue to rely on donations and grants, limiting its growth potential.

Risks and Key Assumptions:

  • Market Demand: The success of the social enterprise depends on the demand for its products and services. iBakery needs to conduct thorough market research to ensure the viability of its business model.
  • Operational Efficiency: iBakery must achieve operational efficiency to ensure profitability. This requires careful planning, cost control, and efficient production processes.
  • Impact Measurement: Measuring social impact can be challenging. iBakery needs to develop a robust framework to track the impact of its social enterprise venture.

8. Next Steps

  • Develop a Detailed Business Plan: iBakery should develop a comprehensive business plan for its social enterprise arm, outlining its mission, target market, business model, financial projections, and social impact measurement plan.
  • Seek Legal and Financial Advice: iBakery should consult with legal and financial professionals to ensure compliance with regulations and secure funding for the social enterprise venture.
  • Build a Strong Team: iBakery needs to build a strong team with expertise in business operations, marketing, and social impact measurement.
  • Pilot Launch: iBakery should pilot launch its social enterprise in a limited capacity to test its business model and gather feedback from customers and stakeholders.
  • Scale Up: Based on the success of the pilot launch, iBakery can scale up its social enterprise by expanding its product offerings, opening new locations, and seeking additional funding.

By implementing these recommendations and taking a strategic approach to its social enterprise venture, iBakery can achieve its mission of empowering individuals with disabilities while creating a sustainable and impactful business.

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Case Description

iBakery is the name of two social enterprises ("SEs")-a bakery shop and a café-established by Tung Wah Group of Hospitals (TWGH) of Hong Kong with a social mission to train and employ people with disabilities through the production and retailing of bakery products and the operation of a café. The SEs originated from a bakery workshop that trained people with disabilities. In running the SEs, more business elements have been introduced to try to fulfil both social and economic goals. iBakery is unique among SEs operated by Hong Kong's non-governmental organisations ("NGOs") in that it has a group of business professionals, called "iBakery Angels", forming an advisory board. With TWGH as their strong backup, the iBakery SEs are striving to meet the double bottom line. The SEs' performance in meeting the economic goal is far from satisfactory, as they are presently loss-making operations; however, they are achieving good performance in meeting the social mission when measured in terms of the Social Impact Assessment Tool. This case sheds light on the operations of SEs, how they attempt to strike a balance on both economic and social goals, and how performance measurement of social enterprises may be conducted. It also allows students to examine what the SEs should do to achieve sustainability in the future.

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