Harvard Case - Nutrivida
"Nutrivida" Harvard business case study is written by John Carter Ickis, Andrea Prado, Beatriz Avalos. It deals with the challenges in the field of Social Enterprise. The case study is 25 page(s) long and it was first published on : Sep 11, 2018
At Fern Fort University, we recommend that Nutrivida adopt a hybrid organizational structure, leveraging elements of both for-profit and non-profit models to achieve sustainable growth and maximize social impact. This approach will enable Nutrivida to attract diverse funding sources, expand its reach, and create a more robust business model that balances financial sustainability with its social mission.
2. Background
Nutrivida is a social enterprise based in Guatemala, focused on improving the health and well-being of rural communities by providing nutritious food and promoting sustainable agricultural practices. Founded by two entrepreneurs, Nutrivida faces the challenge of scaling its operations while maintaining its social mission. The case study highlights the company's struggles with limited funding, operational challenges, and the need to balance profitability with social impact.
The main protagonists of the case are:
- Maria and Carlos: The founders of Nutrivida, driven by a strong social mission and entrepreneurial spirit.
- Nutrivida's staff: Dedicated individuals committed to improving the lives of rural communities.
- Local farmers: Beneficiaries of Nutrivida's programs, who rely on the company for income and access to better agricultural practices.
- Potential investors: Individuals and organizations interested in supporting Nutrivida's social mission, but seeking a return on investment.
3. Analysis of the Case Study
This case study can be analyzed through the lens of Social Entrepreneurship and Hybrid Organizational Structures.
Social Entrepreneurship: Nutrivida embodies the core principles of social entrepreneurship:
- Social Mission: Addressing a significant social problem (malnutrition and poverty) through innovative solutions.
- Market-Based Approach: Utilizing business principles and market mechanisms to achieve social impact.
- Triple Bottom Line: Focusing on financial sustainability, social impact, and environmental responsibility.
Hybrid Organizational Structures: Nutrivida's current model struggles to balance financial sustainability with its social mission. A hybrid structure offers a potential solution:
- Combining for-profit and non-profit elements: Allows Nutrivida to attract both traditional investors seeking financial returns and impact investors seeking social impact.
- Leveraging both market forces and philanthropic support: Enables Nutrivida to scale its operations and reach a wider audience.
- Creating a more robust business model: Provides greater financial stability and resilience in the face of market fluctuations.
4. Recommendations
Nutrivida should implement the following recommendations to achieve sustainable growth and maximize social impact:
- Adopt a Hybrid Organizational Structure: Create a separate for-profit entity focused on generating revenue through product sales and partnerships. This entity would be responsible for developing sustainable business models and attracting traditional investors. Simultaneously, maintain the existing non-profit entity to focus on social impact, community engagement, and attracting impact investors.
- Develop a Clear Impact Measurement Framework: Establish a robust system for measuring the social impact of Nutrivida's programs. This will provide evidence-based data to attract impact investors and demonstrate the value of Nutrivida's work.
- Expand Partnerships and Strategic Alliances: Seek partnerships with NGOs, government agencies, and international organizations to leverage their resources, expertise, and networks. This can include collaborations on research, program development, and fundraising.
- Invest in Marketing and Branding: Develop a strong brand identity that effectively communicates Nutrivida's mission, values, and impact. This will attract customers, investors, and partners.
- Implement a Growth Strategy: Focus on expanding Nutrivida's reach through targeted market segmentation, product diversification, and geographic expansion. This can include exploring new markets within Guatemala and potentially expanding to other developing countries.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The hybrid structure aligns with Nutrivida's core competencies in both social impact and business development. It also maintains the company's commitment to its social mission while ensuring financial sustainability.
- External Customers and Internal Clients: The recommendations address the needs of both external customers (rural communities) and internal clients (staff and farmers). By expanding operations and attracting investment, Nutrivida can better serve its customers and provide greater opportunities for its staff.
- Competitors: While Nutrivida faces competition from other NGOs and for-profit companies in the food and agriculture sector, the hybrid structure allows it to differentiate itself by offering a unique blend of social impact and business acumen.
- Attractiveness ' Quantitative Measures: The hybrid model offers a more attractive investment proposition for both traditional and impact investors. This can lead to increased funding, allowing Nutrivida to scale its operations and achieve greater impact.
6. Conclusion
By adopting a hybrid organizational structure, Nutrivida can unlock its full potential as a social enterprise. This approach will enable the company to achieve sustainable growth, maximize its social impact, and create a lasting legacy in improving the lives of rural communities in Guatemala.
7. Discussion
Other alternatives not selected include:
- Remaining solely a non-profit: This option limits Nutrivida's growth potential due to dependence on grants and donations. It also makes it challenging to attract talent and compete in the market.
- Becoming a fully for-profit company: This option risks compromising Nutrivida's social mission and potentially alienating impact investors.
Risks and key assumptions:
- Challenges in managing two separate entities: Requires careful coordination and communication between the for-profit and non-profit entities.
- Potential for conflict between financial and social goals: Requires strong leadership and a clear commitment to balancing both objectives.
- Attracting impact investors: Requires a strong track record of social impact and a clear impact measurement framework.
8. Next Steps
Nutrivida should take the following steps to implement the recommendations:
- Develop a detailed implementation plan: Outline specific actions, timelines, and resources required for each recommendation.
- Establish a dedicated team: Assemble a team with expertise in social entrepreneurship, business development, and impact measurement.
- Seek legal and financial advice: Consult with experts to ensure the hybrid structure is legally compliant and financially sound.
- Communicate the changes to stakeholders: Inform staff, farmers, investors, and partners about the new organizational structure and its benefits.
By taking these steps, Nutrivida can position itself for sustainable growth and create a lasting positive impact on the lives of rural communities in Guatemala.
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Case Description
Nutrivida was a social business created by an alliance between Florida Ice & Farm Co (FIFCO), a Costa Rican beer company, Yunus Social Business (YSB), an organization founded by Professor Muhammad Yunus, founder of Grameen Bank (the "bank to the poor") and Peace Nobel laureate. This new social enterprise intended to fight malnutrition, focusing specially in children under two and pregnant women living in extreme poverty. To fulfill its mission, Nutrivida developed a line of highly nutritional foods to sell at low prices at low-income neighborhoods in San José's metropolitan area. It also planned to expand its distribution nationwide and, eventually, to other countries in Central America and the Caribbean. By late 2016, Nutrivida still failed to break even and turn a profit. Part of Nutrivida's strategy hinged on product distribution via a "Mums for Nutrition" (MANU, for its acronym in Spanish) network. However, after operating for three years, this channel continued to have minimal sales. Nutrivida's general manager, Anne Marie Nouel, had to determine the steps to take to boost the organization's sales and what to do with its MANU network to make Nutrivida financially sustainable.
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