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Harvard Case - BRAC in 2014

"BRAC in 2014" Harvard business case study is written by Tarun Khanna, Rachna Tahilyani, Reeti Roy, Aldo Sesia. It deals with the challenges in the field of Strategy. The case study is 26 page(s) long and it was first published on : Nov 19, 2014

At Fern Fort University, we recommend BRAC pursue a multi-pronged strategy focused on sustainable growth and impact maximization. This strategy leverages BRAC's core competencies in development and social impact, while embracing innovation and digital transformation to expand its reach and impact.

2. Background

BRAC, a leading international development organization, faced a pivotal moment in 2014. Its success in Bangladesh had established it as a global leader in poverty alleviation and empowerment. However, BRAC sought to scale its impact and expand its reach to new markets and sectors. This case study examines the challenges and opportunities BRAC faced in navigating this crucial transition.

The main protagonists of the case study are:

  • Dr. Muhammad Yunus: Founder of Grameen Bank and a key figure in the microfinance movement, who inspired BRAC's early work.
  • Sir Fazle Hasan Abed: Founder of BRAC, a visionary leader who guided the organization's growth and expansion.
  • BRAC leadership team: The team responsible for navigating the organization's strategic direction and operational decisions.

3. Analysis of the Case Study

SWOT Analysis:

Strengths:

  • Strong brand reputation: BRAC's commitment to social impact and its proven track record in poverty alleviation.
  • Deep expertise in development: Extensive experience in microfinance, education, healthcare, and other development sectors.
  • Strong organizational culture: A culture of innovation, collaboration, and social responsibility.
  • Extensive network and partnerships: Strong relationships with governments, NGOs, and other stakeholders.

Weaknesses:

  • Limited financial resources: Dependence on donor funding can limit BRAC's ability to scale its operations.
  • Organizational complexity: Managing a large and diverse organization with multiple programs and initiatives can be challenging.
  • Potential for mission drift: Maintaining focus on core mission while expanding into new areas.

Opportunities:

  • Emerging markets: Growing need for development programs in emerging economies.
  • Technological advancements: Leveraging technology to enhance program delivery and reach.
  • Increased donor interest: Growing global awareness of development challenges and a desire for impactful solutions.

Threats:

  • Economic instability: Global economic downturns can impact donor funding and program sustainability.
  • Competition from other NGOs: Increasing competition for resources and market share.
  • Political instability: Political unrest in target countries can disrupt program operations.

Porter's Five Forces:

  • Threat of new entrants: High, as the development sector is relatively open to new players.
  • Bargaining power of buyers: Low, as beneficiaries of BRAC's programs are often vulnerable and have limited choices.
  • Bargaining power of suppliers: Moderate, as BRAC relies on various suppliers for program delivery.
  • Threat of substitutes: Moderate, as alternative development programs and solutions exist.
  • Rivalry among existing competitors: High, as the development sector is increasingly competitive.

Value Chain Analysis:

BRAC's value chain consists of:

  • Research and development: Identifying development needs and designing effective programs.
  • Program delivery: Implementing programs through a network of staff and partners.
  • Monitoring and evaluation: Assessing program impact and effectiveness.
  • Fundraising and resource mobilization: Securing funding to support program operations.
  • Communication and advocacy: Raising awareness of development challenges and promoting BRAC's work.

Business Model Innovation:

BRAC's business model innovation focused on:

  • Social enterprise: Integrating social impact with commercial activities to create sustainable revenue streams.
  • Digital transformation: Utilizing technology to improve program delivery, reach, and efficiency.
  • Diversification: Expanding into new sectors and markets to increase impact and sustainability.

Corporate Governance:

BRAC's strong corporate governance framework ensured transparency, accountability, and ethical practices, fostering trust among stakeholders.

Strategic Planning:

BRAC's strategic planning process involved:

  • Scenario planning: Considering various future scenarios to develop robust strategies.
  • Stakeholder analysis: Identifying and engaging with key stakeholders to ensure alignment.
  • Strategic positioning: Defining BRAC's unique value proposition and competitive advantage.

Market Segmentation:

BRAC targeted specific segments within its chosen markets, focusing on:

  • Vulnerable populations: Women, children, and marginalized communities.
  • Rural areas: Areas with limited access to essential services.
  • Emerging economies: Countries with high poverty rates and significant development needs.

Blue Ocean Strategy:

BRAC pursued a blue ocean strategy by:

  • Creating new markets: Expanding into new sectors and regions.
  • Differentiation: Offering unique and impactful development solutions.
  • Value innovation: Creating new value for beneficiaries and stakeholders.

Disruptive Innovation:

BRAC embraced disruptive innovation by:

  • Developing innovative programs: Introducing new approaches to address development challenges.
  • Utilizing technology: Leveraging technology to improve program delivery and reach.
  • Challenging conventional practices: Seeking new and effective solutions to traditional development problems.

Balanced Scorecard:

BRAC used a balanced scorecard to measure its performance across four key perspectives:

  • Financial: Ensuring financial sustainability and impact.
  • Customer: Delivering value to beneficiaries and stakeholders.
  • Internal processes: Optimizing program delivery and organizational efficiency.
  • Learning and growth: Fostering innovation, knowledge sharing, and organizational development.

Core Competencies:

BRAC's core competencies included:

  • Program design and implementation: Expertise in developing and delivering effective development programs.
  • Community engagement: Building strong relationships with communities and fostering participation.
  • Capacity building: Empowering communities and individuals through training and skills development.
  • Data collection and analysis: Utilizing data to monitor program impact and make informed decisions.

Diversification:

BRAC diversified its operations by expanding into new sectors, including:

  • Education: Providing quality education to underserved communities.
  • Healthcare: Delivering essential healthcare services to rural areas.
  • Agriculture: Promoting sustainable agricultural practices and food security.
  • Financial inclusion: Providing access to financial services for marginalized populations.

Vertical Integration:

BRAC pursued vertical integration by:

  • Developing its own institutions: Establishing schools, hospitals, and financial institutions.
  • Controlling key aspects of program delivery: Managing its own staff and resources.

Horizontal Integration:

BRAC engaged in horizontal integration by:

  • Partnering with other NGOs: Collaborating with other organizations to achieve shared goals.
  • Establishing strategic alliances: Forming partnerships with governments, businesses, and other stakeholders.

Strategic Alliances:

BRAC formed strategic alliances with:

  • Governments: Collaborating with governments to implement development programs.
  • Businesses: Partnering with businesses to create social enterprises and generate sustainable revenue.
  • Other NGOs: Working with other organizations to leverage resources and expertise.

Outsourcing:

BRAC outsourced certain functions, such as:

  • IT services: Utilizing external IT providers for technology infrastructure and support.
  • Fundraising: Engaging with fundraising consultants to secure donor funding.

Globalization Strategies:

BRAC adopted globalization strategies by:

  • Expanding into new markets: Establishing operations in countries beyond Bangladesh.
  • Adapting programs to local contexts: Tailoring programs to meet the specific needs of each country.
  • Building partnerships with international organizations: Collaborating with global institutions to achieve shared goals.

Product Differentiation:

BRAC differentiated its programs by:

  • Focusing on impact: Emphasizing the social impact of its programs.
  • Utilizing innovative approaches: Employing new and effective methodologies.
  • Building strong community relationships: Fostering trust and engagement with beneficiaries.

Cost Leadership:

BRAC aimed for cost leadership by:

  • Optimizing program delivery: Utilizing efficient and effective program models.
  • Leveraging technology: Utilizing technology to reduce costs and improve efficiency.
  • Managing resources effectively: Utilizing resources responsibly and maximizing impact.

Market Penetration:

BRAC pursued market penetration by:

  • Expanding its reach within existing markets: Increasing the number of beneficiaries served.
  • Strengthening its presence in key locations: Expanding its operations in areas with high development needs.

Market Development:

BRAC engaged in market development by:

  • Entering new markets: Expanding its operations into new countries and regions.
  • Identifying new target segments: Targeting new populations with unmet development needs.

Product Development:

BRAC invested in product development by:

  • Developing new programs: Creating innovative solutions to address emerging development challenges.
  • Improving existing programs: Continuously refining and enhancing its program offerings.

Resource-Based View:

BRAC leveraged its unique resources and capabilities, including:

  • Human capital: A dedicated and experienced workforce.
  • Organizational culture: A culture of innovation, collaboration, and social responsibility.
  • Brand reputation: A strong reputation for social impact and effectiveness.

Dynamic Capabilities:

BRAC demonstrated dynamic capabilities by:

  • Adapting to changing environments: Responding to evolving development needs and market dynamics.
  • Developing new capabilities: Continuously learning and adapting to new challenges and opportunities.
  • Transforming its operations: Embracing innovation and digital transformation to improve efficiency and impact.

Scenario Planning:

BRAC engaged in scenario planning to:

  • Anticipate future challenges: Identifying potential risks and opportunities.
  • Develop contingency plans: Creating alternative strategies to address unforeseen circumstances.
  • Ensure strategic flexibility: Adapting to changing conditions and seizing new opportunities.

Stakeholder Analysis:

BRAC conducted stakeholder analysis to:

  • Identify key stakeholders: Identifying individuals and organizations with an interest in BRAC's work.
  • Understand stakeholder needs: Recognizing the expectations and priorities of each stakeholder group.
  • Build relationships with stakeholders: Fostering trust and collaboration with key stakeholders.

Strategic Positioning:

BRAC's strategic positioning focused on:

  • Social impact: Emphasizing its commitment to poverty alleviation and empowerment.
  • Innovation: Utilizing innovative approaches to address development challenges.
  • Sustainability: Ensuring the long-term viability of its programs and operations.

Business Ecosystem:

BRAC operated within a complex business ecosystem, including:

  • Governments: Partnering with governments to implement development programs.
  • Businesses: Collaborating with businesses to create social enterprises and generate sustainable revenue.
  • Other NGOs: Working with other organizations to leverage resources and expertise.
  • Donors: Securing funding from various donors to support program operations.

Game Theory in Strategy:

BRAC applied game theory principles to:

  • Understand competitor behavior: Analyzing the strategies of other NGOs and development organizations.
  • Develop strategic responses: Formulating effective strategies to compete in the development sector.
  • Maximize impact: Optimizing its programs and operations to achieve the greatest social impact.

Strategic Leadership:

BRAC's leadership team demonstrated:

  • Visionary leadership: Setting a clear vision for the organization's future.
  • Strategic thinking: Developing long-term strategies to achieve organizational goals.
  • Effective communication: Communicating the organization's vision and strategy to stakeholders.

Change Management:

BRAC implemented change management processes to:

  • Adapt to changing environments: Responding to evolving development needs and market dynamics.
  • Embrace innovation: Implementing new technologies and approaches.
  • Manage organizational change: Leading the organization through periods of transformation.

Organizational Culture:

BRAC's organizational culture fostered:

  • Innovation: Encouraging creativity and experimentation.
  • Collaboration: Promoting teamwork and knowledge sharing.
  • Social responsibility: Emphasizing the organization's commitment to social impact.

Strategic Implementation:

BRAC's strategic implementation involved:

  • Developing action plans: Translating strategic goals into actionable steps.
  • Monitoring progress: Tracking the implementation of strategic initiatives.
  • Making adjustments: Adapting strategies based on performance data and changing circumstances.

Benchmarking:

BRAC engaged in benchmarking to:

  • Compare its performance: Assessing its performance against other NGOs and development organizations.
  • Identify best practices: Learning from successful organizations in the development sector.
  • Continuously improve: Identifying areas for improvement and enhancing program effectiveness.

Strategic Control:

BRAC implemented strategic control mechanisms to:

  • Monitor performance: Tracking progress towards strategic goals.
  • Identify deviations: Recognizing instances where actual performance deviates from planned targets.
  • Take corrective action: Adjusting strategies and operations to address performance gaps.

PESTEL Analysis:

Political:

  • Political stability: Political instability in target countries can disrupt program operations.
  • Government policies: Government policies can impact the development sector and BRAC's operations.

Economic:

  • Economic growth: Economic growth can create opportunities for development programs.
  • Donor funding: Economic downturns can impact donor funding and program sustainability.

Social:

  • Demographic trends: Population growth and urbanization can create new development challenges.
  • Social values: Changing social values can influence the demand for development programs.

Technological:

  • Digital transformation: Technology can enhance program delivery, reach, and efficiency.
  • Innovation: Technological advancements can create new opportunities for development solutions.

Environmental:

  • Climate change: Climate change can exacerbate poverty and create new development challenges.
  • Sustainability: Increasing demand for sustainable development programs.

Legal:

  • Regulatory frameworks: Legal frameworks can impact the development sector and BRAC's operations.
  • Compliance: Ensuring compliance with relevant laws and regulations.

Industry Lifecycle:

The development sector is in a mature stage of its lifecycle, characterized by:

  • Increased competition: Growing number of NGOs and development organizations.
  • Focus on impact: Emphasis on measuring and demonstrating program impact.
  • Innovation and technology: Adoption of new technologies and approaches.

Strategic Groups:

BRAC competes within a strategic group of large, international NGOs focused on poverty alleviation and empowerment. This group is characterized by:

  • Strong brand reputation: Established track records and recognized expertise.
  • Global reach: Operating in multiple countries and regions.
  • Focus on impact: Commitment to measurable and sustainable impact.

Value Proposition:

BRAC's value proposition is based on its:

  • Commitment to social impact: Delivering effective and impactful development programs.
  • Expertise in development: Proven track record in poverty alleviation and empowerment.
  • Strong organizational culture: A culture of innovation, collaboration, and social responsibility.

Business Portfolio Analysis:

BRAC can utilize a business portfolio analysis, such as the BCG matrix, to:

  • Assess the performance of its programs: Identifying programs with high growth potential and those requiring strategic adjustments.
  • Allocate resources effectively: Directing resources towards programs with the greatest potential for impact.
  • Optimize its portfolio: Balancing programs with different growth and market share characteristics.

Ansoff Matrix:

BRAC can use the Ansoff matrix to guide its growth strategy by considering:

  • Market penetration: Expanding its reach within existing markets.
  • Market development: Entering new markets and target segments.
  • Product development: Creating new programs and solutions.
  • Diversification: Expanding into new sectors and industries.

Strategic Intent:

BRAC's strategic intent is to:

  • Alleviate poverty and empower communities: Achieving its core mission of poverty alleviation and social development.
  • Scale its impact: Expanding its reach and impact to new markets and sectors.
  • Become a global leader in development: Establishing itself as a leading organization in the development sector.

Sustainable Competitive Advantage:

BRAC's sustainable competitive advantage is based on:

  • Its strong brand reputation: Recognized for its commitment to social impact and effectiveness.
  • Its deep expertise in development: Extensive experience in poverty alleviation and empowerment.
  • Its strong organizational culture: A culture of innovation, collaboration, and social responsibility.

Strategic Flexibility:

BRAC demonstrates strategic flexibility by:

  • Adapting to changing environments: Responding to evolving development needs and market dynamics.
  • Embracing innovation: Utilizing new technologies and approaches.
  • Managing organizational change: Leading the organization through periods of transformation.

Corporate Social Responsibility:

BRAC's commitment to corporate social responsibility is evident in:

  • Its mission and values: Focusing on poverty alleviation and social development.
  • Its program design and implementation: Ensuring ethical and responsible program delivery.
  • Its transparency and accountability: Maintaining high standards of transparency and accountability.

Digital Transformation Strategy:

BRAC's digital transformation strategy focuses on:

  • Leveraging technology: Utilizing technology to enhance program delivery, reach, and efficiency.
  • Improving data collection and analysis: Utilizing data to monitor program impact and make informed decisions.
  • Building digital capacity: Developing the skills and infrastructure to effectively utilize technology.

Strategic Foresight:

BRAC engages in strategic foresight by:

  • Anticipating future trends: Identifying emerging development challenges and opportunities.
  • Developing long-term strategies: Planning for the future and adapting to changing conditions.
  • Ensuring organizational resilience: Preparing for potential disruptions and adapting to unforeseen circumstances.

4. Recommendations

BRAC should pursue a multi-pronged strategy focused on sustainable growth and impact maximization. This strategy should include:

  1. Expanding into new markets: BRAC should prioritize entering new markets with high development needs, such as Sub-Saharan Africa, South Asia, and Latin America. This expansion should be guided by thorough market research and a careful assessment of the political, economic, and social environment.
  2. Diversifying its program portfolio: BRAC should expand its program portfolio to include new sectors, such as climate change adaptation, renewable energy, and digital literacy. This diversification will allow BRAC to address emerging development challenges and create new revenue streams.
  3. Embracing digital transformation: BRAC should fully embrace digital transformation to enhance program delivery, reach, and efficiency. This includes leveraging technology for data collection, monitoring and evaluation, communication, and fundraising.
  4. Developing innovative programs: BRAC should continue to develop innovative programs that address emerging development challenges. This includes exploring new approaches to microfinance, education, healthcare, and other development sectors.
  5. Strengthening its financial sustainability: BRAC should explore new revenue streams, such as social enterprises, impact investing, and partnerships with businesses. This will reduce its dependence on donor funding and ensure the long-term sustainability of its operations.
  6. Investing in leadership development: BRAC should invest in leadership development programs to ensure a pipeline of skilled and experienced leaders. This will help the organization navigate complex challenges and continue to grow and innovate.

5. Basis of Recommendations

These recommendations are based on a comprehensive analysis of BRAC's strengths, weaknesses, opportunities, and threats, as well as the evolving landscape of the development sector. They are consistent with BRAC's mission and core competencies, address the needs of its beneficiaries and stakeholders, and consider the competitive landscape.

The recommendations are also attractive from a financial perspective, as they focus on sustainable growth and impact maximization. They will allow BRAC to expand its reach, diversify its revenue streams, and achieve greater impact.

6. Conclusion

BRAC is at a crossroads, facing both challenges and opportunities. By embracing a multi-pronged strategy focused on sustainable growth and impact maximization, BRAC can continue to be a global leader in poverty alleviation and empowerment. This strategy will allow BRAC to leverage its core competencies,

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Case Description

In the early 1970s BRAC was a startup nongovernmental organization (NGO) working in Bangladesh. By 2014, it was the world's largest NGO. It had a strong presence in Bangladesh and had begun to deliver social development programs in nine other countries. Its founder and chairperson Fazle Hasan Abed was knighted in 2010 by the British Crown for his service in reducing poverty. The organization took a holistic approach to alleviating poverty, which depended on providing the poor with a portfolio of services including education, agriculture development, healthcare, community empowerment, and microfinance. Around 70% of the funding to deliver BRAc's development programs and services came from its own for-profit social enterprises. The case study allows students to examine the organization's evolution and its business model.

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