Tipos de prevención (específica e inespecífica)

Industry structure contributes to inefficiency and aggression in the United Kingdom’s charity sector.

The charity sector has become controversial in the United Kingdom. The aggressive fund-raising of some charities is epitomised by workers soliciting donations from shoppers on a commission basis. Such is their perceived aggression that these charity workers are known as ‘chuggers’, compared with the violent street-crime of ‘muggers’.

In 2008, there were 189,000 charities registered in England and Wales, 95 per cent having annual incomes of less than £500,000. However, about 80 per cent of all charity income is raised by the largest 20 charities, headed by Cancer Research UK (2008 income, £355 m (~€390 m; ~$532 m)). According to Charity Market Monitor , in 2008, the top 300 charities averaged a 0.9 per cent increase in income, but the largest 10 managed income growth of 2.3 per cent (excluding impact of mergers).

The United Kingdom government introduced the 2006 Charities Act with the specific intention of assisting mergers between independent charities. This had followed a report of the Charity Commission, the regulator for charities in England and Wales, which had commented on the charity sector thus:

‘Some people believe that there are too many charities competing for too few funds and that a significant amount of charitable resource could be saved if more charities pooled their resources and worked together . . . The majority of charities are relatively small, local organisations that rely entirely on the unpaid help of their trustees and other volunteers. They may have similar purposes to many other charities but they are all serving dif- ferent communities. The nature of these charities suggests that there are less likely to be significant areas of overlap . . . It is the much larger, profes- sionally run, charities which, because of their size, tend to face charges of duplication, waste and over-aggressive fund-raising. While there are some clear advantages to be had from a healthy plurality of charities, which are constantly refreshed by new charities pursuing new activities, there are also big benefits of public confidence and support to

be had from showing collaborative, as opposed to over-competitive, instincts.’

Local authorities in particular were frustrated by duplication and waste, as they increasingly commis- sion local charities to deliver services. With respect to small charities, local authority budgets are relatively large. One charity sector chief executive, Caroline Shaw, told Charity Times as she pursued

more cooperation between local charities:

‘Without a doubt there is increased competition when it comes to [local authority] commission- ing . . . Our driving force has really been to try to create a more effective service for front line organisations; to offer more projects, more diverse services, more effective services. There’s a huge amount [of charities] all fighting for funding. I really think that people should be looking at working more closely together.’

During 2008, more than 230 charity mergers were registered with the Charity Commission. As the reces- sion began to put pressure on charitable donations throughout the sector, early 2009 saw the merger of two well-established charities helping the elderly in the United Kingdom, Help the Aged and Age Concern. The new charity, Age UK, has a combined income of around £160 million, including £47 million a year raised through fund-raising, and over 520 charity shops. Sources : ‘RS 4a – Collaborative working and mergers: Summary’, http://www.charity-commission.gov.uk/publications/rs4a.asp ; Charity Times , ‘Strength in Numbers’, August 2007; Charity Market Monitor ,

2009.

Questions

1 Which of Porter’s five forces are creating problems for the United Kingdom’s charity sector?

2 What type of industry structure might the charity industry be moving towards? What would be the benefits and disadvantages of that structure?

INDUSTRIES AND SECTORS 51

profi ts may actually be scarce because of high investment requirements. The next stage is one of high growth , with rivalry low as there is plenty of market opportunity for everybody. Low rivalry and keen buyers of the new product favour profi ts at this stage, but these are not certain. Barriers to entry may still be low in the growth stage, as existing competitors have not built up much scale, experience or customer loyalty. Suppliers can be powerful too if there is a shortage of components or materials that fast-growing businesses need for expansion. The shake-out stage begins as the market becomes increasingly saturated and cluttered with com- petitors. Profi ts are variable, as increased rivalry forces the weakest competitors out of the business. In the maturity stage , barriers to entry tend to increase, as control over distribution is established and economies of scale and experience curve benefi ts come into play. Products or

Figure 2.5 The value net

Source : Reprinted by permission of Harvard Business Review . From ‘The Right Game’ by A. Brandenburger and B. Nalebuff, July–August 1996, pp. 57–64 . Copyright © 1996 by the Harvard Business School Publishing Corporation. All rights reserved.

Figure 2.6 The industry life cycle

services tend to standardise, with relative price becoming key. Buyers may become more pow- erful as they become less avid for the industry’s products and more confi dent in switching between suppliers. Profi tability at the maturity stage relies on high market share, providing leverage against buyers and competitive advantage in terms of cost. Finally, the decline stage can be a period of extreme rivalry, especially where there are high exit barriers, as falling sales force remaining competitors into dog-eat-dog competition. However, survivors in the decline stage may still be profi table if competitor exit leaves them in a monopolistic position. Figure 2.6 summarises some of the conditions that can be expected at different stages in the life cycle.

It is important to avoid putting too much faith in the inevitability of life-cycle stages. One stage does not follow predictably after another: industries vary widely in the length of their growth stages, and others can rapidly ‘de-mature’ through radical innovation. Thus the tele- phony industry, based for nearly a century on fi xed-line telephones, rejuvenated rapidly with the introduction of mobile and internet telephony. Anita McGahan of Toronto University warns of the ‘maturity mindset’, which can leave many managers complacent and slow to

respond to new competition. 17 _{Managing in mature industries is not necessarily just about}

waiting for decline. However, even if the various stages are not inevitable, the life-cycle con- cept does remind managers that conditions are likely to change over time. Especially in fast- moving industries, fi ve forces analyses need to be reviewed quite regularly.