Innovation and Entrepreneurship

ASSESSMENT 1: Individual Assignment Essay – “Business Model Analysis” (40%)

Background

In 2012, The Australian Government provided $10 million in seed funding to Social Enterprise

Finance Australia (SEFA) with a further $10 million being invested by a range of corporate and

individual investors, to seed the $20 million SEFA Loan Fund.

SEFA (http://sefa.com.au/) brings together a range of enterprise partners with expertise in social

finance, business development, community development, and research and training. These partners

include Triodos Bank, Community Sector Banking, Macquarie Group Foundation, NSW Aboriginal

Land Council, and Bush Heritage Australia.

SEFA offers loan products to social enterprises in tandem with targeted business advice and support

to help build their capacity to manage debt and become financially sustainable over time.

The overall aim of the Australian government in supporting SEFA, is to improve access to finance and

support for Australia’s social enterprises to help them grow their business, and by doing so, increase

the impact of their work in their communities. By supporting SEFA, the Australian Government is

also seeking to catalyse the development of the broader social impact investment market in

Australia. The SEFA funds will provide flexible, tailored financial products and support to social

enterprises to help them to grow their business and achieve greater social outcomes. The funds do

not provide grants to social enterprises.

The new CEO of SEFA (providing a guest lecture in Week 6) is keen to see the fund succeed and

provide a return on investment (ROI) for investors (including the government).They now need to

select the ‘right’ social enterprises to support to ensure money is not lost and the goals of the fund

are achieved.

There are several social enterprises in Australia that may have a good chance of prospering, if they

had additional support. They have been shortlisted in the book “Australian Stories of Social

Enterprise” by Cheryl Kernot and Joanne McNeil, who interviewed the CEO’s/managers of each

social enterprise. Their stories can be found here:

http://www.csi.edu.au/site/Knowledge_Centre/Asset.aspx?assetid=81476e838a4e4d61

There is also further information available on each social enterprise on their respective websites.

TASK

As a business consultant, acting pro bono, it is your task to provide assistance to SEFA. For the

purposes of this assignment, the short list of organizations you may consider is all organizations

listed in the above book “Australian Stories of Social Enterprises”.

SEFA are requesting that you provide them with an analysis of three of these shortlisted

organizations, identifying one for each category (with reasons):

  1. Select an organization that you can ‘RECOMMENDED NOW’ – i.e. based on your analysis,

this organization has a sustainable business model, competitive positioning, and is likely to

achieve a positive ROI and SROI in its current form.

  1. Select an organization that you would ‘RECOMMEND WITH CHANGES’ – i.e. based on your

analysis, this organization needs to make at least three key changes to its business model, or

competitive positioning, or value proposition etc. If it makes these changes, it will likely

provide a ROI and SROI in the future.

  1. Select an organization that you would ‘REJECT’ – i.e. based on your analysis, this

organisation currently has a weak business model, poor competitive position, and will

provide a weak (or non‐existent) ROI or SROI in its current form.

In making your recommendations to SEFA, it is advisable that you consider issues such as:

‐ their business model (in some cases a diagram may assist)

‐ an environmental analysis (e.g. life cycle of industry, competitors, role of technology and so

on)

‐ the management and organizational structure and demonstrate they have the necessary

skills available to manage a loan/support from SEDIF (or not)

‐ the sustainability of their business model and competitive position – i.e. revenue streams,

ROI, ability to repay interest and/or principal, ability to capture and measure social impact

etc.

In making your recommendations, you may want to refer to other cases, business examples or

concepts discussed in class.

This report needs to also be succinct, no more than 2000 words (excluding references). You are also

a busy consultant, so in analysing the short list, the organisation’s website, their story in the above

book, the lectures, assigned readings and case studies from class will provide enough data for your

initial analysis to the client (i.e. you do not need to contact the organization).

You must submit on UTS Online, using the ‘Assessment 1 Drop Box’ as listed.

You will be assessed as follows:

Formatting

Please note, the structure of the report is completely flexible; a possible structure is:

  1. Introduction (issues with social enterprises); summary of recommendations.
  2. ‘RECOMMENDED NOW’:

o Organization

o Analysis

o Conclusion/Rationale

  1. ‘RECOMMEND WITH CHANGES’

o Organization

o Analysis

o Recommendations

o Conclusion/Rationale

  1. ‘REJECT’

o Organization

o Analysis

o Conclusion/Rationale

  1. Conclusion

o Common issues across short listed applicants

o Ways to stimulate/improve the social enterprises sector in Australia

o Advice to SEFA in selection process/awarding of funds

Other background information:

http://sefa.com.au/

http://www.ssireview.org/articles/entry/in_search_of_the_hybrid_ideal

http://www.deewr.gov.au/Employment/Programs/SocialInnovation/Pages/default.aspx

http://aph.gov.au/senate/committee/economics_ctte/capital_market_2011/issues_paper/index.htm

http://www.socialeconomy.net.au/

http://www.sbs.ox.ac.uk/centres/skoll/Pages/default.aspx

http://csi.gsb.stanford.edu/

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