Abstract and Keywords
This paper explores the uses of the field of competitive strategy in the nonprofit sector. It begins with a discussion of the central differences between nonprofit and for profit organizations. Most fundamentally, nonprofits emphasize mission fulfillment rather than strict profit maximization. Nonprofits are also distinguished from for-profits by their reliance on donations as well as earned income. Both the difference in objective function and the use of multiple revenue sources affect the dynamic strategies of nonprofits. This paper explores exit and entry patterns we expect to see in the nonprofit sector, pricing strategies, levels of differentiation, and the usual sources of competitive advantage in the sector. It also illustrates the ways in which the classic tools from strategy like Hotelling and the Bresnahan-Reiss entry models are informative in the nonprofit sector.
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