Her primary “business” experiences have been with Church–as both a member, the daughter of church leaders, and now the wife of a church minister—and Let’s Start Talking, a non-profit, faith-based organization that she has grown up with, volunteered for, and been employed by. Because of this, her interest in this degree program is primarily in developing as a person so as to be able to help both churches and ministries like LST.
Sherrylee and I love that she is doing this because she is constantly sending us books and articles from her reading list that she feels might be important to us and/or to LST. Recently, she sent us a paper by Michael E. Cafferky, presented in 2005 at a Christian Business Faculty Association conference, entitled “The Porter Five-forces Industry Analysis Framework For Religious Nonprofits: A conceptual analysis,” a paper which introduced me to several new ideas.
Very briefly, I would like to share with you my thoughts from reading both the paper and other articles to which it led me.
In 1979, Michael E. Porter of Harvard Business School introduced a framework of five forces which he believed would describe the attractiveness/profitability of a market. At first, it was assumed that churches and non-profits seemed to work outside of a competitive framework, so for many years his model was assumed inappropriate for a religious marketplace.
Professor Cafferky’s paper, however, challenges this assumption and looks for intersections and congruities. I believe, at the least, the exercise of using Porter’s Five Forces Analysis could stimulate churches and religious non-profits to examine the dynamics of their own environment in a more productive way.
Let’s look at these Five Forces and try to raise specific questions about the current religious marketplace:
1. Threat of New Competition: Profitable markets that yield high returns will attract new firms. This results in many new entrants, which eventually will decrease profitability for all firms in the industry. We recently did a search around our new office facility and found 74 churches listed within a five-mile radius. Church planting is currently seen as the primary means of evangelism in the industrialized world, especially within the United States. The proliferation of house churches, often the strategy for new church planters, should be noted in the context of “new entrants.” In contrast to all of these churches and all of these “new entrants” is the fact that around 4000+ churches close their doors permanently each year and the number of people who self-identify as Christians in the U.S. is declining. Here is my first question: Is the proliferation of new church plants simply covering up the fact that the religious marketplace is much less “profitable”? To use the language of business: are we closing old stores and opening new stores, but that strategy in and of itself is not adequate to keep our business profitable?
2. Threat of substitute products or services – how easy is it for the buyer to switch to a different product? The easier to switch, then the more likely to switch and make your organization less profitable. The ease depends on differences in cost, in quality, in availability of substitute products, and perceived differentiation among other things. It seems to me that especially the evangelical churches have been rushing towards similarity! Worship, jargon, buildings, services and community-building has gradually become one cloth. Doctrinal differences are held in low esteem and will likely disappear in the coming generation of young preachers in churches of Christ. Post moderns come with very little propensity toward brand loyalty anyway, so switching within the American church context is extremely easy! As the United States becomes more secular, the cultural pull toward syncretism will make even non-Christian alternatives more similar, therefore, more magnetic. My question: In an attempt to be relevant and more accessible, are Christians becoming less distinctive, therefore, more susceptible to our “customers” switching to alternatives?
3. Intensity of competitive rivalry
(to be continued . . .)