TABLE OF CONTENTS

Executive Summary Pg. 1

External Analysis Pg. 2-4

Internal Analysis Pg. 5-6

Financial Analysis Pg. 7

Strategy Pg. 8-12

Strategic Issue I Pg. 8

Strategic Issue II Pg. 9

Strategic Issue III Pg. 10

Implementation Plan Pg. 11-12

Cost Analysis Pg. 11

Sources Pg. 13

Appendices

IE Matrix Table Pg. 14

QSPM Table Pg. 14

Importance of Demographics Table Pg. 15

CPM Comparative Table Pg. 15

CPM Calculations Pg. 16

Survey Template Pg. 17

EXECUTIVE SUMMARY

Lakeshore Humane Society of Dunkirk, NY is a non-profit organization that uses

multiple advertisements throughout the year for various reasons. This plan outlines

effective measurements that LHS should employ in regards to their advertising expenses.

The CPM (cost per thousand) and the Break Even Point Analysis can be used to

accomplish this.

LHS has indicated that their main advertising medium is the Dunkirk Observer.

Therefore, all CPM and BEP examples reflect this in their calculations. The utilization of

these tools will allow LHS to properly decide if their advertising budget is being well

spent.

Although the services that Lakeshore Humane Society provides are vital and necessary to

the community, it can be inferred that the vision of LHS would be to ideally “go out of

business.” This term can be defined as all animals already having a forever home. LHS’s

mission is to provide shelter and care to displaced animals within the Dunkirk and

surrounding communities and seek to find each animal its forever home.

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EXTERNAL ANAYLSIS

Current Rivalry Opportunities

o Adoption Rate in US: The Humane Society of the United States estimated the

number of pets adopted or euthanized in U.S. shelters in 2012 and 2013. 6 to 8

million cats and dogs are entering shelters each year, and about 3 to 4 million cats

and dogs are adopted each year. This shows that there are many adoptions in the

United States. Therefore, LHS have ample opportunities to make connections

between loving adopters and their animals.

Current Rivalry Threats

o None found.

Potential Entrants Opportunities

o LHS is the only adoption center in Dunkirk and Fredonia with a no kill policy.

That being said, Lakeshore Humane Society has a competitive advantage to

utilize the surrounding community.

Potential Entrants Threats

o Other Shelters: There are over 3,500 animal shelters in the United States. Based

on a 60-mile radius, their biggest competitors are Buffalo Humane and

Chautauqua Country Humane Society in Jamestown. Lakeshore Humane Society

needs a better differentiation strategy to set themselves apart from their

competitors.

Bargaining Power of Buyer Opportunities

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o None found.

Bargaining Power of Buyer Threats

o Other Humane Society’s Animal Population: The two nearest humane societies

are Buffalo Humane and Chautauqua Country Humane Society. The current

population of animals for adoption in Buffalo Humane is 10 dogs and 16 cats. In

Chautauqua Country Humane Society, 28 dogs and 90 cats are waiting to be

adopted. Within Lakeshore Humane Society, there are 5 dogs and 41 cats that are

waiting to find a forever home. Based on these numbers, the potential adopters

may show interest in one of these other organizations because they have a wider

spectrum of animals to choose from.

Bargaining Power of Supplier Opportunities

o No Kill Policy: The Humane Society of the United States claims that 2.7 million

of adoptable cats and dogs are euthanized in shelters each year. However,

Lakeshore Humane Society has a no kill policy. LHS is positively perceived by

the community because of this policy.

Bargaining Power of Supplier Threats

o None found.

Economic Opportunities

o Personal Disposable Income Growth: Total personal disposable income in the

U.S. is $12.7 B as of March 2014. The United States disposable personal income

is increasing; therefore, consumers have the ability and funds to adopt animals.

Economic Threats

o Individual Income Tax Rates: The individual income tax rate has increased from

35% to 39.6% recently. The individual tax rate was 35% from 2006 to 2012; but

in 2013 it increased to 39.6%. Consumer’s personal disposable income has

increased; however, their tax income rate has also increased, resulting in

consumers to be less likely to adopt animals.

Demographic Opportunities

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o The United States Population is Increasing: The United States population has

been increasing about 0.9% every year. In 2012, the population was 313,847,500

and in 2014 the population is over 320,562,920. In the future, this could

potentially increase adoption rates.

o Population of Dunkirk and Fredonia: The population in Dunkirk is about 7,215

and the population in Fredonia is about 4,720.

Demographic Threats

o College Students: A large portion of the Fredonia population is comprised of

SUNY Fredonia college students. Many college students are not fit to take care of

a pet due to limitations of temporary living situations. This typically causes a

problem of an increase in stray animals after the end of the school year.

Unfortunately, LHS does not have the means to capacitate all of these animals at

once.

Political-Legal Opportunities

o Animal Protection Laws of New York: The Animal Protection Laws of New York

is set in place to protect animal rights. Awareness of this organization may

increase the desire to adopt animals versus going to a breeder.

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INTERNAL ANALYSIS

Management Strengths

o Lakeshore Humane Society is Passionate About their Goal: Board members are

passionate about the animals. They will go to great lengths to make sure that the

animals are well taken care of. Part of LHS’s mission is to find each animal a life

long home.

o The Facility is Well Kept and Organized: Necessary steps are taken to reduce the

chance of overpopulation in the facility by the utilization of waiting lists. The

visual controls that LHS employs help to maintain and organize the facility.

o Screening Process: Animals are tested for incurable and contagious diseases

before being placed in LHS’s general population. LHS has hosted a training

seminar to secure or improve the behavior of their animals. Potential adopter

homes are evaluated to determine if it is a suitable environment for an animal.

Management Weaknesses

o Lack of Business Savvy Volunteers: By increasing the number of business savvy

volunteers, LHS could potentially create a stronger business structure. By gaining

business knowledge, the organization can inform new and existing volunteers of

their new business methods.

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Corporate Culture Strengths

o No Kill Policy: LHS’s no kill policy attracts adopters and differentiates

themselves from the competition.

Corporate Culture Weaknesses

o None found.

Marketing Strengths

o Annual events: Lakeshore Humane Society’s annual fundraiser events create a

buzz throughout the community. This is also where the organization spends the

majority of their advertising budget.

Marketing Weaknesses

o Lack of Advertising Measurements: LHS needs to set a measurement system in

place for their marketing. Currently, they are not properly spending their

advertising budget.

Information Systems Strengths

o Website Accessibility: By promoting LHS’s website, customers can access

animal, fundraiser, and donation information. This is very convenient for the

public; therefore, this expands their customer base.

Information Systems Weaknesses

o Website Limitations: Lakeshore Humane Society’s website is somewhat limited

to the public. Dunkirk has a large Hispanic population, so a bilingual website

feature would be beneficial. Also, their gift shop is not accessible through their

website. This could be easily done with a PayPal account; although shipping costs

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may cause a concern, the online merchandise prices can be increased to reflect

shipping costs.

FINANCIAL ANALYSIS

Lakeshore Humane Society has average finances for a non-profit organization. Looking

at their yearly income of $104,823.36 and deducting their yearly expenses of

$103,429.25, LHS is left with about $1,394.11. This does not include any assets that they

may have.

Their financial system is stable, as long as they do not run into any large expenses. For

future planning, LHS must be more aware of certain costs and make sure that their

inventory is delivered on time. For example, last year LHS ran into an unexpected cost

from a late inventory delivery from Purina. This could have been avoided by allocating

“emergency” funds.

Fundraisers bring in the most amount of their revenue (about $40,827.67 last year). The

yard sale generated $21,288.50 in revenue, and the Spaghetti Dinner brought in

$3,188.90. It is important for LHS to continue these fundraising events, and perhaps even

add more events as they continue to grow.

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STRATEGY

Strategic Issue I – No Measurement Means Exist

What is The Issue?

LHS currently lacks a structured marketing measurement process that allows the

organization to justify their spending and budget.

Why is this an Issue?

LHS is currently unaware of the dollar amount that is spent on their current advertising

and there is no way to determine whether or not the techniques they have in place are

effective in reaching their target market. Based on the CPM calculations, $204.00 per

household in LHS’s target market was spent last year. This number is rather high, so LHS

should consider alternative advertising methods.

Strategic Alternative

LHS should measure their advertising spending by calculating the CPM and Break Even

Point Analysis. This will provide numbers that will determine what areas of advertising

have been efficient in terms of cost, and also where money is being spent inefficiently.

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Strategic Issue II– Lack of Feedback

What is the Issue?

LHS does not have a method to record how people become aware of their existence.

Why is this an Issue?

This is problematic for LHS because they have no way of knowing the best way of

reaching new contacts.

Strategic Alternative

The issue could be resolved by creating a survey that asks how customers heard about the

organization; all possible options should be included in the survey in order to have

meaningful data. A template has been created for LHS ,and can be modified by in the

future. The survey’s main question asks: “How did you hear about Lakeshore Humane

Society?” The options include the following: “Dunkirk Observer, Flyer, Friend/Family,

Fredonia Leader, Website and Other.” A simple way to know if your advertisement

efforts are working is to simply ask those who come in the Adoption Center or to

Fundraiser events where/how they heard about your facility.

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Strategic Issue III – LSHS Lacks Corporate Strategic Direction

What is the Issue?

LHS is a small non-profit organization. Therefore, a corporate strategic direction has not

been established. Although LHS may not realize it, they are currently in a stability

strategy. The organization is in a stage where they are trying to maintain in order to grow

in the future.

Why is this an Issue?

This causes an issue because the organization may want to take a direction that is not

adequate at the current time. Understanding their strategic direction is important to allow

for growth and innovation in the future.

Strategic Alternative

A strategic tool called an IE matrix shows that LHS is currently in a hold and maintain

level. This means that LHS is currently practicing a stability strategy. They should focus

on strengthening and building their internal systems before they are ready to enter a

growth strategy.

Importance of Demographics

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In regard to the CPM discussed in the Implementation Plan below, Fredonia and Dunkirk

demographic statistics were used. For the city of Dunkirk, there are 2,139 Households,

3,338 Families, and 1,738 Elderly Citizens (65+). For the town of Fredonia, there are

1,861 Households, 1,950 Families, and 909 Elderly Citizens (65+). It should be noted

that these figures exclude the SUNY Fredonia student population (who live off campus).

This is because they are not a part LHS’s target market. According to these

demographics, Households make up 27% of their Dunkirk Observer target market,

Families make up 35%, and the Elderly makes up 17.6%. LHS will be able to calculate

the CPM using these statistics.

IMPLEMANTAION PLAN

One of our strategic goals is to implement a process to measure LHS’s advertisement

effectiveness. First we will use the CPM Method to calculate the cost of reaching 1,000

customers (Dunkirk Observer subscribers). Secondly, we will use the Break Even Point

Analysis to compute how many customers must be reached and respond in order for LHS

to break even for the cost of the advertisement.

How to Calculate CPM:

1.     Configure the cost of the advertisement.

2.     Know how many customers are being reached (15,000 daily for Dunkirk Observer).

3.     Calculate:

CPM = Cost of Ad/ # of total contacts reached (in thousands)

        Ex: CPM = $475/ 15

                       = $31.67 per contact reached

*** If you know how many people are in your target within the Dunkirk Observer, you

can use the CPM calculation relative to target market ***

                    CPM-TM = Cost of Ad/ # of target market contacts (in thousands)

        Ex: Cost of Ad= $475         Total Targets Reached= 15,000  

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% of Target= 30%

CPM- TM= $475/ (.3 x 15) = $104.89 per target reached          

COST ANAYLSIS

Based on the CPM calculations, LHS should utilize more word-of-mouth advertising

methods. The results show that the cost per household in their target market is very high.

Please see the Appendix for the complete calculations.

How to Calculate BEP:

BEP= Fixed Cost/ (Price - Variable Cost)

FC= Total Fixed Cost P= Average Price per Unit VC= Variable Cost per Unit

The Break-Even Point Analysis evaluates the relationship between total revenue and

total cost to determine profitability at various levels of output. In relation to LHS, the

results of this equation will show how many adoptions (in dollars) must be made in order

to break even on the cost of the advertisement.

Total costs are the expenses incurred by an organization in producing and marketing a

product. This is also the sum of fixed cost and variable cost. In LHS’s situation, the total

cost would be the total cost of the advertisement.

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Fixed costs are the sum of the expenses of the firm that are stable and do not change with

the quantity of a product that is produced and sold. Examples of these include rent on a

building, executive salaries, and insurance.

Variable costs are the sum of the expenses of the organization that vary directly with the

quantity of a product that is produced and sold. For example, as the quantity sold doubles,

the variable cost doubles.

Through this analysis, the equation used to calculate the Break-Even Point is Fixed Cost/

(Price - Variable Cost). This equation shows the quantity at which total revenue and total

cost are equal. This means the result is the point of balance between having either a profit

or a loss.

In order to implement this equation definitive numbers are needed. Using the surveys as a

guide, the results will show what advertising outlet should be used. It will also show how

much should be spent on said advertising and can forecast what price will be the best

value and bring in the most customers.

SOURCES

"Animal Legal Defense Fund." Animal Legal Defense Fund. N.p., n.d. Web. 25 Apr. 2014. <http://aldf.org/>.

"AreaConnect Free Yellow Pages, White Pages and Guides." AreaConnect Free Yellow Pages, White Pages and Guides. N.p., n.d. Web. 29 Apr. 2014. <http://www.dunkirk.areaconnect.com>.

"AreaConnect Free Yellow Pages, White Pages and Guides." AreaConnect Free Yellow Pages, White Pages and Guides. N.p., n.d. Web. 29 Apr. 2014. <http://www.fredonia.areaconnect.com>.

"DogTime is the place for dog breeds, pet adoption, pet insurance and expert pet advice."

DogTime. N.p., n.d. Web. 25 Apr. 2014. <http://dogtime.com/>.

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"Lakeshore Humane Society." Lakeshore Humane Society. N.p., n.d. Web. 16 Feb. 2014.

<http://www.lakeshorehumanesociety.org>.

"The Humane Society of the United States : The Humane Society of the United States."

RSS. N.p., n.d. Web. 19 Apr. 2014. <http://www.humanesociety.org/>.

APPENDICES

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Importance of Demographics

CPM Comparative Table

CPM for Main Advertisement:

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CPM for Annual Advertisement Expenses:

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Survey Template:

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