2. Using appropriate model, discuss how conducting a frequent and thorough external

environment analysis would help the Board of Trustees of CWA.

The Board of Trustees of CWA should consider conducting the PEST analysis. It is a

strategic tool that analyses impact that political, economic, socio-cultural, technological

factors may have on an industry’s profitability potential or for non-profit organisations to

identify areas where funding is needed. In this case, the board should be using PEST analysis

to investigate the charity sector’s influence on CWA’s ability to attract donations.

Firstly, we will consider the impact of political factors on CWA. Since it is a company

providing community development services in less-developed countries, government stability

there may be a key player to the on-going provision of future services. If the region is

politically unstable, CWA may be forced out of the country or have its assets nationalised.

On the other hand, the Japanese government is not supportive of CWA’s cause and CWA is

on its own when it comes to getting funding. Taxation policies in Japan also may have either

a positive or negative impact on the likelihood of donors continuing to donate and CWA’s

ability to attract new donors.

Next, economic factors may impact on the need for donations. Economic recession, business

cycles, interest rates, inflation and unemployment rates are all relevant indicators when

reviewing the charity’s ability to elicit donation. For instance, a decrease in disposable

income may result in decreased donations and funding of non-profit organisations (NPOs)

such as CWA. Furthermore, increasing business expenses such as rent, bank fees and utility

bills may result in NPOs having to focus resources on areas other than marketing and

promotion.

Thirdly, CWA should take into account socio-cultural factors. Population demographics,

social mobility, lifestyle changes, attitudes towards charity and level of education all play a

role in affecting the external environment in which CWA operates. CWA may be a having a

problem of staying in touch with the current generation as shown in the case where the

volunteers are not in tune with CWA’s direction and goals. CWA should take an innovative

and youthful approach in educating and training volunteers to face challenges from its

competitors.

Finally, there is also the technology dimension for CWA to consider. Since CWA is not using

Internet any available technology to any extent, CWA has not done a good job in reaching

out the younger generation as it is only using newspapers to appeal for donations, as opposed

to appealing to the vast online community. By using social media such as Facebook and

Twitter, new volunteers and donors can be readily found and interactions can take place in an

instant, saving advertisement costs and other promotional costs.