American Red Cross SWOT Analysis: Strengths & Strategy

Introduction to SWOT Analysis

SWOT analysis was developed to help organizations define their strategies within a dynamic and increasingly competitive environment. Its name derives from the four dimensions it examines: Strengths, Weaknesses, Opportunities, and Threats. Meyer (2003) noted that SWOT analysis considers both internal factors — the strengths and weaknesses of a given firm — and external factors, such as the opportunities and threats present in the broader environment. Its role is to bring about strategic perspectives through the distillation of fragmented facts and figures in support of strategic planning, as Mintzberg (1994) pointed out. It has also been noted that considering SWOT results alongside Porter's generic strategies allows organizations to develop effective approaches for improving performance.

The American Red Cross has very strong brand equity. The fact that it is the name that comes to mind during a disaster or any situation demanding humanitarian assistance means it enjoys the strongest brand recognition among nonprofit organizations. Since 1881, the institution has built trust and awareness as America's premier emergency response organization, branding itself with the slogan "Together, we can save a life" (Chiaravalle & Schenck, 2006, p. 41). The advantages associated with this brand strength include increased public and private donations as well as greater collaboration from individuals and groups in volunteering and other activities.

Strengths of the American Red Cross

The American Red Cross has a long history of helping individuals and families during times of war and natural disaster. This history has established it as one of the longest-serving nonprofit organizations in modern times, affording it the opportunity to serve people more effectively while winning public and corporate support across most of its ventures.

The American Red Cross has a strong mission, vision, and guiding philosophy that have sustained its activities since inception. Organizations with a strong mission possess a sense of purpose that transcends the pragmatic objectives of running a business. The Red Cross's clear mission enables its employees to work together toward the organization's goals. Its organizational structure is built around a heavy reliance on a volunteer network supported by a specialized infrastructure of professionals, all connected through innovative means. The organization is primarily driven by the efforts of volunteers, and its mission provides them with a sense of purpose and connectedness that allows them to work effectively (The Forum, 2011).

The ability to maintain a robust volunteer base and mobilize volunteers quickly to help people and communities cope with and recover from losses is critical to the American Red Cross's operations (Sullivan, 2010). The organization has made efforts to form strategic partnerships with other organizations to assist in mobilizing volunteers whenever disaster strikes.

The American Red Cross has an excellent social media strategy that has allowed it to enjoy unparalleled public exposure. Its social media efforts are aimed at raising awareness of its operations. This transparency is important because it enables the organization to attract sponsors and volunteers alike, reducing the time and money spent on recruitment (Lupfer, 2009).

The American Red Cross plays a critical role in the American national healthcare system (American Red Cross, 2010). As the largest single national supplier of blood and blood products, the organization collects and processes more than 40% of the nation's blood supply and distributes it to nearly 3,000 healthcare facilities nationwide. It also plays a pivotal role in protecting the safety of donors and patients amid declining blood availability, and it was among the first organizations to develop and implement infectious disease testing.

Ciconte and Jacob (2008, p. 5) stressed the importance of accountability and trust in the nonprofit sector, noting that accountable organizations must be open and ready to answer questions from all individuals and organizations that have invested their faith, trust, and money in them. The American Red Cross is accountable to numerous stakeholders, including donors and funders at the state, local, and federal levels. All Red Cross employees share a degree of individual responsibility to ensure the organization remains answerable to its constituents while remaining true to its mission. Ciconte and Jacob (2008, p. 5) also noted that accountable nonprofit organizations enjoy advantages such as the ability to raise more funds by building stronger public confidence and implementing more effective processes. A 2006 report by Wagner indicated that trust and confidence were the most powerful predictors of public confidence in the American Red Cross, and that public perception was heavily influenced by the organization's response to the families of September 11th victims.

The American Red Cross suffers from several weaknesses that significantly influence its operations and public perception.

For several years, the American Red Cross has faced allegations regarding its treatment of workers. One notable example is the laying off of staff members as a consequence of a $200 million budgetary deficit (Schwinn, 2008; Dine, 2009).

The organization has faced repeated allegations of poor fund management. The mismanagement of funds following September 11th cast the organization's image in a negative light (Briggs, 2002).

The American Red Cross lacks a sufficiently robust online presence, which limits the ability of potential supporters to join its cause or donate to its various programs.

The organization lacks a dedicated office or department tasked with product and service innovation, limiting its ability to evolve its offerings.

Weaknesses of the American Red Cross

The absence of an elaborate brand protection strategy has allowed fraudsters to use the organization's name and logo to collect funds illegally, causing financial and reputational harm.

The organization operates with limited funds and frequently faces serious budgetary deficits.

The organization can form strategic alliances with groups that have no political or religious affiliations, enabling it to expand its services to people across America and beyond.

Because most competing nonprofit organizations do not provide blood donations, the Red Cross can leverage this unique capability to launch targeted awareness and fundraising campaigns.