In my last blog I discussed the birth and naming of the Cairo Model as a way to begin to answer the question “Is a social enterprise better than a charity?”
In this blog I will explore what the Cairo Model is and how it can help you make appropriate decisions for legal structures, for marketing and communication activity and funding.
So, tell me about the Cairo Model?
The model can be summarised with this diagram (see below). The first part of the model attempts to define your market. The second part helps you understand the situation. The third part of the model suggests actions for you to take.
The market
Let’s take the three “market columns” together. The columns are market failure, market opportunity and market appetite. These terms are often used loosely and synonymously. The terms are related but they are distinct.
We can define them with two criteria:
Using these criteria we can think of a market failure, or a social market failure, as a community of interest or geography (the market) that has a problem, that they are unaware of.
A Market opportunity exists when the market is aware of the problem, but they are not necessarily able or willing to pay for a solution. This may be due to lack of money if the market is a disadvantaged community, or it may be due to a solution not being proven as effective if this is a new approach.
Finally, market appetite means a market is both aware of a problem and willing to pay for a solution.
| Criteria | Market Failure | Market Opportunity | Market Appetite |
| Awareness of the social or environmental problem | No | Yes | Yes |
| Ability or willingness to pay | No | No | Yes |
…which suggests things you might want to consider
Once we know how developed the market is, we can extend the model to suggest broad strategies for us to explore and implement.
If you are looking at a market failure it sensible to raise awareness of the problem as widely as you can. This means society, the media, in the community concerned and with policy makers. Funding is likely to come from statutory or philanthropic sources, which suggests a charity or NGO model suits this well.
Market opportunities are more nuanced. Awareness raising is still a priority and more emphasis will be placed on promoting solutions to a problem as well as raising awareness of the problem. Hopefully policy will be changing sit is possibly less lobbying might be possible. There maybe some early adopters in the market which means that while most of your funding is philanthropic or from the sate there may be a growing proportion from beneficiary customers.
Where market appetite exists, communication shifts to marketing, branding and sales type activity. This is because people know there’s, a problem and you have a good solution. Funding will normally be increasing from earned income which suggests a more commercial approach is reasonable.
| Your actions | Market Failure | Market Opportunity | Market Appetite |
| Your marketing communication activity | Lobbying policy makers Awareness raising of the problem in the market | Awareness raising of the problem in the market Marketing to drive awareness of your solution | Marketing and sales activity |
| Funding mix: What is your financial model? | Funding comes from out of the market e.g. philanthropists, local or central government, trust or foundations etc. | Funding primarily from out of the market A small number of early adopters | Funding from out of the market AND Self-funding from beneficiaries /customers within the market |
| Appropriate legal structures | Philanthropic model (charity or NGO) | More commercial (social enterprise or ethical business) |
The Cairo Model in its entirety!
Here’s the the whole model.
If you have any questions, or if you’d like to discuss or use this model please feel free to drop me an email.
| Criteria | Market Failure | Market Opportunity | Market Appetite |
| Awareness of the social or environmental problem | No | Yes | Yes |
| Ability or willingness to pay | No | Possibly, but at a low level | Yes |
| Your marketing communication activity | Lobbying policy makers Awareness raising of the problem in the market | Awareness raising of the problem in the market Marketing to drive awareness of your solution | Marketing and sales activity |
| Funding mix: What is your financial model? | Funding comes from out of the market e.g. philanthropists, local or central government, trust or foundations etc. | Funding primarily from out of the market A small number of early adopters | Funding from out of the market AND Self-funding from beneficiaries /customers within the market |
| Appropriate legal structures | Philanthropic model (charity or NGO) | More commercial (social enterprise or ethical business) |
