Abstract
In order to build a successful strategy for any type of business, a strategic analysis needs to be performed. A strategic analysis consists of multiple elements, but it always starts with environmental scanning. This research focuses on that very first step by conducting an environmental analysis. It is a strategic tool that identifies all the external and internal elements, which could possibly affect the organization's performance. The aim of this research was not to provide all the final and conclusive answers. It was merely to explore the research topic with varying levels of depth. Additionally, this research tended to tackle new problems on which little or no previous research has been done by combining and elaborating well-known models, such as PESTEL, Porter´s 5 forces, and SWOT. The research problem of this chapter can be described as to determine the possibilities of starting a successful commercial business within the social welfare sector of Portugal.
TopIntroduction
Is it possible for a private commercial business to gain a place within the Portuguese social care system? Due to current vulnerabilities within the social sector, as well as the economy, the sustainability of this sector is being questioned and for that reason it is a good time to explore new possibilities and opportunities. The aim of this chapter is to execute an environmental analysis that differentiates four layers, based on the technique from Johnson et al. (2018) in order to create a complete vision on the social sector of Portugal. Based on those layers, the research objectives have been established. The first layer concerns the macro - environment, focusing on the broad environmental factors that impact to a greater or lesser extent on almost all organisations.
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Objective 1: To establish a benchmark between Portugal and the Netherlands in order to identify the general factors that play a major part on a macro - level basis when starting a new business in the social sector of Portugal. To achieve this, the PESTEL tool will be applied. Continuously on the next layer, attention is moved to the sector and its competitive forces. Here, objective 2 is applicable.
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Objective 2: To scan the Portuguese social sector together with its competitors to classify the financial mechanism that allows the business to be profitable. The model of Porter’s 5 forces is implemented to obtain a picture of the main forces that shape this sector within Portugal. Additionally, the power - interest matrix will be applied to identify key stakeholders and their influence on the business. Thirdly, the layer of direct competitors together with market segments, where we define the third objective.
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Objective 3: To focus on direct competitors and to look for unexploited opportunities as well as ‘black holes’ by looking at the market segment and defining the differences in customer’s needs. Finally, it is important to apply the information on the organisation itself to understand where strengths and weaknesses lie. This brings us to the fourth and final objective.
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Objective 4: To describe the critical factors of success for this organisation and based on those factors, to identify the main constrains and opportunities for the business by means of a dynamic SWOT analysis. Further recommendations and the conclusion of this research will also be implemented in this final chapter.
Key Terms in this Chapter
Porter’s Five Forces Framework: Is a method for analysing competition of a business. It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness (or lack thereof) of an industry in terms of its profitability. An “unattractive” industry is one in which the effect of these five forces reduces overall profitability.
PESTEL: A PESTEL analysis or PESTLE analysis (formerly known as PEST analysis) is a framework or tool used to analyse and monitor the macro - environmental factors that may have a profound impact on an organisation’s performance. This tool is especially useful when starting a new business or entering a foreign market.
Strategic Management: In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's managers on behalf of stakeholders, based on consideration of resources and an assessment of the internal and external environments in which the organization operates.
Third Sector: The third sector is made up of non - profit and non - governmental organizations, whose objective is to generate public services.
Non-Profit Organization: They are organizations of a legal nature with no purpose of accumulating capital for the profit of their directors.