Social Enterprise Acts to Increase Possibilities in Business

Question: Discuss about the Social Enterprise Acts to Increase Possibilities in Business. Answer: Introduction To this day, even through all the technological advancements the world has seen. We have still never seen the end of many social issues throughout the world. This is due to a gap disallowing us from achieving a world with no social issues. The concept of social enterprise acts to increase possibilities in business. This could simply mean distributing profits toward pursuing a community goal, or moving the allocation of profits from owners, to those who are at the forefront of experiencing the social problem. Or, on a larger scale, this may mean shifting perspectives and abolishing a social issue all together. This paper will analyse the importance of social enterprise by creating a business model which is based upon the foundations of social enterprise. The new business model involves creating medical centres throughout Australia, and designed with the ultimate goal of tackling the social issues of health and education in Australia and developing countries. The medical centre social enterprise is called, Australian Health Project. With the establishment of new medical centres, Australia is provided with further accessibility to health services in local communities. Developing countries will be given the social benefits. These benefits will also be explained in detail throughout the paper. A social enterprise model for education needs to contain needs to contain the following 4 elements: Accessibility; Affordability; Sustainability; Adaptability These 4 elements are the foundation of the newly created and innovative medical centres. Brief Overview of Health as a Social Issue (Luke) Through countless efforts, the basic health needs of vast numbers of the worlds people remain unsatisfied. In many countries, less than 15% of the rural population and other underprivileged groups have access to health services (Djukanovic Mach, 1975). Undoubtedly, to have 85% of people in developing countries unable to find basic health services, is much more than a social issue. Sadly, we have been able to find cures for many sicknesses and diseases, but this issue is much larger than finding cure for a sickness. With 1/3 of the world population unable to find medicines essential to health and survival (Humanium, 2016), it is the largest sickness ever seen. Sadly, though many charities, NGOs, government aid, human aid and many other efforts there are still billions of people struggling throughout the world. The Australian Health Project has the vision to ultimately eradicate all basic health issues in developing countries. Develop and Outline the Business Model (Luke) The Business Model we are creating is called the Australian Health Project. In essence, it is a medical centre, and provides Australians with essential health services to our local suburbs and communities. Over time, these centres will also extend toward rural areas throughout Australia. The health services include; GP, podiatrist, physio, optometrist and chiropractor. However, a business as simple as a medical centre, can provide significant impact to so much more than the Australian community. Through social enterprise, this business has been structured to improve lives of many in developing countries, such as in Kenya and Cambodia. Because it is a regular medical centre with approved, experienced doctors, the AMA would also give the approval of the centre. Therefore, the centres will also be bulk billed by the government for greater customer satisfaction and accessibility. The social impacts in developing countries would be created by using the profits given to by the patients at the various medical centres around Australia. As a general rule, each consultation in Australia, will give an individual in a developing country the opportunity to also receive a health check-up. While also receiving the health check-up, the doctor in the developing country will also educate the individuals or communities to administer basic first aid (similar to a Bronze Medallion/Senior First Aid Cert.). Over time, this will increase health outcomes for communities, while also educating them to administer basic first aid. Therefore, this social enterprise tackles the social issues of health and education. The social enterprise is fully sustainable. This is due to the business being based on a mutual service where one service in one country, allows for another service in another country. It all starts with the customers in Australia consciously making the decision whether they would prefer to use the services of a regular medical centre, or deciding to essentially change the world, by using the consultation to aid others in developing countries. Differentiable Business Model Blocks Customer Segments In a basic medical centre, the customer segment is; Those who need a professional diagnosis for their individual health problems. Consulting these individuals with the objective of achieving full wellbeing. In the Australian Health Project, it has this exact customer segment, while also expanding to those customers in developing countries. This segment includes those communities in developing countries who are in need of health check ups and health education. It is important to note that a social enterprise, such as the Australian Health Project, does have the same customer segment (and more) to a regular medical centre. This clearly conveys that the social enterprise also operates like a normal business with very little limitation in comparison to a regular business. Value Proposition This social enterprise has further value added for each customer in Australia because they know that through their consultation with their GP etc., they are helping those in developing countries with health to the individuals who need it the most. Having an extended value proposition such as this, increases the breadth of the customer segment and debatably the market share. This is due to the customer consciously choosing the social enterprise over a normal medical centre because they know they are directly helping those in developing countries. Key Resources The Australian medical centres will need resources such as medical equipment, doctors, medical professionals and receptionists. With the added social enterprise aspects of the Australian Health Project, the added key resources include the resources necessary to create a program in developing countries. This includes; qualified doctors, medical equipment, supervisors and project managers. Key Activities In the Australian medical centres, the key activities will be for doctors and medical professionals to consult and provide Australians with health information. The added social enterprise activities includes executing the key resources into the developing countries. Justify the Business Model (Christine) In developed countries, if you ask anyone what the two most important aspects of having a good life are, the general answer would be having food and good health. In developing countries, the latter is often the one that is overlooked mainly because the vast majority of the population simply do not have free access to doctors/medical staff. Sadly, in many cases, due to poverty, medical treatment is not readily accessible. According to the World Health Organisation, infectious disease affects some 3 billion people in the less developed world. In many developing countries, many people do not have access to immunisation which causes health problems for babies and toddlers. Simple ailments such as diarrhoea and dehydration in children go untreated and sadly in most cases, result in death. Diarrhoeal diseases cause illness and death among children younger than 5 years in low-income countries (Kotloff, 2013) Another issue in surrounding health in developing countries that is often coupled with poverty is lack of knowledge. For example, as we know performing CPR does save lives, however, lack of knowing how to administer CPR does result in death, this is where the Australian Health Project steps in to provide some valuable information and will be able to demonstrate the importance of administering first aid. Not only will the Australian Health Project be teaching basic skills, but it will also teach a valuable lesson in saving lives should the need arises. This social enterprise business model focuses on health care, something that is so important to the health, wellbeing and longevity of everyone. The Australian Health Project is paramount in preventing the loss of lives through medical treatment. In communities where access to medical staff is not so readily available, the Australian Health Project will ensure that medical assistance will be provided. People with chronic diseases spend most of their time outside of a primary health care setting. Primary health care services that establish formal linkages with their communities leverage untapped resources and help to ensure healthy and facilitative environments for people, especially elderly people living with chronic diseases. (Farmer, 2001) In a lot of aspects, The Australian Health Project will become critical to children, the company will play a key role in preventing illness associated with lack of immunisation which will substantially help in preventing child mortality, additionally, parents can be educated about the importance of childhood immunisation As highlighted, there are many factors that contribute the untimely death of many. By providing the medical attention many need, the rate of mortality will be decreased, communities will be more inclined to offer help to others after acquiring knowledge on how to administer first aid. Medication will be readily available, people do not have to wait for the next round of volunteers to fly in and hope their community will be seen to, doctors will be readily available to treat anything that is unwell. The Australian Health Project will be paramount to saving so many lives and ultimately ensuring people have a healthier life with readily available medical treatment Identifying Challenges (Steve) Setting up and running a new enterprise, whether socially based or a traditional for-profit business, presents the entrepreneur with many challenges. The Australian Health Project is no exception to this rule. For the purposes of this paper three major challenges will be identified and defined. The next section Overcoming Challenges will suggest strategies that will endeavour to address these challenges. The three challenges identified for this paper are: Financing the enterprise. Attracting personnel Creating a marketing strategy. Finance Having a mission to change the third world through better health practices and education that are financed through the Australian Health Project clinics is an exciting concept which, will remain a concept if financing the operation from conception through to maturity isnt taken into account and planned for. Attracting traditional investors to finance an enterprise that offers low profits compensated by the promise of social impact may be difficult. According to Bugg-Levine, Kogut and Kulatilaka. (2012) The social value of supplying affordable healthcare to poor people is important, however, low financial returns to investors can be problematic. This has been aptly demonstrated by President Obamas Affordable Care Act (ACA), which endeavours to provide affordable health services to poorer people in one of the richest countries in the world. The ACA has been dogged by controversy since its inception largely based on disagreements regarding how to finance health care to the poor. (Althou gh the ACA isnt a social enterprise it does serve to highlight the complexities associated with financing health projects). Attracting Personnel As with any enterprise building the right team to move the venture forward is crucial. Attracting competent team members who fit the enterprises culture, work ethic and mission is standard to any organisation, however, the social enterprise must do this in an environment of scarce resources, high flexibility and often low financial rewards. Harris and Kor. (2013) note that, attracting and retaining staff to social enterprise presents many challenges, overcoming these challenges will be crucial to a social enterprise's mission and survival. Creating a Marketing Strategy Having the best service in the world that no-one knows about is a guaranteed path to failure. Once the business model has been built, financing secured and a good team assembled, relationships need to be established with customers who will purchase the services in Australia and with the beneficiaries who will receive the services in the targeted third world countries. Limited marketing budgets will often exclude social enterprises from mainstream media options such as Television and Radio. The social enterprise will need to carefully analyse the markets they serve, the consumer and beneficiaries of their services and formulate a targeted strategy that aims to build long term beneficial relationships with all stakeholder groups. Overcoming Challenges (Steve) Finance In order to consider the funding requirements of Australian Health Project, the enterprises life-cycle needs to be identified so that targeted funding options for each stage of cycle can be established. Seed / Startup Survival / Establishment Growth / Expansion Maturity Seed / Startup In the initial stages of a social enterprises inception there is a need to finance the research and prototyping that is required to create the business model and the product/service/value-proposition that will drive revenue creation. The problem most startups encounter is there is no proven history, track record assets or collateral that would give traditional investors, such as banks, the security they require to invest. In the seed/startup phase many enterprises will adopt a mix of options that tap into the entrepreneur's own resources and networks: The Three Fs Friends Family Fools Bootstrapping Doing many of the startups functions in-house: ie web development, social media, IT, graphic artwork etc. Self-Financing Credit cards, personal loans Grants Foundations, Government and impact minded individuals Although meagre, these methods allow the fledgling enterprise to turn the idea into a marketable product/service, start gathering the right team and identify and approach customers and beneficiaries. Survival / Establishment The Three Fs Friends Family Fools Philanthropic Organisations Program Related Investments (PRIs) Finite funding for a specific project. i.e. motor vehicle purchase These methods allow the venture to begin to refine their offering, establish a market share, conserve precious capital, build internal infrastructure and cement relationships with customers and beneficiaries. Growth / Expansion Traditional Debt Bank Loans Credit Union Loans Credit Card Finance Community Development Financial Institutions (CDFI) At this stage of development the Australian Health Project will be relatively established, with formal accounting procedures, IT and HR systems in place. A track record is beginning to build as well as collateral and capital is growing. This stage requires more team building and opposition / competition needs to be addressed. Maturity With an established foothold in the market, the mature Australian Health Project hopefully has a track record of proven sales to customers, a history of impact and value to the beneficiaries and a proven revenue stream, cash flow and dividends for all stakeholders. The enterprise should be able to self finance items like payroll, loan servicing and utilities etc. via its own working capital. Long term debt in the form of Bank loans may be advantageous to enable the purchase of new facilities or capital equipment. There may also be the option of raising capital by floating The Australian Health Project on the Stock exchange via an Initial Public Offering (IPO). Attracting Personnel During the stages of growth detailed in the last section the team at The Australian Health Project will need to be focusing on creating a viable team of professionals and volunteers that will become not only team members but also Australian Health Project advocates and mouth pieces, the value of this development will be discussed in the following sections. A key strategy will be to guide the Australian Health Project into becoming strong team focussing on the three types of capital that relate to the team: Human Capital Referring to the workforce and stakeholders of the Australian Health Project Bonding Social Capital The relational ties within the Australian Health Project Bridging Social Capital Important links external to the Australian Health Project If the Australian Health Project nurtures a high degree of Social Capital, both bonding and bridging, the organisation will attract volunteers, donors and champions driving shared value and forming the enterprise into a Charismatic Organisation. Charismatic Organisations aim is to instigate and nurture their social capital in two ways: THe first way is a strong organisational core (Bonding Social Capital) and the second is to reach out to create a strong network (Bridging Social Capital) Sagawa Jospin. (2009) Strong Core. Mission-driven motivation Can-do culture Data-driven decision making Purposeful innovation People-focused management Strong Network Compelling communications Active outreach Meaningful involvement The development of a Charismatic Orginisation that builds bonding and bridging Social Capital into its DNA will create an environment for all stakeholders to be aspirational in regards to their role in the organisation, have the avenue to have their say and express their opinion in regards to organisational issues and direction, Join in with company rituals and celebrations and turning each stakeholder into and advocate and spokesperson for the Australian Health Project in their community and beyond. Creating a Marketing Strategy Haven Products (https://www.havenproducts.co.uk) was established in Scotland as a social enterprise in 1946. Their mission is to create real and sustainable jobs for people living with disabilities. In many ways Havens journey reflects the strategies discussed in this paper. The reason for including Haven as an example for a marketing strategy is because of their ethos when it comes to achieving their mission. Following the Theory of Change, Haven has clearly understood that to achieve the Outcome of real and sustainable jobs their Outputs (Products/Services) need to be of a consistently high quality and value. Its the quality, price, timeliness and customer experience that keeps bringing the customer back and, in-turn, allows the enterprise to achieve their missional goal of real jobs. The Australian Health Project will be operating in a very competitive arena where Federal and State Governments as well as private medical practices dominate the market. It will be essential for the enterprise to create an offering and value proposition whose quality, price, timeliness and customer experience is of sufficient gravity to attract customers away from existing services thus allowing The Australian Health Project to achieve its stated mission of providing health care and education to its target beneficiaries. A marketing strategy needs to be informed by good information and establish strong communication channels:. Understanding the Target Audience Size of the target - how many people will realistically become clients Structure - Key demographics, socio-economic status, gender, age etc. Trends - What is popular re. Health care now, what will be popular in the future Needs and Characteristics - Obstetrics, Chiropractic, Physio ect. Unique Selling Proposition What is offered that sets The Australian Health Project apart Efficiency - better price and service Leadership - cutting edge technology Audience Intimacy - Creating a close relationship with clients Communication Is The Australian Health Project getting their message out to the community Healthcare that helps you and in-turn people from poorer countries get benefits as well Storytelling (a key outcome of the Charismatic Organisation) Every stakeholder of The Australian Health Project excited, properly informed and telling everyone they meet about the great impact The Australian Health Project has achieved. On the beneficiary side of the marketing task, there needs to be a Bottom of the Pyramid (BoP) approach to creating the product and value proposition that will meet the needs of and be culturally sensitive to the beneficiary market that has been targeted. Prahalad (2012) Conclusion This paper analyzed the importance of social enterprise through the creation of a business model based upon the social enterprise foundation. The business model included customer segments, value proposition, identification of key resources and activities. After justifying the selected business model, three key challenges were identified, which included financing the enterprise, attracting the personnel and creating a marketing strategy. To overcome these challenges, appropriate implications has also been provided in this paper. For the finance related issue, the enterprise should identify the targeted funding options for each stage of enterprises life cycle. For the next issue, it has been suggested that building a strong core, a strong network and meaningful involvement, potential personnel can be attracted. To resolve the third issue, some strategies like understanding the target audience, unique selling proposition, establishing strong communication channels and sharing informatio n with the stakeholders would be beneficial for the enterprise. Moreover, it has been interpreted that a bottom of the pyramid approach can be implemented for creating value proposition, which would meet the needs of targeted audience and the enterprise would be able to address the culturally sensitive aspects of the project. This assignment would help the marketer to develop a sustainable social enterprise.