The competitive advantage of social
entrepreneurs
Mark Opschoor 11377755 MSc Entrpreneurship Supervisor, dr Vinig University of Amsterdam Vrije Universiteit 15-08-2017
Index
Abstract ... 4
Introduction ... 5
Theory ... 7
Porter’s five forces model ... 7
Criticism on Porter’s five forces model ... 12
Conceptual model ... 13 Method ... 15 Results ... 17 Interviewees ... 17 Data collected ... 19 Competitive advantage ... 21 Threat of entry ... 22
The power of suppliers ... 24
Threat of substitutes ... 27
Rivalry among existing competitors ... 27
Power of buyers ... 29
Tweaking the five forces into a toolset ... 31
Conclusion ... 33 Discussion ... 34 References ... 35 Appendix ... 38 Appendix A -entrepreneur 1 ... 38 Appendix B -entrepreneur 2 ... 45 Appendix C -entrepreneur 3 ... 50 Appendix D -entrepreneur 4 ... 54 Appendix E -entrepreneur 5 ... 58 Appendix F -entrepreneur 6 ... 64 Appendix G -entrepreneur 7 ... 70 Appendix H -entrepreneur 8 ... 76
Statement of originality
This document is written by student Mark Opschoor, who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Abstract
Social entrepreneurship is a rising phenomenon. An increasing number of entrepreneurs are aiming to solve social solutions through a healthy and stable company. Due to this increase in social entrepreneurs, more and more researchers are looking into the concept. This research connects social entrepreneurs to the widely used five forces model of Michael Porter. The study modifies Porters theory in order the fit this with the views of social entrepreneurs. The original five forces model indicated the competitive advantage of analysed firms. This research indicates that social entrepreneurs are not primarily looking for competitive advantage, while they are willing to have competitive advantage, but that the social entrepreneurs are looking for social competitive advantage. This in combination with added social influences created a toolset, usable for social entrepreneurs.
Introduction
The entrepreneurial world is changing, as entrepreneurs shift their goals. For many entrepreneurs, social goals are getting more important (Austin, Stevenson & Wei-Skillern, 2012; Zahra, Gedajlovic, Neubaum & Shulman, 2009). Entrepreneurs adopt business models to solve complex and persistent social problems through creative solutions. In this way those entrepreneurs make diverse contributions and have significant impact on their surroundings (Zahra et al. 2009). As there is not one single worldwide accepted definition of ‘normal’ entrepreneurs, the same applies to this new phenomenon. There are many different definitions for those so called social entrepreneurs, and researchers throughout different academic disciplines are researching this matter (Dacin, Dacin & Matear, 2010; Dart, 2004; Leadbeater, 1997). Choi and Majumdar (2013) even stated that a universal definition is hardly possible. Therefor they proposed a cluster concept, in order to advance the research possibilities of social entrepreneurship. Not being able to accept one clear definition is due to the wide difference in domains social entrepreneurs emerge in. This can be in non- or for-profit firms, the social sector, or even in a combination of those (Christie and Honig, 2006; Short, Moss & Lumpkin, 2009; Weerawardena & Sulivan-Mort, 2006). Dacin et al. (2010) gave an overview of some of the definitions mention in the literature. This list consists of 37 different definitions. There is some common ground in this list, as most of the researchers empathised that, within the entrepreneurial activity, entrepreneurs (and their firms) do not focus solely on financial gain, but also on solving or reducing a social problem. Sometimes scholars further elaborate in what type of organization this activity should take place, being non-, for profit, or a social sector. For this research, a slightly changed definition of Yunus (2008) will be used:
Social entrepreneurship is; any entrepreneurial initiative with a focus on helping people, and solving social issues, this initiative may be for-profit, or non-profit.
Some questions arise, how do social entrepreneurs survive in the current ever-changing market? Do they receive sustained competitive advantage since they have a social focus? Do customers choose their product or service, because of their focus? Or do social firms need to work on their sustained competitive advantage as they were a ‘normal’ firm?
Porter (1985 and 2008), described competitive advantage in his five forces model, and many researchers accepted this model (e.g. Weeawardena & Sulivan-Mort, 2001; Hyvarinen, 1990; Lengnick-Hall, 1992). Multiple academics created overviews of the theory, and how to use the model in order to conduct an analysis (Dobbs, 2014; Barney, 2011). This model is created for
industries and firms with a focus on revenue and profit, and there is a gap in the research considering the competitive advantage of social firms. Porter and Kramer (2011) showed that all firms should adopt the concept of shared value, creating economic value in a way that also creates value for society by addressing its needs and challenges. As companies must take the lead in bringing business and society back together. Shared value is not social responsibility, but a new way to achieve economic success (p.4). The focus of Porter and Kramer is still on the financial aspect, gaining financial success while doing social work. This is different from social entrepreneurship, as the core is the business is addressing the social success.
Servaes and Tamayo (2013) analysed the impact of corporate social responsibility (CSR) on customer awareness. They found that, if CSR is aligned with the previous reputation, customers reward this. With a side note, that customer channels are important. But what if a firm starts from this social goal. One of the main examples is Tony Chocolonely, they sell good chocolate, but with their revenue they want to make the chocolate trait 100% slave free. Is their success in this formula, or is the chocolate just superior? Does the social activity affect the price of the products? This research will use Porter’s five forces model and will analyse the social entrepreneur to answer the following research question:
How does Porter’s five forces model apply to social entrepreneurs, and if needed, can the model be turned into a toolset for social entrepreneurs?
Through this question this research will contribute to the social entrepreneurial field and create a framework for social entrepreneurs and researchers. By supplying possible social entrepreneurs with tools which helps them with starting or tuning their company, new possibilities for research will arise, due to the increased sample pool.
In the following chapter, a theoretical overview will be given, followed by the conceptual model. Chapter three will describe the methods used, the fourth chapter will be the results chapter, and the final chapters will be the conclusion and the discussion.
Theory
The theory of Porter will be described and turned into a conceptual model, which will contribute to the research as a framework to analyse social entrepreneurship and, if needed, will lead to a toolset for social entrepreneurs.
Porter’s five forces model
Porter describes his model as the five forces that shape industry competition (2008) (model 1). The five forces are; Threat of entry, the Power of suppliers, the Power of buyers, the Threat of substitutes, and Rivalry among existing competitors. An analysis of the forces creates an indication of the competitive advantage of industries and firms. Porter’s five forces model is an easy to use, but powerful tool to understand the competitiveness of the business environment of a firm.
Competitive advantage
The main goal of traditional company’s is to acquire and sustain competitive advantage. An advantage a firm has over it competitors. This advantage enables them to increase their profits, this can be through an increase in sales or greater margins. Giving them the ability to survive in their market, fence off competitors, and sustain and/or increase their market share.
Threat of entry
As new entrant to the industry brings new capacity and desire for market share, the prices, costs, and rate of investments necessary to compete are effected. This influences the profit potential of an industry, e.g. when the threat of entry is high the prices should be low and investments are needed to cut out the competition. The threat of entry depends on the entry barrier and the reaction a new entry can aspect from competitors (p. 26).
Entry barriers have seven major sources. 1. Supply-side economies of scale. Entranced firms have an advantage over new entry since they are already producing and can spread their fixed costs over more units. While a new entry needs to, or dislodge an already entrenched competitor by starting big, or accept a cost disadvantage. 2. Demand-side benefits of scale – also known as network effect. Buyers trust the larger existing companies and new entries need to convince the potential buyers of their product. Another part of supply-side economies of scale is having a network of fellow customers, other people with the same product. 3. Customer switching costs, switching costs are fixed costs which occur when buyers change suppliers. For example, switching from Iphone to Samsung phones, a customer needs to buy new chargers for the new phone, a new phone case, and other complementary products. The costs are relatively low in this example, but may increase with other products or services. 4. Capital requirements, starting a company costs money, building an inventory, getting space, getting customer credit, and more. More capital needed means a bigger entry barrier, especially unrecoverable expenditures increase the risk of investment and thus the entry barrier. 5. Incumbency advantages independent of size, no matter the size, incumbents may have costs or quality advantages not available for rivals (p.27). This can be in the form of specific (and protected) technology, better raw materials, geographic location, brand name, or efficiency through experience. 6. Unequal access to distribution channels, new entries need to distribute their product or service, which can lead to difficulties. For example, new food items need to replace currently shelved items. This can be done through promotion, low pricing, or other means. Sometimes access to the channels is so high that new entries create their own distribution channels, to bypass current distribution channels. 7. Restrictive government policy, the effect of the government in new
entries is huge. As they can increase or decrease the entry barrier. Increasing it through policies or decreasing it through e.g. subsidies.
The entry barriers will be indicated differently by each potential entrant. Depending on history, available capital, or companies in related industries. Apart from new entries finding creative ways to avoid some apparent barriers.
Expected retaliation. The possible retaliations of an incumbent also influence potential entrants. If the expected reaction is vigorous and protracted enough the potential profit may fall below the capital costs of the new entry. Porter (p. 29) stated a list of indicators for expected retaliation:
• Incumbents have previously responded vigorously to new entrants.
• Incumbents possess substantial resources to fight back, including excess cash and unused borrowing power, available productive capacity, or clout with distribution channels and customers.
• Incumbents seem likely to cut prices because they are committed to retaining market share at all costs or because the industry has high fixed costs, which create a strong motivation to drop prices to fill excess capacity.
• Industry growth is slow so newcomers can gain volume only by taking it from incumbents.
New entries should analyse the indicators to react on possible retaliation when they continue with their company.
The power of suppliers
If suppliers are powerful, they will capture more value for themselves. This can be done by, charging higher prices, limiting quality or services, or shifting costs to industry participants (p. 29). Companies depend on a large range of supplier groups; these groups have more power if:
• They are more concentrated than the industry it sells to. • The supplier group does not heavily depend on the industry.
• There are switching costs required to change suppliers. Specialized equipment etc. • They offer differentiated product, like patented drugs.
• They offer a product or service which does not have a substitute product. • They have the possibility to enter the industry themselves.
The threat of substitutes
Substitutes perform the same or similar function as the company’s product or service, only through different means. Substitutes are always present, but easily overlooked. Often, they appear to be something completely different than the company’s product or service. An example given by Porter (2008) is a Father’s Day gift, a power tool could be a substitute for a football match ticket. A substitute is also the choice to do without the product, buy second hand products, or to do it yourself. Increase in the threat of substitutes decreases the company’s profitability. A company should distinguish itself from the substitute product through, performance, marketing, or other means, otherwise the potential profitability will drop. The threat of a substitute is high in case (p. 31):
• The price-performance ratio is similar or better than the company’s product or service. • The buyers switching costs are low.
Companies should be on the lookout for scenarios in which they are the substitute, even when they were not before. They could wheel in additional profits this way.
Rivalry among existing competitors
Rivalry among competitors can take many forms, e.g. price discounts, new products, advertisement, and improvements. The higher the rivalry the lower the potential profit of a company. The regression of potential profit through rivalry depends on the intensity of the competition, and the base on which they compete. The intensity of rivalry is the highest in case (p. 32):
• The industry does not have an industry leader, and competitors are numerous or are roughly similar in size and power.
• The industry grows slowly. This means that the companies need to fight for their market share.
• Exit barriers are high. These barriers keep companies in the market even though they may be earning low or negative returns. Excess capacity remains in use, and the profitability of healthy competitors suffers as the sick ones hang on.
• Rivals have (market) leadership aspirations, especially if their goals go beyond economic performance, like prestige.
• There are misread signals between firms, due to lack of familiarity with one another, diverse approaches to competing, or differing goals.
Not only intensity reflects the strength of rivalry, it also reflects in the basis and dimensions on which the competition takes place. If two companies compete in the same dimension, this has a major influence on profitability (p. 32). This rivalry can be extremely destructive for the potential profits if it results in a price war and price competition is most liable to occur in case (p. 32):
• Both (or all) competitors have similar products or services, and low switching costs between them. Lower prices help to win new customers.
• Fixed costs are high and marginal costs are low. Companies need buyers to cover the fixed costs, and will sell their product or service close to the marginal costs.
• The product needs to be expanded in large increments to be efficient. This disrupts the industry’s supply-demand balance.
• The product is perishable. This is not only applicable to fresh product, but also to almost obsolete computer models, old designer clothing, or hotel services.
Non-price rivalry/competition is less likely to decrease the potential profitability of firms. This rivalry often increases the costumer value, and leads to higher prices, decreasing the number of substitutes, and increases the entry barrier for new entrants. This way rivalry can be a positive sum, and increases the profitability of the industry.
The power of buyers
Powerful costumers can demand a lot of the company. They can force down the price of the product or service, demand more quality or personal time, and have the possibility (if not in a monopoly) to switch to other players in the industry. The power of the customer increases in case they have negotiating leverage. A customer group has leverage in case (p. 30):
• There are few buyers, or each one purchases in volumes that are large relative to the size of a single vendor. Large-volume buyers are particularly powerful in industries with high fixed costs.
• The industry’s products are standardized or undifferentiated. • Buyers face few switching costs in changing vendors.
• Buyers can credibly threaten to integrate backward and produce the industry’s product themselves if vendors are too profitable.
• The product it purchases from the industry represents a significant fraction of its cost structure or procurement budget. Here buyers are likely to shop around and bargain hard, as consumers do for home mortgages.
• The buyer group earns low profits, is strapped for cash, or is otherwise under pressure to trim its purchasing costs.
• The quality of buyers’ products or services is little affected by the industry’s product. Where quality is very much affected by the industry’s product, buyers are generally less price sensitive.
• The industry’s product has little effect on the buyer’s other costs. Here, buyers focus on price. Conversely, where an industry’s product or service can pay for itself many times over by improving performance or reducing labour, material, or other costs, buyers are usually more interested in quality than in price.
Criticism on Porter’s five forces model
Every much-used theory receives some criticism. Even so for the five forces model of Michael Porter. Porter’s model does help to understand and simplify micro economics. The way the model is constructed visually and build up logically is relatively difficult to apprehend. Managers prefer simple terms for analytical concepts, this makes it easier to adopt the theory and act accordingly (Mintzberg, 1994; Quinn, 1980). Porter (2001) himself also indicated that changes like the internet influence the five forces model, creating more positive and negative influences on the different forces. Examples of both can be given. E.g.; a positive effect on the bargaining power over channels is that the internet eliminates powerful channels or improves bargaining power over traditional channels. While a negative effect on the same force can be, that the internet reduces switching costs (Porter, 2001, p.5). The study of Porter (2001) indicates that changes on the forces can, and need to be made in order to keep up with the constantly changing world.
More criticism arises from a strategic thinker and writer called Tony Grundy (2006). He accentuates the interdependencies between the different forces. He pointed out the following four relations. One between the power of buyers and the threat of new entry, buyers may encourage new players to enter the market. Thus, the entry barriers are reduced. A relation between the power of buyers and threat of substitutes. Due to the active search for substitutes, possible substitutes may be encouraged to present themselves as such. The interdependency between threat of new entries and the power of suppliers is that new entries may integrate backwards to enter the market. This could be done by acquiring suppliers or through alliances.
Theory
Interviews
analysis
Data
influences
Adding
Creating
toolset
The last interdependency is between the power of suppliers and the threat of substitutes. As suppliers may seek to sell and market substitutes by leaping over the existing industry competitors.
In het paper, Grundy aims to further develop the five forces model. Some other aspects mentioned are combining and interrelating with other theories and models, prioritizing the forces, examine sub-forces (defined by Grundy), analysing industry mind-set dynamics and impact, and market segmentations to study the variations within the competitive landscape.
Conceptual model
The goal of this study is to make Porter’s five forces model applicable to social entrepreneurs and their enterprises. By transforming the data of the interviews into influences on the five forces, or even into one or more new forces on their own.
The theory leads to the core of the interviews. Porter’s forces are used as a coat rack for the researcher. The themes which are needed to be discussed are on there, from there the researcher will be able to create a baseline, and go deeper into the opinions of the interviewees. After the data is collected, it will be converted into influences or forces. This all together will turn into a tool set.
•Retaliation •Entry barriers •...
New entry
•Power of suppliers •...Suppliers
•What are the substitutes •Where can I be a substitute
Substitutes
•Intensity of rivalry •Market profitability •...Rivalry
•Customer leverage •Price sensitivity •...Buyers
The toolset will be changed into a linear model, in order to make it a clear and useable model for the social entrepreneurs. Turning it into a linear model does not mean that there is no feedback loop present. The entrepreneurs may need to go back to previous steps in order to proceed. Model 3 gives a visual overview of the predicted model. The blank spots will, if needed, be filled with the results collected through this study.Model 3, conceptual model
Method
The conducted research will be a qualitative research (Edmondson & McManus, 2007). This method is a good fit for the research due the possible new theory created with the adjustments to Porter’s five forces model, and the possible toolset leading from this.
Semi-structured interview
Porter’s five forces will be used to conduct a semi-structured interview. As a semi-structured, according to Bernard (1988), is best in use when conducting one-time meetings with multiple interviewees. Semi-structured research is a form of open interview, which allows the researchers to get a wider picture of the topic, while in the meantime the prepared question can make sure every aspect is discussed during the interview (Cohen & Crabtree, 2006). This way Porter’s five forces can be discussed, and with this information the model could be adjusted to fit social entrepreneurs. To make sure that every major part of the theory is discussed with an interviewee a topic list will be used by the researcher. The interview guide will consist of the following topics: entrepreneurial goals, threat of entry, power of suppliers, threat of substitutes, intensity of rivalry, profitability of market, costumer group leverage, price sensitivity, social goal influence on buyers, and additions of the entrepreneur. The interview process is flexible (Drever, 1995), enabling a broad spectrum of results. The interviews will be conducted and analysed in Dutch. For the results section, quotes will be translated to English.
Sampling
The sample pool can be determined as the social entrepreneurs. This study will focus on the entrepreneurs of companies. From every company only one sample will be used, because the vision of a company usually is the same for all the active entrepreneurs. The samples for the interviews will be found, first in the current social network of the researcher. Second, through snowball sampling, as these individuals may lead to new interviewees and so forth (Blumberg, Cooper & Schindler., 2014). Third, social hubs will be contacted to find social entrepreneurs willing to participate in this research. The first two are forms of non-probability sampling, which indicates that they may not be generalized over the population. The main advantage of this way of sampling is the increased speed in which the research will be conducted. Knowing people through your connections makes it easier to plan appointments, and ask the interviewees some of their precious time. To increase the external validity, and thus the generalizability of the research, additional interviewees will be found through social entrepreneurship hubs. As
there is no legal business form for social entrepreneurs, it is difficult to track them outside of the mentioned sampling methods. The target number of interviewees is eight interviewees.
Data collection
The data collected in the interviews will then be analysed with the use of qualitative analysation programs like Nvivo. This will be done through coding, going from each force of Porter, and see what each interviewee thinks about each force. Before the interviews are analysed the primary nodes will be created, each force will have a corresponding node, but if needed, new nodes will be added. This will especially occur in the form of sub-codes. Each different node may fall under one of the five forces, and thus will not receive a primary node. In the result section the complete table of nodes, sources, and references will be given.
Results
Analysing the transcripts of the interviews, the following results emerged from the data. First, an overview of the interviewees will be given. Second, the nodes in Nvivo will be discussed. Then, competitive advantage and each individual force of the five forces model will be discussed. Followed by adding forces to adjust the current model, which will lead to an usable toolset for social entrepreneurs.
Interviewees
The eight entrepreneurs all stated their own company goal, organisation, and the market in which they are active (table 1). For entrepreneurs with multiple social enterprises, all are mentioned. The names of the entrepreneurs and their companies are kept private to respect their privacy. As shown, the entrepreneurs are active in different fields, these entrepreneurs are chosen to conduct an analysis over different industries and markets. Besides the given company goal, all the organisations, except for the foundations, have a second primary objective; being a healthy and stable company which can rely on their own financial resources.
ENTREPRENEUR COMPANY GOAL ORG. ACTIVE IN ENTREPRENEUR 1 To supply as many children as
possibly with additional education, and to make education fun.
V.O.F. Education
ENTREPRENEUR 2 1. Profit-optimization through shared value, shared value first. 2. To create new opportunities for people with a distance to the labour market, by creating designer products from (building) waste. 1. B.V. 2. B.V. 1. Posting and training 2. Manufacturing
ENTREPRENEUR 3 Our primary goal is to keep people warm. A secondary goal is to employ people with a distance to the labour market, e.g. refugees.
ENTREPRENEUR 4 Making the world a little better though (circular) entrepreneurs.
B.V. Office
operation ENTREPRENEUR 5 To put young makers in the
spotlights, to help them achieve their goals.
V.O.F. Manufacturing and tailoring
ENTREPRENEUR 6 1. We want to enhance social entrepreneurship in the Netherlands. We want to do this by investing in the Dutch social entrepreneurial ecosystem. As well as inspiring other people to start their own social enterprise. 2. To prevent early MBO-dropouts. 1. B.V. 2. Foundation 1. Journalism and consultancy 2. Education
ENTREPRENEUR 7 We pursue profit in order to employ more special-needs clients/employees, give them better facilities, sports, and personal investments. To enhance their skills, and possibly drive them to a ‘normal’ job.
B.V. Packaging and
repackaging
ENTREPRENEUR 8 To create employment possibilities for people that mist their chance due or had a problem which led to not working or working below their educational level.
B.V. Engineering
Data collected
Using coding, comments of social entrepreneurs are mentioned under a node. The node creates an overview of the number of sources and references. As mentioned in the method section, the five forces of Porter were stated as the primary nodes. When started the sub-nodes came solely from Porter’s sources effecting each of the forces. Throughout the interviews additional (sub-)nodes were created. In table 2 an overview of the nodes used for this research are given. The several sub-nodes which did arise from the interviews are shown in the table. The most added nodes, are nodes considering the social aspects of the entrepreneurial activities of the interviewee. The number of sources indicate the different sources from which the coded data was collected. The combined number of sources and references indicated the scope of the nodes. A high frequency, but a low source count indicates a node as being important to one interviewee, while a high frequency combined with a high source count indicates a preference of the subject with many interviewees. This does not directly imply that all the sources have the same view on the subject. Therefore, all the references will be analysed and discussed in the following sections.
NAME – NODE SOURCES REFERENCES
THREAT OF ENTRY - -
ENTRY BARRIERS 5 15
EXPECTED RETALIATION 6 10
NEW ENTRIES - PARTNERSHIP 7 20
POWER OF SUPPLIERS 3 6
SUPPLIER AND/OR PARTNER 4 8
CHOOSING SUPPLIERS 4 4 SOCIAL INFLUENCE ON SUPPLIERS 8 21 THREAT OF SUBSTITUTES 4 11 SOCIAL INFLUENCE ON SUBSTITUTES 1 1 POWER OF BUYERS - - BUYER LEVERAGE 4 7 BUYER INFLUENCE 4 8
PRICE SENSITIVITY 6 18
QUALITY 6 23
SOCIAL INFLUENCE ON POWER OF BUYERS 8 26 RIVALRY 6 16 INTENSITY OF RIVALRY 8 30 TYPE OF RIVALRY 7 13 MARKET PROFITABILITY 5 11
GOAL & RIVALRY 6 14
COMPETITIVE ADVANTAGE - - SOCIAL GOALS 8 22 MEANS 8 29 REASON 6 14 VISION 7 41 UNIQUENESS 6 8
Competitive advantage
Throughout the interviews the views of the entrepreneurs on competitive advantage, vision, social goals, and uniqueness came forward. Each of the interviewees stated the goal of their company, and as shown in table 1, all the entrepreneurs have a primary social goal. This goal can and may be extreme for some of the entrepreneurs. While other entrepreneurs, such as entrepreneur 2, keep it apprehensible and more realistic in their eyes. But what is competitive advantage for the social entrepreneurs?
The results are mixed, many of the interviewees shared the vision of entrepreneur 6; I prefer not to talk in terms of competitors, I prefer allies. You cannot have a competitive advantage over your allies. You work towards a common goal, solving the social problem on which you focus your company. He emphasises this with the following statement; in core, the goal of your social enterprise is to eliminate your own market, instead of increasing the market. Entrepreneur 1, seconds this by stating that he is willing to close his enterprise if it helps solving the social issue. This can be seen as a pure vision of social entrepreneurs. A striking example of entrepreneurs 6’s view on allies is that he is willing to share the information he gathered, because; it would be a waste if we kept al the knowledge for ourselves, so let us try to put it out there, in order to make it applicable for as many companies as possible. This way he is cutting into his own consulting market, reducing his potential profit.
But social entrepreneurs also need to have a source of income, as entrepreneur 5 stated; Of course, it would be perfect if I could live from it (it being the company). It is an equilibrium (entrepreneur 1 and 6). A difficulty in social entrepreneurship is that you always are on a line. Do I choose for short-term profit, which may make it easier to reach my long-term goal? Or do I stick with my long-term views, staying closer to my vision, with risk of falling? (entrepreneur 1). This can be translated to, do I go for short term competitive advantage, or do I focus on my vision and skip on the possible profit.
The interviews indicated that entrepreneur 1, 3, 6, and 7 are leaning to an impact first, money second approach. For these entrepreneurs, competitive advantage is not the goal of their activities, as competitive advantage may discourage competitors to solve the same social issue. Entrepreneur 5 seems to be wiggling, the entrepreneur indicated that they want to have an advantage over other photographers, but if someone is addressing the same social goal through other means or disciplines the social goal comes first. While entrepreneurs 2 and 4 indicated that their social goals are still primary, but they welcome any competitive advantage as they see
the need to fight the competitors. Entrepreneur 2 supported this statement by saying I am not ashamed to say that I am result driven, but it is because I want other value’s and the credo of his first company, results-oriented with an eye for the individual. In order to live by the credo, you need competitive advantage over your competitors. The same goes for entrepreneur 4, the company aims for competitive advantage, the business case needs to be good first. There are many entrepreneurs that went for super-social directly, but they did not make is.
Overall, a larger part of the entrepreneurs sees classical competitive advantage as unnecessary. They are looking for an equilibrium between survival and eliminating their own market. They want to be a healthy company, but any benefits arising are redirected into solving the social problem. Some of the entrepreneurs are even willing to sacrifice their own company, and thus income, to solve the social issue they are addressing. While others are more result-orientated and increase their competitive advantage by being a social enterprise. To answer the questions which was stated in the first paragraph of this section; what is competitive advantage for social entrepreneurs? Competitive advantage can arise, and will be accepted by social entrepreneurs, but the core of the interviewed entrepreneurs does not see this as the goal of the company. As they are willing to sacrifice their competitive advantage in order to support their social goal.
Threat of entry
Porter (2008) mentioned expected retaliations and the entry barriers as the influencers for new entries. For the entry barriers, he identified 7 mayor sources. Being, supply-side economics of scale, demand-side benefits of scale, customer switching costs, capital requirements, incumbency advantages independent of size, unequal access to distribution channels, and restrictive government policy. These are barriers to enter, and in Porter’s model new entry is a threat. But do social entrepreneurs experience this as such, and what is their view on new entries?
As with every new activity there are entry barriers. Those are not exclusively for non-social enterprises. Starting a company asks for investment money, time, passion or believe in the product or service, and more. Porter summarizes this through the mayor sources. Although, some of the barriers for new entries are deliberately lowered by some of the entrepreneurs. For example, entrepreneur 6 and 7 regularly have consulting stile meetings with potential new social entrepreneurs. And almost all the entrepreneurs are willing to share their knowledge with new entries if they support their social goals. This does not mean that it is easy to enter the social market.
Especially in the healthcare and rehabilitation market the barriers are high. Due to strict control from the government, and rigid partners is it difficult to enter. If you start, you need to have ins into healthcare facilities, which are inflexible. They do not pair up with you just because you have a nice idea, you need to grow first; they do not want to place their (special needs) clients at a place which goes bankrupt in 3 weeks. They want some continuity to show for before they collaborate: entrepreneur 7.
It is also difficult to create a well suiting business model: entrepreneurs 6. You do not know if your idea is going to work and you need to find investors willing to invest in the social problem you are addressing. Besides that, the investor must be willing to accept that a part of the profit will be redirected into fixing the social problem, decreasing the return for the investor. In addition, entrepreneur 4 said: You choose for projects which are less profitable; that is difficult to do. When you start a normal company, it will be difficult to close your books with a profit. If you choose a company which deliberately chooses project with lower profit margins, this will be even more difficult. While other social entrepreneurs and supporters may lower certain entry barriers, the entry barrier, partly summarized under Porter’s capital requirements, will be higher.
The expected retaliation can influence potential new entries. Each of the entrepreneurs gave their own view on what they would do when a new firm would enter their market and addresses the same social issue. Entrepreneur 1 would start to look at possible collaborations; we learned a lot and I would say, join our path. We will learn a lot from them as well. I am open for collaborations, instead of letting them re-invent the wheel. Entrepreneur 2 would cheer new entries on as long as they have a similar performance, if they conduct their business another way, this may influence the market negatively. He is concerned about the market, and the view on their solution for the social issue at hand. If another player takes advantage of the market it can ruin their solution, and their market for the coming years. Entrepreneur 3 would also stimulate new entries. Hand in hand trying to organize the best for the people. Is it my product? That would be nice. But is it another product? Of course, we would stimulate that too. For entrepreneur 4 new entries with the same goal would not feel as competitors. As the players support the same goal, making the world a little bit better, it is easier to trust one another. With entrepreneur 5 it really depends on what type of service or product the new entry offers, if the new entry does photography as well, we will not be the best of friends. But if it is an economic person for example, I will invite him to collaborate with me. With a collaboration, I am willing to support them to do set up the same kind of shop, but if they do exactly the same than not. I
do not see the useful addition then. The same principle applies to entrepreneur 6, I would not like it if like it if someone copies us exactly, but if there are other platforms that provide attention to social entrepreneurship, then we are going to look at options to share stories. For entrepreneur 7, it is more about the location. Because of the areal restriction of their clients and thus social issue it wold not be appreciated if a likeminded person would start right next door. But the city is so big. We really want to be a social enterprise, so we work together with a lot of people. Entrepreneur 8 follows his social goal when discussing new entries. He will support new entries; new entries are a form of employment. They even host activities with their holding in order to support local entrepreneurs. In addition, when we become too big, and one of our employees takes up the task and starts to do it themselves, we will stimulate that. It is in our long-term vision and goals. I like to collaborate, even now people are coming me by who do the something similar. He is supporting them, and will contribute if its within his possibilities. Considering the pledged support new entries get from the already active social entrepreneurs, the expected retaliation is low, if not, non-existing. Some entrepreneurs want new entries to join their vision, and conduct the business in according to their views. They share their knowledge to make sure the social issue is addressed in the best way possible, without exploiting the market in a bad way. While others prefer new entries to do it a little bit different, if they do so, the entrepreneurs are willing to look at collaboration and support. The positive effect of current players is not discussed in the current literature provided by Porter. In the model which will be created in a later section of this study this influence on the threat of new entries will be added.
The power of suppliers
Many companies rely on their suppliers in order to conduct their business successfully. If the power of suppliers is high, they will capture more value for themselves (Porter, 2008). How do social firms conduct business with suppliers, and do their views on certain social issues effect the value captured by the suppliers? Are suppliers willing to join the cause, or do they focus on profit?
Choosing suppliers is difficult, companies become more dependent on suppliers (Boer, Labro & Morlacchi, 2001). Some of the entrepreneurs interviewed experienced this the hard way. For example, entrepreneur 2 has some difficulties with the supply of building waste. This led to the consideration if they should shift from their social goal. Their goal being; making their product for hundred percent out of waste, but should we not aim at a sixty percent target of the
production, so we have a fall back. This question led to some headache, as they needed to abandon their goal to survive. If the building company, which is their supplier, would be able to give them enough usable waste this would not be an issue. The company relies on their services, but due to the specific contract the two companies have together, getting waste from a different building company is no option. The supplier is, maybe purposely, limiting their services to entrepreneur 2, and is only conducting business with him if they need it for their social return. This is an indicator that the social enterprises are also experiencing the power of the supplier.
Being a social entrepreneur effects the amount of value the suppliers want to capture. Entrepreneur 3 stated an enormous influence from their social activities. You need to have a strong story, why did you create the company? It is quite rare that we have 130 supporting businesses. Big and small, they donate supplies to us, and did not ask anything in return jet. An important side note here is that his business currently is a foundation. But they are working hard to create a B.V. in addition to the foundation.
Entrepreneur 4 experiences a smaller effect on the willingness to reduce the captured value from the supplier. He does have a small advantage over non-social enterprises. He gets a small discount when buying inventory for his offices. But a larger contribution is from his space suppliers. We will hire seven hundred square meters extra, because we are social boys. It is a large Danish entrepreneur, he is very Buddhistic and believes in karma. What we do, but in a soberer manner, is linked to that. Because of that, we could get a cheaper deal. The government and housing corporations also support the social initiative over normal office operations. They are more interested, if we as operators exploit their building we bring different people, in comparison to cold ones, without a social idea. But he does not get or expect the same benefits from each of his suppliers. On the other site, we match somewhat less with regular real estate dealers, there you just need to offer enough, you do not get a benefit. The results for entrepreneur 4 are thus mixes, from part of his suppliers he harvests social benefits, while other suppliers do not grant these advantages.
This is also the case for entrepreneur 8, some of his suppliers are willing to help them. Their bookkeeper reduces his prices due to the combination of socialness and the fact that the firm is still a start-up. They also received a great discount on their rent, from the local government due to their social targets. But, with other companies, like software suppliers, they need to pay the regular rates.
Entrepreneur 3 selects his suppliers on their social views. Partly since they need to have social oriented suppliers to increase the social return they can offer their customers, and partly because of his principles, which impact do we have on the society with our hours. Their whole business case is also created together with their suppliers of business waste, so the whole existence right of the company is contributed to the social actions of their supplier. Their largest supplier is also their partner.
The same goes for entrepreneur 5, she relies on her suppliers in order to conduct her business. She co-creates new pieces for her store with young creators. Her suppliers are her partners. From other, non-partner, suppliers she experiences some benefits. Mainly in the form of housing. For example, I am working with another place where I can do a temporally exposition for my company. And there they find it important that I am helping young creators.
Large effects occur in the foundation of entrepreneur 7, and the effects are smaller with her B.V. We notice that suppliers are really involved, and think that we are a nice organisation. They are always willing to give their service for half the price or with a discount. With the B.V, it is different. Everything is more business-like. It works though, but not always that easy. An example of such a benefit is; we have this building, we explained our concept to the landlord, and he immediately dropped his price. He said: It will be great to have a company as yours in one of our buildings. So, she keeps trying, but her e.g. office supplier does not grant her any discount.
Entrepreneur 6 did not yet receive any refusals on his interview request. While his interviewees are very busy, and it is not easy for them to find spare time. He contributes this to their social views considering employment, and the vision of his medium. Entrepreneur 1 does experience and expects small benefits from their suppliers, but for now, the number of suppliers is too small to really put the finger on the reasons.
In conclusion, the social aspects of the entrepreneurial activities do influence the power of the supplier. Some of the suppliers have reduced their profit in order to support the social
entrepreneurs, but most of the time, they still want to make profit. This is logical, suppliers are businesses, and businesses need to make a profit in order to survive. Testing the suppliers to explore their social tendencies and possible partnerships is a logical step to make, and something that will be added to the further model.
Threat of substitutes
Every product or service has some substitutes. Of course, this applies to all the interviewed entrepreneurs as well. The first commonly shared substitute is not buying or donating money to the good or service. As a larger part of the interviewed entrepreneurs already have (partly) established businesses that substitute is skipped by their market. Many of the entrepreneurs offer a substitute for products currently on the market. They did not indicate any differences through their social influences. In this part of the model no changes need to be made.
Rivalry among existing competitors
Companies have competitors, this competition can take many forms. Porter stated two mayor influences on the force, rivalry among competitors. The first one is intensity of rivalry, and the second one is market profitability. Do social entrepreneurs have the same idea about competition or does this differ?
Competition increases the quality of products (Mussa & Rosen, 1978), as many of the competitors choose to compete on quality and not on price (Bradford, Huber & Yalch, 2008; Matsa, 2011). Entrepreneurs 1 and 2 subscribe this, I do not think that competition is bad. You do your best to create the best product or service possible together (entrepreneur 1). It is a free market, I am convinced by the “proof your value” principle. If that value is sufficient, then you may do business (entrepreneur 2). The entrepreneurs are aware of the positive effect of competition, and willing to compete with their competitors, while addressing the social issues. Entrepreneur 1 discussed competition as two-faced. Because of their social goal they compete with the regular players in the market, but also the foundations and NGO’s which are active in exploiting the service. His problem, the service provided by the foundations and NGO’s is inferior to the service of the companies. But only the players active, and invested in the market are aware of the lack of professionalism. Subsidisers and donors do not see how necessary it is to switch from service provider. Therefor he needs to compete on two different markets, while the other companies do not care for his social goal, and will focus for one hundred percent on paying customers. Giving them a mayor advantage, marketing wise.
A similar problem arises from entrepreneur 2. Many competitors compete on price, and a lot of buyers are persuaded to go to a competitor, but if he drops his prises the quality will suffer. But his products are people, and following his social goal, he cannot forget the individual. Less ethical competitors may not be as concerned with the people they are ‘helping’. Giving them a competitive advantage with clients, while the clients may not see the difference upfront.
Entrepreneur 3 welcomes and encourages competitions in his market. His main goal, keeping people warm needs to be reached. Is this through his product, that would be great, but if this is through other products or services he could only encourage this. His main vision on competition is providing the best quality possible.
While the market profitability of entrepreneur 2 is falling, the market potential for entrepreneur 4 is vast. The market for operators is growing hard, we do not want to grow with more than twenty/thirty percent in a year. It is now August, and I am refusing people, because we are touching our ceiling. This may influence his views on competitors, competition does not frighten me. He supports this statement, when you choose project which are less profitable, but give you more exposure, like office space for circular entrepreneurs. That is harder to do. In addition, he explained that it does not feel as competition, because the competitors serve the bigger cause, making the world a better place.
Entrepreneur 6 supports the latter. Of course, we want to be a leader in the market, but our most important mission is to share the ideas of social entrepreneurs. As stated before, he is willing to share his knowledge and stories with competitors. We could use each other’s network to extend the reach, I believe more in this kind of growth than that I want to be the only one. This view combined with the two-faced competition explains the views of entrepreneur 7. As she encourages competition to make sure each and every one, willing to work and struggling with labour issues, or disabilities can do so. With the help of these people she created a healthy and stable social enterprise. But to be healthy she needs to compete with non-social organisation, who do not care about wellbeing of people as much. They just want to do the job, and do it quick.
Due to the multiple markets in which entrepreneur 8 is active, a part of his activities is in an intensive market, while the other part of his activities is quite rare, and thus with low intensity on the market. But companies are not only competing for clients. Rivals, in both markets, are competing for labour forces, as there is a shortage on engineers. He does search for the talent in other places. Creating possibilities for his social target group, and encourages others do create jobs for people with missed opportunities as well. While he is looking for employees in less conventional places, he still believes in their qualities. They get a chance, but they need to take the chance, work hard, and meet their targets. Proofing themselves, and to take on the work instead of waiting until some else does it for you.
The influences Porter discussed are thus relevant for the social entrepreneurs. There is rivalry, they aim for quality, and need to compete pricewise. But they are not scared about competition, and just as with the new entries. They want competition, as social entrepreneurs do not see competition as such, but more like partners to solve the social issues. But social entrepreneurs need to be aware of the type of firms they need to compete with. When you support a social goal, competition on price could affect the quality of your product. The problem here is, your product is helping and/or solving the social problem you want to elude. Social entrepreneurs need to look at their competitors for partners and partnership. Together the social issue may be solved.
Power of buyers
Having no buyers equals having no business. Buyers can be very demanding, forcing down the price, demanding an increase in quality, and they can change to other players in the industry. As Porter named it, buyers have leverage, and can be price sensitive.
Buyers do influence the social entrepreneurs. Entrepreneur 1 emphasized this by explaining the willingness to change his approach to solve the educational issues. Normally he combines sport with educational tutoring, but if a kid suddenly says, I do not like sports, I want to draw. And if we have like ten kids, it is possible we start a drawing and tutoring class. He wants to pleasure his customers, but keeping in mind his original goals. His buyers are also price sensitive, this is due to the regular providers of tutoring and educational trainings. There are a lot of small companies which compete on the price. But do social incentives enable the possibility for higher prices? The answer was clear; no. Only when the price and the quality are (roughly) the same, customers consider the social aspect of the company, and then it increases the chances for the social company. It is also his own vision, customers should not think, oh that is sweet, that will be the reason I will put my child there. The product should be the most important.
A lot of the interviewees share this view. Everyone wants quality, I want quality. Even if you buy something from someone with a disability or such, you want quality. I stand for that; entrepreneur 3. What we do which each assignment is, we do the job, we do is it good, we do it how the client expect us to do. In addition, we look at the long term and implement that in our work; entrepreneur 8. First your product needs to be excellent. If you do not surpass or match the expectations, you will have a problem. How social or sweet you are, if you do not match the expectations it will not help; entrepreneur 4. The statement of entrepreneur five is even more direct; with the products or services we deliver I stand for the quality. I am convinced that every
social enterprise, it does not matter what you do, in the first instance should deliver a quality product or service. Being a social enterprise may never be an excuse to accept lower quality. For entrepreneur 7 quality is something that they distinguish themselves with from the competitors. We as a team are right on top of the quality of our product, it should be great. This is appreciated by our customer. All the entrepreneurs discussing this topic agree on this. The quality should be very important, you cannot be sloppy, or hope that you customers accept the lower quality. This is not fair, and will not help you in the long term.
Prices are also important. You cannot overprice your product, and expect that customers just accept this due to your social activities. Upping the price a little bit is possible, but do not overprice. The only exception here is for foundations, and charities. Entrepreneur 3 supports his foundation through confection sales, and buyers choose his venue for this exact reason. The norm in his industry is bulk for low prices. We do not approve that, I do not stand for that. I think everyone should just work in a relaxed manner. We need to provide the people with Dutch lessons, and we need to provide them with hot meals. So, we ask a reasonable price. Entrepreneur 7 has charities in her customers file. Charities do not mind paying a little bit more. They find it very nice that this kind of people do the work. They can flaunt with it a little, and often just have a nice willing with the cause.
Entrepreneur 8 is testing his clients before he states his social contribution. Some of his buyers believe that making social contributions is important, it is not like they would not conduct business with us otherwise, but it adds value. This while other buyers see the social group of entrepreneur 8 as a liability. Buyer do not have full trust in the workforce do to their past; can they do the job? Do they carry some weight or do they have a problem? It is what people think first, not everyone, but it can be a disadvantage. For this reason, he checks out his costumer first, if the costumer does not seems interested in the social aspects of his business, he just shows their credentials, and not from where they needed to come.
Social activities do effect buyers, but quality comes first. There is some added value for most (but not for all) of the costumers if they buy products and service from social entrepreneurs. They can flaunt a little, and some companies can write it off as social return. While quality comes first, many of the entrepreneurs stated that small problems may be forgiven easier because of their social activities. It also helps the entrepreneurs in advertising their product. With new costumers, we aimed on the social enterprise aspect; entrepreneur 7. The main benefit for the social entrepreneur is that they, when quality and prices are roughly equal, are more likely to be picked out of a line of competitors.
Tweaking the five forces into a toolset
Porter’s five forces model will be supplemented with the findings in this study. For some forces, there will be no added influences, while other do receive some additions. Overall the model of Porter is applicable for ‘normal’ entrepreneurs and social entrepreneurs alike. But, to create a toolset some changes are needed. As the main target is not receiving competitive advantage for their own, but for their social goal, the toolset will be tweaked to achieve this. While social entrepreneurs need to address the same issues as regular entrepreneurs. Can they achieve competitive advantage to solve their social goal through their (to be created) company?
The entrepreneur firstly needs to analyse the threat his company is for the current competitors, do they retaliate; what are the entry barriers, can they be overcome; and what kind of threat new entries can bring. They should also start looking for likeminded people which are already on the market. Is it possible for his company to use knowledge from other social entrepreneurs? Following the new entry analysis is the supplier analysis. In order to conduct business successfully you need to have suppliers. Are there currently strong supplies on the market which will support the cause of the social enterprise. If there are partnerships possible with suppliers, the social enterprise can receive a kick-start. If there are no partnerships to be made, are the suppliers willing to contribute to the cause through price-cuts, free ‘waste’, samples or other benefits? This way they may support the cause, but do not have responsibility. If none of the suppliers is willing to aid the social cause, a power of suppliers’ test is needed. Do they have a large amount of power, or do they not?
For the substitutes, the entrepreneur firstly needs to figure out what the substitutes for his products or services are. Are there many, and are they a threat to the company. The analysis should also be conducted the other way around. Is it possible to be a substitute, if so, what is needed to enter the market, and does it still suit my social goals?
Then a rivalry test is needed. Social entrepreneurs should not look for rivals, but for potential partners. As their social goals are important, partnerships could be created to pursue the social goals. As the entrepreneurs said, other social entrepreneurs are often willing to form partnerships or combine their efforts into one company, all in order to solve the social issue. If partners are found or not, an analysis of the intensity of the market and the market profitability should be conducted. This way the entrepreneur is prepared for the possible regular and social competitors.
•Social entrerprises on the market •Retaliation •Entry barriers
New entry
•Partnerships •Social contribution of suppliers •Power of suppliersSuppliers
•What are thesubstitutes •Where can I be a substitute
Substitutes
•Intensity of rivalry •Market profitability •PartnershipsRivalry
•Customer leverage•Price sensitivity •Social benefits
Buyers
Finally, the power of the buyers needs to be analysed, does the customer group has leverage and are the buyers price sensitive? The entrepreneur should consider the effects of his social goals on the buyer. As the entrepreneur needs to make sure not to overprice the products or services. But in order to gain the maximum profit, and thus put more money into solving the social issues, the entrepreneur should conduct a research under the potential buyers, and find out what the possible benefits can be from within the social group.By following the model, and searching for the sketched possibilities in combination with Porter’s five forces analyses, social entrepreneurs should be able to create an overview with a clear view of the competitive advantage they have in order to solve their social issue. This way social entrepreneurs can make a supported decision on how to capture social competitive advantage.
Conclusion
The main conclusion from the results gathered is that social entrepreneurs differ from most regular entrepreneurs in terms of views on or relations with new entries, rivalry, suppliers, buyers, and competitive advantage.
The five forces model could be used by social entrepreneurs in order to find out their competitive advantage, but competitive advantage is not the main goal of the social entrepreneurs. They want to solve a social issue, or reach a social oriented goal, and do this by finding an equilibrium between survival and eliminating their own market. Some of the entrepreneurs are even willing to sacrifice their own firm to solve mentioned issues.
As for the new entries, the social entrepreneurs are willing to share their knowledge and collaborate with new entries, as long as they do it a little bit differently, and not in their active area. This way the reach of the social entrepreneur can be extended, and the social issue can be addressed quicker, and through a broader scope. Porter only talked about retaliation in his theory and did not address the possible positive reaction for current competitors. The power of suppliers can be reduced by the social goals of the entrepreneurs. Some of the suppliers are willing to cut their profit in order to help social entrepreneurs with their cause. This is not a standard, this may occur. Suppliers, want and need to make a profit to survive. The entrepreneurs encourage testing, and explore the social tendencies of the suppliers. The results considering substitutes are no addition to the results as they are in line with Porters work, and do not create new insights. This while the results on rivalry are quite interesting. As social entrepreneurs do not see other social entrepreneurs as rivals, but as allies. They help in solving the social issue, and thus support them with eliminating the market. Social entrepreneurs should still be considerate about the non-social competitors, as a price war with a non-social enterprise may affect your ability to reach your goals. Almost all the entrepreneurs emphasized the quality they stand for, being a social entrepreneur should not be an excuse to reduce the quality of your products or services. The social aspect of the product or service does affect the buyers, but also here quality comes first. The price of a product may be higher than that of the non-social competitors, and buyers are willing to spend a little more, but the products cannot be overpriced. As buyers only prefers the social entrepreneur’s product over the products of regular businesses if the price-quality ratio is roughly the same.
The findings led to a toolset for social entrepreneurs, indicating what steps they need to make, and which analyses they need to conduct in order to create an overview of the social competitive advantage.
This all answers the research question; how does Porter’s five forces model apply to social entrepreneurs, and if needed, can the model be turned into a toolset for social entrepreneurs? Porters model is applicable for social entrepreneurs, but needed to be transformed into a toolset for the use of social entrepreneurs.
Discussion
This study created an alternative view on the commonly used works of Michael Porter. His model is still frequently used (E.g. Moreno-izquierdo, Rámon-Rodríguez & perles-Ribes, 2016; Siaw & Yu, 2004), but created for the entrepreneur with a profit based focus. As the social entrepreneur does not only focusses on financial gain, but also, and more primarily, on solving a social issue some adjustments needed to be made.
The model is based on eight interviews, which is a limited number. And the interviews are al conducted in the Netherlands. To make the model generalizable, the model should be further tested to refine it, and to turn it into a commonly and globally used tool. The additional research should focus on the added aspects, preferable first though more in-depth interviews, followed by quantitative analyses. This will enable the toolset to become a strong and supported model. The model may lead to new social enterprises and thus, may lead to solving social issues. Besides additional research into the toolset, the concept of social entrepreneurship should be analysed further. As Dacin et al. (2010, p. 50) stated, all forms of entrepreneurs initiate and address issues of change. Social entrepreneurs are leading in change now, and the academics should follow. How can social entrepreneurship be stimulated, what makes a social enterprise successful? Where is the equilibrium, for social entrepreneurs, between survival and eliminating your own market?
Further research, questioning the core of social entrepreneurship are also ways to reduces the knowledge gaps. A core assumption many social entrepreneurs make is that they are solving social issues, but do they really solve the issues, or are they creating them? Exploring the universe of entrepreneurship even more.
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