Business Clinic Project Report: Lamesley Childcare External Analysis

This report provides a comprehensive analysis of Lamesley Childcare, a service-oriented firm offering childcare services in Gateshead. The report begins with an introduction and an overview of the company, followed by a detailed audit of its external environment. This includes a SWOT analysis to identify strengths, weaknesses, opportunities, and threats; a PESTEL analysis to assess political, economic, social, technological, legal, and environmental factors; and an examination of Porter’s Five Forces to understand competitive dynamics. The report then investigates the challenges faced by childcare services, focusing on staff satisfaction and retention, and concludes with actionable recommendations for improvement. Overall, the report utilizes various business tools and techniques to assess the company's operations and provide strategic insights.

Business clinic project
report

Contents
Introduction................................................................................................................................3
Overview of company................................................................................................................3
Audit of external environment of Lamesley Childcare..............................................................3
PESTEL analysis of Lamesley Childcare..............................................................................6
Porter’s Five Forces of Lamesley Childcare..........................................................................8
Challenges faced by childcare services......................................................................................9
Staff satisfaction.....................................................................................................................9
Staff Retention.....................................................................................................................10
Recommendations....................................................................................................................10
Conclusion................................................................................................................................10
References................................................................................................................................11
Appendix..................................................................................................................................13

Introduction
The term business environment refers to the aggregate of all individuals,
organisations, and other powers that are not under the control of industry but may have an
effect on its production (Bessonova, 2017). Considering today’s business environment in
which a manager of a business firm has not only to deal with uncertainties in operational
environment of the firm but also have to take various considerations regarding competition
that exists in marketplace of the company. Therefore, various tools and techniques is used by
management department of a firm to regulate effective working of the firm in its marketplace
within given resources (Cao & Chen, 2019).
Overview of company
Lamesley Childcare is a service oriented firm that work in providing breakfast clubs
and also offers after school provisions in four local school and a centrally based holiday club
in Lamesley. Respective have its registration filed up in June 1992 by its founder Joan
Alexander. The firm’s operational work is focused towards quality of living to parents and
aims at balancing lives of various parents with pressure works and family commitments.
Presented firm is been recognised as one of the largest and most famous firm for providing
childcare services in Gateshead (Lamesley Childcare Centre, 2021).
Audit of external environment of Lamesley Childcare
SWOT analysis of Lamesley Childcare

SWOT analysis
(Source: SWOT Analysis – What is it and How to do it)
An individual who wants to start a day care company must first conduct a thorough
feasibility analysis. A SWOT review to look at Strengths, Weaknesses, Opportunities, and
Threats is one way to assess potential future success in opening and running a child care
centre. This entails assessing the venture's current strengths and limitations, as well as the
possible opportunities and risks it faces (Elfahmi & et. al., 2021). SWOT analysis of
Lamesley Childcare is presented below:
Strengths Weaknesses
 The demand for the centre’s services
should be discussed in the strength
section of a SWOT report.
 Single parents are typically working
parents who require day care, and
many couples exist in which both
partners work and provide day care
for their children. In terms of a start-
up, getting possible grants from state
or federal government agencies
willing to assist in improving access
 In light to the fact that there are
several strengths for operating a
childcare company however, an
individual should not get carried
away and make their mind to open a
childcare business. This is due to the
fact that such business have some
weaknesses, therefore, an individual
should go through these weaknesses
before starting the business.
 There are various weaknesses which

to quality child care is also a plus.
 Another advantage of this form of
company in terms of personal
satisfaction is that it allows the
owner to be innovative when
developing the theme and early
childhood programme to be used.
When to provide quality child care
that enriches the lives of your
charges, this strength goes hand in
hand with the contribution you make
to the society.
is extracted in regards with
Lamesley Childcare. Cost of a
building with a kitchen, insurance,
equipment, and a marketing budget
can all add up quickly.
 Individual in the firm also have to
obtain a licence to operate the
business and follow all local, state,
and federal laws. In addition to this,
factor in the costs of running the
company on a regular basis, such as
electricity and food.
 Finally, with painting, repairs, new
furniture, and other materials, the
centre’s maintenance can prove to be
costly and counted as one of the
biggest weaknesses of the business
firm.
Opportunities Threats
 The future benefits of starting a day
care company can be exciting. There
is always the possibility of
expansion, which may involve not
only more children but also new
structures.
 If the centre is up and running, they
will be able to work with local
companies to subsidise the costs for
workers who use it. It's also possible
for users to provide services for
children whose low-income families
are eligible for government
 Competition, particularly from
companies that provide in-house
child care, should be the target of a
day care centre’s threats. Litigation
over reported incidents of neglect or
violence is also a possibility, and can
occur even in the best-run and
staffed facilities.
 There's also the possibility of high
job turnover and difficulty recruiting
eligible employees.

assistance, which might help
individuals get paid in full.
PESTEL analysis of Lamesley Childcare
PESTLE Analysis
(Source: PESTLE - Macro Environmental Analysis)
The PESTEL analysis, developed by Harvard professor Francis Aguilar, is a method
that can be used to perform a detailed external analysis of any industry for which data is
available. This is a crucial step in developing a strategy that can successfully manoeuvre the
market in order to improve a company's chances of long-term viability and profitability
(Górecki, 2020). PESTLE analysis of Lamesley Childcare is given below;
Political: Such factors relates to political stability in the region in which firm is
operating its business activities. Operational activities of a childcare firm is largely impacted
by political affairs in a business region. Any changes in governing policy of government can
impact on business policy of the firm and even in the worst cases may lead to shut down of
such businesses.
Economical: These factors relates to economical rates such as inflation rates, interest
rates, interest on borrowings, taxes and many more. Strategic work of childcare services
business could be largely impacted by such factors as increase or decrease in inflation will
regulate investment of resources in such institutions.
Social: Such factors directly reflect on firm’s social environment. In case of chosen
childcare services institution, this is most easy factor to be achieved by this type of business
firm. As in light to the fact that all the business proceedings of the business enterprises are
aimed at providing service motive to firm’s social environment. By performing such social

obligations, managers of the firm are able to formulate a better goodwill of the firm in its
region of operations.
Technological: It includes all the technological tools and techniques which could be used for
regulating operational activities of the firm. Such factors are relates to boost up firm’s
productivity and enable firm to conduct their operational tasks with effective utilisation of
available valuable resources of the business firm. In addition to this, firm also gets
competitive advantage in the marketplace by use of such factors (Sadiq & Bala, 2018).
Legal: Such factors in the business firm relates to presence of legal obligations or
formalities in business environment of an operational firm. These factors are the most
important factor which are to taken care of chosen firm, as it includes legal proceedings and
sets standards through which all operational activities of the firm are banded. Omission or
ignoring such factors could lead to legal formalities against the operational working of the
business firm.
Environmental: These factors relates towards climatic conditions in which firm is operating
its business activities. In regards to chosen firm, core operational work of firm is not much
affected by such factors. However, due to bad weather or unsuitable conditions might affect
daily business transactions of services for the operational firm (Nurrahmat & Sunindyo,
2019).

Porter’s Five Forces of Lamesley Childcare
Porter’s Five Forces Model
(Source: MICHAEL PORTER’S 5 FORCES EXPLAINED: A MARKETER’S GUIDE)
Buyer power- High
As per today’s trend, there are huge demands of clients in regards with company’s
offerings. Due to such high demands it results in high bargaining power of customers of the
company. Customers of the firm have enough power to make changes in prices of various
commodities being offered by the firm. Ignoring such demands will lead to downfall in fame
as well s reputation of the firm in its operational environment (Han & et. al., 2017).
Seller power- High

Due to existence of less number of suppliers of the firm, this power tends to be high.
The seller with this power can make fluctuations in prices of raw materials which are to be
delivered to childcare firm. This in turn will increase cost of production and will create high
selling prices of products and services being sold by the business firm in its respective
operational market.
Threat of substitution- High
There is a huge threat to such business firm for getting its products or service
substituted from any other business offering such products or services at similar prices and
quality. As due to company’s product lacks uniqueness therefore, it can be easily copied by
any small enterprise or retailer dealing in similar marketplace (Hernes & et. al., 2017).
Rivalry among existing firms- Moderate
It is to be analysed that there are medium level of competition in such types of
business segment. As due to service motive of the firm which results to decrease in profit
making of the firm and turns profit objective of the firm to prioritise service motive of such
institutions.
Threat of new entrance- High
In regards with chosen firm there is a high threat of new entrance to the firm. As any
new entrance in similar market of operation will bring in innovative approach regarding
performing specific tasks or to deliver services in these business segments.
Challenges faced by childcare services
As with growing world where various individual are money oriented and a society in
which an individual personality is defined by one’s number of digits in bank account
(Madhavaram & et. al., 2017). There are various problems or challenges faced by childcare
services in regards to as follows
Staff satisfaction
 Low salary: Due to low salaries offered to employee of company, it leads to lack of
satisfaction of job in minds of staff and which ultimately leads to high employee
turnover rate for the company.

 Complex working environment: Due to presence of environmental factors in business
working, it causes various complexities in working environment of the business firm.
It includes working in rough climate or weather situations.
 Job nature: As the job nature is full of uncertainties, it creates doubts in minds of
customers and also leads to building up of frustration in minds of employees working
in the company.
Staff Retention
 Lack of professional conduct: Due to lack of professional approaches in operational
work of the business firm. It becomes a challenge for the operational firm to retain its
talented employees in the company.
 Low wages: Another issue because of low wages provided to staff of the organisation,
this again shows up in category of challenges that is faced by respective firm to
regulate better staff retention in the workforce.
Recommendations
On the basis of above structural analysis of given firm, there are certain
recommendation which are to be drawn out for relative firm (Munro & Belanger, 2017).
These recommendations are aimed at raising the productivity of the firm and overcome
various issues or challenges faced at the time of operating service activities.
 Innovation: Management department of the business firm is recommended to adopt
various innovative approaches to conduct several operational tasks of the business
firm. This will help firm to regulate its effective working and overcome threat of
substitution to respective firm.
 Flexible plans: As considering uncertain business environment of the firm, managers
of the firm are recommended to formulate flexible plan.
Conclusion
As by analysing the above report document it can be analysed that there are several
issues and challenges faced by manager of childcare service company. Due to existence of
various external factors in operational environment of the firm makes effective working of
the business firm even tougher. The presented report highlighted various issues faced by
chosen firm in terms of staff retention and staff satisfaction and lastly, some
recommendations are drawn out for the firm that subject to betterment of the given firm.

References
Books and Journals
Bessonova, S., (2017). External environment transformation of Ukraine's tourist enterprises
during the crisis M. Bieloborodova.
Cao, H. & Chen, Z., (2019). The driving effect of internal & external environment on green
innovation strategy-The moderating role of top management’s environmental
awareness. Nankai Business Review International.
Elfahmi, S., Ch&rarin, G. & Manan, A., (2021). The influence of external environment,
internal environment, & motivation on competitiveness through the product
innovation of Lasem Batik Tulis SMEs in Indonesia. International Journal of
Business Innovation & Research, 24(4), pp.514-534.
Górecki, J., (2020). Characteristics of the sector in terms of employment, structure, &
relations with the external environment. Outsourcing in European Emerging
Economies: Territorial Embeddedness & Global Business Services.
Han, Q., Jing, Z., Sheng, G., Shangbo, J. & Bing, L., (2017). The Relationship among
External Environment, Business Model & Performance of Banks——Based on the
Data of 16 Listed Commercial Banks in China. Management Review, 29(6), p.252.
Hernes, M., Chojnacka-Komorowska, A. & Matouk, K., (2017). September. External
environment scanning using cognitive agents. In International Conference on
Computational Collective Intelligence (pp. 342-350). Springer, Cham.
Madhavaram, S., Hunt, S.D. & Bicen, P., (2017). May. The FREE (Firm Resources &
External Environment) Framework as an Alternative to SWOT: An Abstract.
In Academy of Marketing Science Annual Conference (pp. 49-49). Springer, Cham.
Munro, M.M. & Belanger, C., (2017). Analyzing external environment factors affecting
social enterprise development. Social Enterprise Journal.
Nurrahmat, M.H. & Sunindyo, W.D., (2019). July. Determining External Factors Analysis
Summary (EFAS) Metric for Company External Factors Using Online News Titles.
In 2019 5th International Conference on Science & Technology (ICST) (Vol. 1, pp.
1-6). IEEE.
Sadiq, S.A. & Bala, A.D., (2018). External Environment & Business Survival in
Nigeria. GOUNI Journal of Management & Social Sciences, 4(1), pp.47-57.
Online
Lamesley Childcare Centre, 2021. [Online]. Available through: <Case study_redacted.pdf>
Lamesley Childcare, 2021. [Online]. Available through: < https://register-of-
charities.charitycommission.gov.uk/charity-details/?regid=1122506&subid=0>
SWOT Analysis – What is it and How to do it, 2021. [Online]. Available through:
<https://tallyfy.com/swot-analysis/>

PESTLE - Macro Environmental Analysis, 2021. [Online]. Available through:
<https://www.oxfordlearninglab.com/p/pestle-macro-environmental-analysis>
MICHAEL PORTER’S 5 FORCES EXPLAINED: A MARKETER’S GUIDE, 2021.
[Online]. Available through: <https://www.targetinternet.com/michael-porters-5-
forces-explained-a-marketers-guide/>

Appendix
Lamesley Childcare Charity overview
(Source: Lamesley Childcare)
Financial History
(Source: Lamesley Childcare)