Arcil social impact field lab, portfolio review - Arcil madeiras´ context and potential impact assessment

Abstract

ARCIL Madeiras is one of the nine for-profit URCPs (professional development and training units) aiming to involve people with reduced capabilities in the production of wooden items. Its key point of differentiation is the possibility to receive individually-tailored solutions for clients, by choosing four product categories –namely, pallets, multi-purpose boxes, wood shaving, and other types of solutions. The BU works both as a B2B and B2C model and is known for its fast delivery and excellent quality/price ratio. Despite this, ARCIL Madeiras appears to have four main pain points preventing it from realizing its full growth potential: 1) it is currently operating in a saturated market with a competitive disadvantage –as workers have limited working capacities and can only perform repetitive actions manually; 2) it has unregulated agreements with customers; 3) it relies on a limited number of clients –which implies a high exposure to losses in revenues; 4) it faces many transportation issues and geographical constraints. These, combined with the effects of Covid-19, negatively impacted its overall financial outlook, considering how the business mainly operated at a loss in the last years. Nonetheless, to understand whether there was any hidden potential, the team decided to perform a market analysis, through which it was able to identify key trends and forecasts in the pallets market for the upcoming five years, as well as assess competitions from both national and geographically close companies, especially in the B2B segment. Moreover, to have a comprehensive view of the competitive landscape, the team also performed a SWOT –TOWS analysis, and consequently decided to focus on the S-O and T-S strategies as a starting point to formulate feasible recommendations. Once the market had been deeply assessed, it was important to understand the targeted customer segment and overall satisfaction. It emerged that business unit mainly targeted industries located near Lousã, in need of transportation & logistical solutions for the B2B channel, and that customers were highly satisfied with the product offering, the price/quality ratio, geographical proximity, and social purpose of the organization.Finally, to quantify the effects of the proposed strategies, the team estimated the number of new potential clients based both on past information and market forecasts. Overall, it resulted that, regarding the B2C segment, the strategy that will generate the greatest impact is the one suggesting attendance to fairs and the formation of partnerships with physical stores, whereas, regarding the B2B segment, the strategy with the greatest potential impact is the one recommending, once again, participation in B2B Fairs.