DESTEP analysis provides the relevant data about the external factors impacting a particular sector. For this reason, its consideration is critical for FysioSupplies.
Description and overview of demographical factors
Demographic factors are related to the peculiarities of the targeted audience in the selected country. It includes their attitudes, lifestyle peculiarities, number of people in the sector.
First, demographics show that the number of employees in the Spanish pharmaceutical industry is significantly higher than in the Netherlands, which can be taken as a beneficial factor for operating in this market.
Moreover, the number of professional athletes in Spain, who comprise the target population for the company, increased to 4962 in 2018, which is essential for future success. It means that the demographical factor is favorable for entering the local market and the generation of revenue.
In Spain, a healthy lifestyle is one of the current trends, which means that the company’s proposal might be interesting for these groups of people. For FysioSupplies, it creates the opportunity for successful entry.
In such a way, the following demographic factors should be considered:
- A high number of employees in the sector
- An increasing number of professional athletes
- Existence of healthy lifestyle trends and groups
In such a way, the issues mentioned above show that FysioSupplies can expect a high level of interest in its products from certain population groups in Spain. It should be considered as one of the advantages of the selected region and used when planning a new entry.
Description and overview of economic factors
The economic conditions of the selected region should be considered significant factors affecting a company that wants to operate in the given area. That is why FysioSupplies must evaluate the Spanish market correctly.
First, the analysis of the economic factor also shows the existence of the appropriate environment. The Netherlands remains one of the leaders of the European region as it is described as the most competitive one. However, in Spain, the pharmaceutical market also grows and is estimated to reach $25,1 billion by 2021, while the public expenditure on healthcare is 6,5% of the GDP. These numbers prove the promising character of the selected area and should be considered by FysioSupplies as the guarantee of successful entry.
Second, Spain remains the fourth-largest economy in the Eurozone, which means that its population has a middle or even high level of income. It creates conditions beneficial for the entry of companies who work in the sphere of technologies or innovations. Moreover, there is a powerful foreign investment that promotes the recovery of the economy and its stable development.
Altogether, the main economic factors are:
- Growth of the pharmaceutical market
- The power of the Spanish economy
- Presence of foreign investment
- The appropriate level of income
In such a way, the current economic factors that affect the Spanish market are beneficial. FysioSupplies can hope for a successful entry and stable income.
Description and overview of social factors
Social factors include the existing cultural peculiarities, trends, moods, and buying behaviors of population groups that are interesting for the company. Their consideration is vital for the creation of an effective strategy.
Analyzing the social factor, the overall situation remains positive. The functioning of the Spanish Society of Pharmaceutics and Pharmaceutical Technology is focused on the promotion of innovation and the generation of knowledge in relevant fields. It supports the work of companies such as FysioSupplies and creates an environment beneficial for their evolution. It means that the given element is similar to those in the Netherlands and the organization will not have to spend much time to adapt to the new social climate, which is a crucial element of new market entry.
Second, the buyers belonging to the target audience possess a high buying capacity. It means that they can afford products and services offered by the company and contribute to its further stable development. Moreover, they are interested in this sort of offerings as it meets their requirements of a healthy lifestyle. The trend for the improvement of the quality of life, as one of the important social characteristics, cultivates the beneficial atmosphere for the entrance of companies such as FysioSupplies.
The relevant social factors are:
- Spanish Society of Pharmaceutics and Pharmaceutical Technology promoting innovations
- High buying capacity of the target population group
- High level of interest because of the current trends
- The emphasis on a healthy lifestyle
All these aspects guarantee the success of FysioSupplies as it can benefit from the appropriate moods among the population and their interest in products and services offered by the company.
Description and overview of technological factors
For companies such as FysioSupplies, the level of technological development is crucial as it offers innovative products and services. That is why this aspect is critical for successful entry.
Thus, the Netherlands is one of the most innovative countries in the EU, which promotes the better work of FysioSupplies. However, Spain also belongs to states investing significant funds in pharmaceutical innovations and accepting its role in driving the broader use of technologies. In 2018, Spain had about 29,000 employees working in the medical technology industry. It means that there is much space for innovative solutions, and the company can hold an advantageous position in the market due to the advances in the sphere of technology.
Another important factor is significant foreign investment in the sphere of technologies. It improves the overall situation in the state and lays the ground for the introduction of innovative solutions and cooperation with other partners. Moreover, the population is interested in the use of new devices and services that are associated with this sphere. This trend contributes to the popularization of this market segment and its growth.
In such a way, the current technical aspects of the market are:
- Governmental investment in the sphere of technologies and innovations
- Foreign investment
- Interest from the population to innovative solutions and services
The relevant technological factors are favorable for the new market entry as FysioSupplies can enjoy the existence of the developed base and interest from the population to technologies.
Description and overview of environmental factors
The sustainable development of companies is one of the basic features of the modern business world. That is why it is critical to consider environmental factors that might impact the operating conditions of the company.
First, both Spain and the Netherlands are concerned with the current environmental issues. The states create and implement policies aimed at the reduction of the negative impact of pharmaceutical manufacturing on communities and nature by using friendly solutions and technologies. That is why the work of FysioSupplies should be aligned with the existing regulations, and the company has experience in this field because of its work in the Dutch legal field with similar policies.
Second, the climate of Spain differs from the Dutch one; however, it remains beneficial for the company as people are engaged in physical activity every year. Moreover, requirements for waste management and recycling are similar to those accepted in Eurozone, which eliminates a barrier for successful entry.
Altogether, the environmental factors are:
- Reduction of the negative impact of pharmaceutical manufacturing on communities
- Favorable climate
- Waste management and recycling regulations
It means that FysioSupplies has to be ready to adapt to the new environment with specific demands for sustainability. It might demand extra costs, but expected benefits can compensate them.
Description and overview of political factors
The existing regulations are critical for any company as it has to function in terms of the current legal field. For FysioSupplies, it means that adaption to all laws related to the sector.
However, in the sphere of politics, the situation can be characterized as attractive. The corporate tax rate in Spain had the lowest showings from 2016 to 2018. Today, the government offers tax incentives and provides credits for companies that devote funds to research and development (R&D) incentives to improve existing products and materials. It becomes a facilitator of the sphere’s development and can have a positive impact on FysioSupplies.
Moreover, the Spanish laws that regulate the selected market segment are favorable for the functioning of foreign companies as the government is interested in the attraction of new investment to strengthen its economy.
The relevant political factors are:
- The low corporate tax rate
- Tax incentives
- Favorable laws
For FysioSupplies, it presumes that the company can enjoy a positive legal environment and plan its operations regarding the existing legal field.
Conclusion
Altogether, the comparison of these external factors evidences the existence of an opportunity for new market entry. FysioSupplies can benefit from the current issues and hope for stable revenues because of the peculiarities of the local demographics, environment, legislation, society, and legislation. The data from DESTEP analysis can be used to plan a strategy and actions for the growth of the firm.