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Porter’s Five Forces Report for Thomas Pocklington Trust

Thomas Pocklington Trust was registered on March 14, 2018 as a charity to create awareness on the needs and ambitions of visually challenged members of society. The Trust’s corporate strategy is hereby determined from its financial records through Porter’s five forces analysis.

Porter’s Five Forces Analysis

1. Threat of New Entrants

1.1 Favorable Registration Requirements

Under UK law, a new Trust or Estates is not obligated to register unless it is “UK taxable”. UK “taxability” criteria only bar a new entrants if any of its trustees’ is not UK tax compliant. Additionally, registration is demanded if the new entrant is incorporated in another country but has assets in the UK. As stated, these conditions are not sufficiently pesky to ward off new entrants.

1.2 Brexit Related Risks

Unknown effects of Britain’s exit from the European Union on the trusts activities, suppliers and the overall economy bode ill in the foreseeable future. As finer details of the exit are yet unknown, uncertainty on possible ripples on the trusts unit trusts, stocks, and assets may play into the hands of prospective entrants who may take advantage of Thomas Pocklington’s weakened position.

1.3 Strong Financial Position

Robust financial base of the Trust remains its greatest forte against new entrants. The Trust has a steadily growing permanent endowment fund, and is a regular recipient of rent from its UK properties, dividends and interests and on listed investments which amount to £5,334,000. The strong fiscal position makes the Trust less susceptible to the threat of new entrants.

2. Bargaining Power of Suppliers

2.1 Many suppliers of information technology services

There are many suppliers of IT support, leading to an improved relationship with mainstream tech companies. This was particularly headlined by recognition by Microsoft and subsequent invitation to the 2019 EU Accessibility Summit.

2.2 Many Local and National Partners

Thomas Pocklington Trust works with a large number of local and national partners in the United Kingdom to deliver quality outcomes for the community. These include the England Vision Strategy (EVS), Visionary, Metro Blind Sports, East London Vision (ELVIS), South East London Vision (SELVIS), and the national network of Sight Loss Councils. The wide pool of partners to choose from is a great asset to the trust.

2.3 Grant Funding

Increased reliance on grant funding to take care of various needs ranging from research and 31 other functions under the “meeting needs” budget line is a source of concern. The company has to compete with more than 150,000 other Trusts and Estates for limited grant funds putting its long term goals at risk. The grant providers on the other hand will have greater bargaining power, as their withdrawal could bring important functions to a halt. These functions include, research, “meeting needs” programs in partner organizations, namely, Visualise training,  VI talk, Vision Impaired, Croydon Vision and 27 others. The impact of Grant funding plug off could be more troublesome as grand funded expenditure has increased from £1,822,000 in 2018 to £2,068,000 in 2019.

3. Bargaining Power of Buyers

United Kingdom boasts a large number of eye care charities which immensely empowers targeted recipients of the services. For instance the Action for Blind People (UK) provides sight loss advice, reading services for the blind and partially blind, and online shopping options for optically challenged members. Similarly there is the Eye Health Alliance, which campaigns to raise awareness on the importance of eye health for all. It also helps to provides information on the importance of regular eye checkup, as well as interventions to reduce elevated levels of avoidable sight loss in the UK. Correspondingly, the childhood eye cancer Trust exists to eradicate retinoblastoma in children. Also, UK beneficiaries have the International center for Eye Health Trust, Sight savers international (UK), VisionAid Overseas (UK), and Vision for a Nation (UK) among others to choose from.

4. Threat of Substitutes

The Trust has numerous partners who could double down by offering similar services such as awareness creation on eye care, advocacy, as well as support. Whereas several of these entities are smaller from the portfolio perspective, they could substitute some of its functions.

In addition several eye care foundations and Trusts with international reach such as Hellen Keller Foundation, VisionAid Overseas (UK), and Sight Savers international (UK) could potentially hurt the Trust’s future plans.

5. Rivalry among existing competitors

5.1 Eye Care Trust -National Eye Health Week Merger

 As expected, the merger of the two entities which was consummated in 2016 to form Eye Health UK elevated the industry’s concentration ratio. The effect of this is a strengthened amalgam with real potential to erode the Trust’s competitive edge.

5.2 Strong “Barrier to Exit” position

Scrutiny of the Trust’s March 2019 accounts show a strong “barrier to exit” position. Two factors responsible for this can be gleaned from the financial accounts. First, the Trust has substantial assets against which it has secured its loans. Second, the Trust continues to incur high fixed costs, which when considered in light of its large asset base means that it will remain in business in the foreseeable future. Again, the accounting mechanism adopted is the “going concern” approach. The foregoing indicators, in addition to recent creation of Eye Health UK Trust only points to a spiraling business rivalry.