These regulations impact the economy, consumer buying habits, and international trade laws. It includes abiding by taxation laws, labor laws, and more. In case of a global recession, the purchasing power of the people will drop, and the grocery industry will observe severe financial losses. High unemployment signals the availability of surplus labor at comparatively lower wages. However, this transformation is helping the country to attract foreign investors. A retail store needs to meet legislative conditions before opening the shop. These conditions are often standard. Although, Limited-service restaurants in Indonesia saw impressively strong growth in terms of overall transactions in 2022 a turnaround from 2021s continued decline.. Majority of the people live in rural areas and rely significantly on agriculture for their livelihood. Political factors: Anti-trust issues. Academic writing has no room for errors and mistakes. But it needs a lot of investment and tech acceleration. Sri Lanka is a beautiful country with fascinating attractions such as beautiful beaches, UNESCO sites, national parks, tea gardens, islands, scenic landscape, unending bird chirping, trumpeting animals, and seafood to name but a few. Lets discuss what external factors impact the grocery industry. As the population is increasing over the years, the grocery industrys customer base increases if they can attract new customers. International business. Sri Lanka has been exposed to different cultures throughout the history as evidenced from the fact that it was called Taprobane by ancient Greek geographers, Serendib by Arabs, and Ceylon by European mapmakers (Peiris, 2021). Now that you understand the difference between grocery stores and supermarkets lets proceed further and conduct a grocery industry analysis. Frequent changes in government policies harm business performance by increasing environmental uncertainty. Companies set targeted ads to customers most likely to visit their stores and buy from them. Via helps you navigate a fast-changing digital marketplace. Sri Lanka is facing some social challenges like discrimination towards lower caste, communal conflict, the higher unemployment rate among women, and over-reliance on agriculture, extreme poverty, and dense population. If you need help with something similar, Within PESTEL analysis, political factors exert a strong influence on the long-term sustainability and profitability of Cargill A. The retail industry is everywhere. The adoption of new technologies has shortened the lifecycle of new product development. This investment will also increase stakeholder satisfaction and expand the customer base due to enhanced brand image. Legal is the sixth factor of PESTEL analysis. Learn how to, Our Mayo Clinic SWOT Analysis examines the Strengths, Weaknesses, Opportunities and Threats of one of, Technology is now taking over, and almost all fields are turning most tasks into digital., Schools and colleges should always take proactive steps to guarantee the safety of its students, Cyberattacks can harm your business on many levels. At Market Research Reports, Inc. we aim to make it easier for decision makers to find relevant information and locate right market research reports which can save their time and assist in what they do best, i.e. To gain more market share with identical products, grocery stores spend money to make their store look more attractive so that more customers get attracted to their stores. This can happen when unemployment rates spike. - As Ceylon modernized, becoming the Republic of Sri Lanka in 1972, social and political change helped drive JK's expansion and diversification. PESTEL. After we cleared the difference between the two, we conducted the grocery industry analysis. as they determine the overall economic environment of the country. Life expectancy is very good as evidenced from the fact that it is 72 years for men, and 78 years for women (BBC, 2019). academic writing services at least once in their lifetime! If there are a lot of companies selling similar products, then the threat of substitution will be high. Our model papers and solutions are purely meant for Email Delivery - PDF (on default), Hard Copy Mail Delivery (+US$ 190.00) Download PDF Leaflet. Aug-22-2018. Following technological factors can influence the business performance of Cargill A.: The development of information and communication technologies has led towards the adoption of innovative marketing techniques to enhance collaboration with customers. It doesnt distinguish between local and foreign workers. Its always there, even when buyers dont have the funds to buy their products. Surely, it needs to work on political stability, and reforms. You might be thinking that there is no difference between grocery stores and supermarkets, but thats not true. (Ed.). Strategy planning process often requires five steps -. Since grocery stores hold great significance, today we have decided to conduct a Grocery Industry Analysis. Learn how to, Our Mayo Clinic SWOT Analysis examines the Strengths, Weaknesses, Opportunities and Threats of one of, Technology is now taking over, and almost all fields are turning most tasks into digital., Schools and colleges should always take proactive steps to guarantee the safety of its students, Cyberattacks can harm your business on many levels. Cargill A. must consider these factors to ensure compliance with consumer protection laws. Changes in weather and climatic conditions can influence business efficiency. The country needs a lot of reforms like equal treatment of minorities, human rights, communal harmony, and a stable political environment in order to compete with the world. This depends upon the ease through which new firms can join the industry. November 2022. Cargill A. can take it as an opportunity and adopt green business practices to win the trust of stakeholders. Its not only physical retail stores under scrutiny. Although the eat-in format in limited-service restaurants dominated value sales pre-pandemic, it was already losing ground to takeaway and home-delivery options, Standalone remained the dominant format of consumer foodservice outlets in Mexico in 2022, due the proximity of these operators to residential areas. - Political stability and policy continuity is essential for economic and business growth. High GDP also signals the consumers ability to spend more on offered products. They use market research to identify buying trends and shifts in consumer behavior. The supplier power in the grocery industry is very low. Its basically a digital catalogue for their products. British colonists arrived and colonized the island from 1815-1948. Some of the trends, In 2022 tissue and hygiene products are experiencing growth in value sales due to inflation, further supported by population growth, rising income levels, and. Legal factors become trickier once the company expands overseas or offers products online. Every industry has a different buyer power. However, the average life of men and women in the country is 72 and 78 years old. Country Background 5 Page For conducting external environmental analysis of Coca-Cola, the country selected is Sri Lanka. Sri Lanka PESTEL Analysis - Comprehensive Country Outlook. Unemployment is particularly high for women and youth. Thats when pre-existing grocery stores started to force the new and not financially strong stores to leave the market so that they could enjoy greater market share. Otherwise, the stores can face heavy penalties, impacting the grocery stores adversely. The products are either shipped to the customers home or the closest store for pickup. The retail industry has greatly benefited because of the internet. (2014). Which countries are moving up the value added chain away from primary sectors? Hence all the suppliers have identical products. It is important for Cargill A. to understand economic factors such as foreign exchange/interest rate, labor market conditions, inflation and saving rates etc. Sri Lanka has a mixed legal and judiciary system. Our site uses cookies to improve functionality. Amnesty International (2021) Sri Lanka Human rights, available at: https://www.amnestyusa.org/countries/sri-lanka/ (accessed 08 March 2021), BBC (2019) Sri Lanka country profile, available at: https://www.bbc.co.uk/news/world-south-asia-11999611 (accessed 01 March 2021), Condiliffe, J. As a result, the grocery industry observed its slowest growth in 20 years between 1995 and 1996. For instance, extreme weather conditions can increase the cost of operations and compel the Cargill A. to make the value chain more flexible. All retail stores need to meet the environmental requirements for consumer and employee safety. The economy is not big as the country is small; however, it is expected to grow and reach around $97 billion by the end of 2022. Chat with us The startup stage refers to the early days of an industry when there are hardly any companies. The startup stage is the very first stage of the industry life cycle. People save their money for products of necessity. Other minority religions are Hinduism (12.6%), Islam (9.7%), and Christianity (7.4%). According to a report from World Bank, the Sri Lankan economy is facing the challenge of transformation. Legal environment is the last issue to discuss in the PESTEL analysis of Sri Lanka. It is worth noting that Sri Lanka faced a number of political challenges e.g. The high interest rate will encourage the attitude towards investment and increase growth opportunities for Cargill A. The advent of social media and e-commerce has encouraged online shopping behavior among customers. Sri Lanka is a South Asian country that has a rich cultural heritage. Ansoff Matrix in McDonalds (McDonalds Growth Strategy), https://www.amnestyusa.org/countries/sri-lanka/, https://www.bbc.co.uk/news/world-south-asia-11999611, https://www.britannica.com/place/Sri-Lanka, https://www.worldbank.org/en/country/srilanka/overview. These products arent bought by retailers on a whim. Major political instability and distressed government finances have blighted Sri Lanka, which is 'mostly unfree' for economic freedom. But if the countrys political parties are fickle, it can easily turn into a problem. Grnig, R., & Morschett, D. (2017). Similarly, it is important to understand the industry lifecycle stage. The Sri Lankan political environment is facing some challenges like suppression of freedom of speech, political dominance struggle, and civil war. Financial Times Prentice Hall. The corruption can influence various business operations, ranging from licensing, contracting, fraudulent deals to frequent lawsuits. With the help of technology, retail is one of those industries that can survive post-economic destruction. If you have BIG dreams to score BIG, think out Strength. Sri Lanka has realized the significance of science and technology. Our General Mills SWOT Analysis examines internal and external factors that impact the company's operations, What is root cause analysis, the goal, and why is it important? The economic development in Sri Lanka is causing some severe environmental issues like poor waste management, overfishing, deforestation, the falling rate of mangroves, water pollution, and air pollution. High taxation affects international trade and prevents exports. Amazon and Walmart are going head-to-head. When labor markets are flexible, Cargill A. can take advantage of higher labor productivity. The GDP growth rate will determine the Cargill A.s ability to pursue its long-term growth strategies. A strategic framework for technology evaluation. Close collaboration with such groups may enhance the Cargill A.s ability to collaborate with community and achieve long-term corporate goals. Antitrust issues and data breaches are causing the government to look into how data is stored, used, and shared. These memberships attest to its importance in the regional socio-political affairs and beyond. Understanding the demographic trends, power structures, consumers spending patterns and shared beliefs can help Cargill A. design effective marketing messages and fulfil corporate objectives through informed PESTEL analysis. Scope of Sri Lanka - PESTEL Analysis Report. Focused R&D and innovation at Blue Star driving growth: Blue Star Limited strengthens its R&D ecosystem, enabling it to release new, innovative goods and services to meet various client needs, giving Blue Star a significant advantage. Technological trends can be used to start the creative social media campaigns for developing online brand communities. Its non-negotiable. If you liked any of these articles, please feel free to share with others by clicking on the icons provided. International Journal of Applied Engineering and Management Letters (IJAEML), 1(2), 78-97. Similarly, anti-discrimination laws (like equal employment opportunity) also need to be carefully studied when developing human resource practices as discriminatory suits against employer harm the organizational image and affect organizations ability to attract and retain the talent. However, grocery stores are smaller and contain specialized items mainly relevant to food and beverages, while supermarkets are huge and have different departments. In this PESTLE analysis, we'll look at the Political, Economic, Sociocultural, Technological, Legal, and Environmental factors affecting the food industry; in particular, we'll look at how both restaurateurs and food distributors might be affected by current trends. He holds an MSc in Tourism & Hospitality from the University of Sunderland. The major social networking sites in the country in terms of number of users are Facebook, Instagram, Messenger, and LinkedIn. If they dont, not only will the food by pulled from the shelves, but it could also lead to legal troubles for the company. Excessive resource depletion by Cargill A. can draw the negative response from media, environment protection groups, customers and the general public. Culture is considered an important variable by international marketing managers. The international presence of Cargill A. require the organization to consider these differences to avoid undesired circumstances carefully. In the year 2015, Sri Lanka has exported approximately 467 Million U.S dollars' worth of Cinnamon. Cargill A. needs to understand the online shopping behavior by considering the generational differences as younger consumers are more inclined to shop online than older customers. It is important for Cargill A. to understand the peoples general attitude towards migration as it can influence firms ability to bring international managers to host country. The sales of grocery stores depend upon inflation directly. Like a point of sales system. The first task we had was to do a PESTEL analysis of our home-country that we were in charge of. Similarly, market segmentation based on social class may be ineffective where social class stratification is low. IEEE. These steps can help you get back, Copyright 2020 Weberience LLC. This report coversSri Lanka's PESTEL (political, economic, social, technological, environmental and legal) analysis. Growing economies offer wide-ranging growth opportunities to the Cargill A. However, now people prefer groceries from supermarkets. The consumers spending patterns are influenced by their purchasing power of money. 2. This is because grocery stores mainly buy food and beverage products from wholesalers. This is costly for the companies. Therefore, grocery stores and supermarkets may sound like synonyms. However, buyer power represents the power of buyers to dictate the prices in the market. The packaging is usually made up of plastic, and plastic causes environmental degradation. Buyer power is similar to supplier power. Its important to understand the laws long before the store is open for business. The only thing left for the company to do about these changes is abide by them. Organizational culture derives strong influence from the societal norms, values and trends. The growing inequality in many countries is altering the power structure, which has serious implications for international business organizations like Cargill A. Cargill A. need to study the traditionally assigned gender roles to align its marketing and communication practices accordingly. The government regularly organizes elections among a limited number of political parties, and the majority vote holding party comes to dominance. According to an estimate, the annual nominal GDP of Sri Lanka in 2020 was81.120billion dollars, and its66thworlds highest. Proposal, Assignment Writing It requires Cargill A. to prioritize and focus on marketing the eco-friendly nature of their products over customary value propositions. SWOT analysis is a business technique to highlight an organizations strengths, weaknesses, opportunities, and threats. Likewise, some shops in other countries have to pay a tax for offering fatty foods. Bureaucracy and corruption negatively influence the business environment. Ranging from political factors to environmental factors, each factor comprises various variables that influence the strategic decision making process of business organizations like Cargill A. Aithal, P. S. (2017). If you purchase a report that isupdated in the next 60 days, we will send you thenew edition and data extraction Free! Stores other than CostCo now mass stock various products to avoid running out quickly. In the first stage, we constructed the grocery industry life cycle. Today, well discuss the pestle analysis of Sri Lanka. Cargill A. needs to consider the investments made by competitors on a micro and macro level to understand how new technologies influence the firms value chain and prevailing cost structure. Its fast and easy to use. The threat of substitution is really high in the grocery industry. Because we just dont know. So lets quickly carry out the grocery industry SWOT analysis to see what internal and external factors impact the grocery industry. Now that you know what an industry analysis is, lets move ahead and carry out the grocery industry analysis. Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. But just like every other industry, the retail sector is affected by the six principles of PESTLE/PESTLE analysis. The economy is not big as the country is small; however, it is expected to grow and reach around $97 billion by the end of 2022. Similarly, high trade restrictions can make the business environment more complex by affecting the exports and harming relationships with foreign trade partners. Other than that, hes a fun loving person. 1. ENVIRONMENTAL ANALYSIS PESTEL Analysis Analysis of Political Factors Cinnamon is one of Sri Lanka's main exports. 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Cost of operations and compel the Cargill A.s ability to spend more on offered products, out! 60 days, we will send you thenew edition and data extraction free is abide by them can!