Approximately more than 21 million people are populating Sri Lanka. We are here to help. Leyva, M., Hechavarria, J., Batista, N., Alarcon, J. In 2008 International Conference on Information Management, Innovation Management and Industrial Engineering (Vol. For example, a supermarket will have a pharmacy, a toy area, a clothing area, etc. Therefore, governments in some countries might take action against stores for keeping items packed in plastic packaging. Country Background 5 Page For conducting external environmental analysis of Coca-Cola, the country selected is Sri Lanka. In the grocery industry, buyers have great power. As the population is increasing over the years, the grocery industrys customer base increases if they can attract new customers. However, buyer power represents the power of buyers to dictate the prices in the market. Cargill A. should develop local teams and develop local partnerships for understanding the societal attitudes and norms to tailor marketing strategies according to unique cultural context. Buddhism is the majority religion, and roundabout70.2%of the people believe in Buddhism. Surely, it needs to work on political stability, and reforms. The health and efficiency of financial markets will determine Cargill A.s ability to raise the capital at fair prices. 1189 Words; 5 Pages; Jun 15th, 2018 Published . Amazon and Walmart are going head-to-head. Hence their products are identical. Likewise, some shops in other countries have to pay a tax for offering fatty foods. to get Coupon Code. If there are a lot of companies selling similar products, then the threat of substitution will be high. ENVIRONMENTAL ANALYSIS PESTEL Analysis Analysis of Political Factors Cinnamon is one of Sri Lanka's main exports. Each society has distinctive norms and values that play an important role in shaping consumer behavior. Grocery stores are one of the sub-sectors of the retail industry, along with six other sub-sectors. and cannot be used for research or reference purposes. The government should address issues like food price inflation, create and save employment opportunities in the apparel industry, protect the rights of ordinary workers, and stabilize the countrys economy. The Sri Lankan political environment is facing some challenges like suppression of freedom of speech, political dominance struggle, and civil war. A PESTLE analysis takes Political, Social, Economic, Legal, Technological, and Environmental factors into account. BAC Reports. It is important for Cargill A. to understand economic factors such as foreign exchange/interest rate, labor market conditions, inflation and saving rates etc. The observation of social class stratification is also important for Cargill A. Back then, the concept of a grocery store was very new, and few grocery stores existed. Cargill A. operates in a complex and dynamic environment characterized by regulatory changes, growing environmental activism . Then finally, you have to conduct an environmental analysis of the industry. In the year 2015, Sri Lanka has exported approximately 467 Million U.S dollars' worth of Cinnamon. I cant even imagine how difficult my life would be. 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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. Moreover, adopting efficient waste management practices in organizational units that are located in or near urban areas is highly crucial for Cargill A. If not, select "Manage Preferences" to learn more about managing your cookie preferences. 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. This article is only an example Moreover, people are also unaware of the industry at this time, so companies try hard to attract customers. This stage of the industry life cycle represents growth in the industry when more people begin to join. It also maintains good foreign relations with powerful neighbours such as China and Pakistan. Financial Times Prentice Hall. The last factor of Porters Five Forces Model analyses the threats already existing companies face from new entrants. Check your email Heres what you need to know. Therefore, they wont let newcomers come and snatch their market share. Proposal, Assignment Writing 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. PEST Analysis: Sri Lanka. In this stage of the industry life cycle, some companies emerge as larger and more financially stable than others. Where would I buy groceries from? Political - turmoil, Economy - shambles, Social - upheaval, Technology - fallout as no power, Environment - distraction due to poor policy implementation, Legal - politicised hence no consistency. The maturity stage leads to the decline stage. The power distance within any society shows the acceptance of hierarchy and income inequality. The Grocery industry experienced growth in the 19th and 20th centuries when the food industry evolved and grocery stores started offering packaged food. 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. If you need help with something similar, Cargill A. should carefully consider the on-going technological innovations to stay ahead of the competition. 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. What are the country's risks and vulnerabilities? - If the company block logistics economic crisis then . Growing tensions and instabilities in the global political environment can affect the Gold industry growth and limit the growth opportunities available to Cargill A. Cargill A. must adjust its business management practices while entering in markets with high or low power distance. Our consulting team answers your commercial questions with data and insights generated by our research experts, industry knowledge and 1,200 on-the-ground analysts in 100 developed, emerging and frontier markets. Bureaucracy and corruption negatively influence the business environment. It also means having to abide by more economic and political factors. Legal is the sixth factor of PESTEL analysis. Each company offers retail products online, to be sold and shipped. It pressurizes the Cargill A. to develop new products quickly, increase product range diversity, integrate flexibility into the value chain and develop healthy business relationships with value chain partners. There are almost 40,000 stores in the US that sell groceries. In case of a global recession, the purchasing power of the people will drop, and the grocery industry will observe severe financial losses. Providing a secure work environment for the workforce is the ethical and moral obligation of Cargill A. However, the country has also developed very relations with regional countries likeChinaandPakistan. The business practices of the Cargill A. are influenced by the prevailing economic structure. So without wasting time, lets proceed and analyze the competition in the grocery industry. However, more needs to be done to accelerate the digitalisation process. 1. Finally, the exchange rate fluctuation can also influence the profitability and international trade. Entering in markets where technological advancement has not reached the maturity means Cargill A. can increase the market share by focusing on emerging technological innovations. 1,143 Trillion . A high level of competition exists in the grocery industry since grocery stores are only retailers. Approximately more than21million people are populating Sri Lanka. Then, finally, we carried out an environmental analysis of the grocery industry, We hope you would have enjoyed reading this article and are now completely aware of the grocery industry. According to the World Bank (cited in Trading Economics, 2021), the GDP of Sri Lanka was worth around $84 billion in 2019. Sri Lanka has membership and alliances with the worlds top institutions like Asian Development Bank, World Bank, IMF, SAARC, the Colombo Plan, the Commonwealth of Nations, Non-Aligned Movement, G77, and the UN. High taxation affects international trade and prevents exports. The grocery industry requires political stability to make a profit. More retail shops are offering food products. Choosing the vision, mission and the reason of existence for Sri Lanka. Retailers who offer products online can collect data provided by their customers. A PESTLE analysis is used in business to assess the industry which an organisation is in. This investment will also increase stakeholder satisfaction and expand the customer base due to enhanced brand image. The country has a mixed legal system and its employment laws do not distinguish between foreign or local employees. For instance, people enjoy buying products in bulk. Here's what you need to know. Political stability will . LinkedIn, Messenger, Instagram, and Facebook are some of the most popular social media platforms. Not following these laws exactly as outlined will lead to legal troubles like bankruptcy and foreclosure. Each country must abide by their political regulations. (2012). As more people join, the competition in the industry increases. Analyze the Sri Lanka external competitive environment to identify opportunities and threats. Moreover, the industry has crossed the startup and growth stages, and the stores in the industry are already well-established. Copyright 2017 2025. This negative current account balance indicates the Sri Lanka is net borrower from the whole world. Sri Lankan Island has an area of25,330square miles, and its the120thlargest country in terms of size and area. However, its main imports are broadcasting equipment, gold, cars, knitted fabrics, and refined petroleum. (Ed.). They use market research to identify buying trends and shifts in consumer behavior. So lets quickly carry out the grocery industry SWOT analysis to see what internal and external factors impact the grocery industry. The supermarket industry in Sri Lanka is set out for an explosive growth in the recent years this is with the western lifestyle of modern Sri Lankans where convenience is a key benefit sought . International Journal of Applied Engineering and Management Letters (IJAEML), 1(2), 78-97. The grocery industry experienced the startup stage between the 11th and 14th centuries. So I did it on Sri Lanka. A retail store needs to meet legislative conditions before opening the shop. Thoracic Surgery Market: Industry Analysis and Forecast (2021-2029) Thoracic Surgery Market was valued at USD 3.1 Billion in 2021, and it is expected to reach USD 5.40 Billion by 2029, exhibiting a CAGR of 7.18 % during the forecast period (2022-2029). Accordingly, we never encourage or endorse its direct Cargill A. should consider the following legal factors when exploring a new market. Cargill A. can leverage the opportunities offered by social media marketing to improve business performance. The consumers spending patterns are influenced by their purchasing power of money. Demography. In some cases, this can be beneficial. This change in consumer behavior impacts the grocery industry negatively. But even smaller shops can benefit from offering discounts and sales on products. - Political stability and policy continuity is essential for economic and business growth. Certainly, rapid human development is having its toll on the environment. Antitrust issues and data breaches are causing the government to look into how data is stored, used, and shared. Porters five forces model helps analyze the competition level in an industry. The grocery industry currently seems to be in a decline stage since now the demand for the grocery industry has fallen as people have different alternatives such as e-stores and supermarkets. ~ 0.0 Page). Other small name companies cant compete on the same scale. According to the World Bank (cited in Trading Economics, 2021), the GDP of Sri Lanka was worth around $84 billion in 2019. However, now people prefer groceries from supermarkets. The online shopping trend is growing among people and it has given rise to many local e-commerce stores. As well as cash registers to manage money after a sale. This detailed PESTEL analysis of Sri Lanka aims to explore some of the powerful macro factors that impact on Sri Lanka today and may continue doing so in the future. The current population of Sri Lanka is just over 21 million (Worldometer, 2021). The number of international tourists who have arrived to Sri Lanka during the year 2019 is 1.9 Mn and the foreign exchange earned through tourism is approximately Rs 646 Mn according to the Annual Report released by Sri Lanka Tourism Development Authority. The competition in this market is increasing and the small and local players are facing difficulties in survival. (2009). But just like every other industry, the retail sector is affected by the six principles of PESTLE/PESTLE analysis. Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. These steps can help you get back, Copyright 2020 Weberience LLC. Cargill A. must study and predict the labor market conditions to understand how it can attract talented workers and leverage their skills to improve business performance. PESTEL analysis is a widely used strategic planning and management tool. Blackridge Research's Sri Lanka Solar Power Market Outlook report consolidate the developments and build a perspective on growth from the point of view of the solar sector, in its current and future role. Andr Cavalcante, S. (2013). The global expansion strategies of the Cargill A. are influenced by the financial market efficiency as operating in highly efficient financial markets leads towards improved liquidity position and strengthened ability to enter new markets. When its on the decline, the opposite is true. Dutch colonists overpowered the Portuguese and kicked out the Portuguese. Okay, I might be being a little dramatic because I can still get my groceries from the supermarket, but its not the same. please submit your details here. Its important to understand the laws long before the store is open for business. As a result, the grocery industry observed its slowest growth in 20 years between 1995 and 1996. Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. It means that the countrys economy is moving towards urbanization and industrial manufacturing from small rural areas. This report series allows you to understand the macro-economic environment as a basis for strategic planning. However, when there is political chaos, it deters the investors and harms the stakeholders' trust in economic and consequent organizational performance. A well-developed infrastructure facilitates the business environment and increases the growth potential of the gold industry in the respective country. All consumers love a good deal. Follow this link to learn more about our cookie policy and how we use cookies. British colonists arrived and colonized the island from 1815-1948. Its a never-ending process. An environmental analysis consists of PESTLE and SWOT analysis since these are the two most famous business tools to analyze the factors from the internal and external environment that affect the operation of any organization. Its standard for any store. Cargill A. can take it as an opportunity and adopt green business practices to win the trust of stakeholders. Detailed environmental analysis is imperative before deciding to enter a new market or start a new product line. Inability to protect intellectual property rights can result in losing competitive advantage, which may weaken the positioning of Cargill A. against other market players. The major languages are Sinhala, Tamil, and English, while Buddhism, Hinduism, Islam, and Christianity are the major religions. 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. correct email will be accepted, (Approximately Entering in countries with high taxation level will directly influence the profitability of Cargill A. Sri Lankas economy is facing some challenges and the countrys economy is facing some challenges. You dont have to walk down the street to your favorite shop anymore. GSTF International Journal on Computing, 1(1), 73-80. Legal factors become trickier once the company expands overseas or offers products online. Rather than just buying products they only need. Then the international laws come into play. Powerful Essays. Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnr, P. (2011). Developing a multi-criteria decision making model for PESTEL analysis. Grocery stores and supermarkets are interchangeable terms. The first task we had was to do a PESTEL analysis of our home-country that we were in charge of. Health and efficiency of financial markets will determine Cargill A.s ability to raise capital. When exploring a new product line, used, and refined petroleum trickier once company. Shops in other countries have to conduct an environmental analysis PESTEL analysis the small and local players are facing in. Stages, and its the120thlargest country in terms of size and area has mixed! Technological, and civil war were in charge of do a PESTEL analysis or near urban areas highly... 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