LinkedIn, Messenger, Instagram, and Facebook are some of the most popular social media platforms. A strategic framework for technology evaluation. A PESTLE analysis is used in business to assess the industry which an organisation is in. After that, the growth stage arrives. Read More. The only thing left for the company to do about these changes is abide by them. A stronger economy allows consumers to buy products they want. Use of social media has become common in a modern business environment. PESTLE analysis is a business tool that analyses the external factors affecting an organizations operations. Pestle Analysis on Sri Lanka. Ceramic tiles industry in Sri Lanka has over 34 years long history in manufacturing and distributing tiles all over the country as well as exporting them to many foreign countries in the world. The country has a mixed legal system and its employment laws do not distinguish between foreign or local employees. A critical study on Various Frameworks used to analyses International Business and its Environment. The grocery industry experienced the shakeout stage in the 1970s and 80s. Majority of the people live in rural areas and rely significantly on agriculture for their livelihood. In case of a global recession, the purchasing power of the people will drop, and the grocery industry will observe severe financial losses. 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. Tea and womens undergarments are the two top exports of Sri Lanka that mostly go to countries such as the USA, the UK, India, Germany, and Italy. Chat with us Economic factors affecting Sri Lanka. There are a lot of people working in the grocery industry. When the organizations figure and execute the techniques, the political field has an immense effect on organizations' guidelines and buyers and different organizations' spending force. Likewise, communal tensions and discrimination due to low caste system also need to be addressed. As a result, the stronger companies acquire the smaller companies or force them out of the industry. And as the retailer grows, new legislative laws come into effect. The growing environmental pollution coupled with technological advancement has compelled business organizations to adopt innovative recycling and waste management practices. Copyright 2017 2025. 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 is because grocery stores mainly buy food and beverage products from wholesalers. Life expectancy is very good as evidenced from the fact that it is 72 years for men, and 78 years for women (BBC, 2019). Social factors: Buying in bulk and collecting endless data. All consumers love a good deal. For instance, people enjoy buying products in bulk. The business practices of the Cargill A. are influenced by the prevailing economic structure. Scope of Sri Lanka - PESTEL Analysis Report. These steps can help you get back, Copyright 2020 Weberience LLC. 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. ~ 0.0 Page). Cargill A. should also attempt to understand the degree of consumer ethnocentrism and consider the country of origin effect to determine local consumers evaluation of foreign products. However, its main imports are broadcasting equipment, gold, cars, knitted fabrics, and refined petroleum. Companies set targeted ads to customers most likely to visit their stores and buy from them. Accordingly, we never encourage or endorse its direct Since grocery stores hold great significance, today we have decided to conduct a Grocery Industry Analysis. High taxation affects international trade and prevents exports. Daidj, N. Technological environment is the next element to discuss in the PESTEL analysis of Sri Lanka. A PESTLE analysis takes Political, Social, Economic, Legal, Technological, and Environmental factors into account. Integrity, Cargill A Case Analysis and Case Solution, 3-Joe-Smith-s-Closing-Analysis-A-Spanish-Version, 4452-China-Versus-Japan-On-the-Verge-of-a-Trade-War, 4453-Alleviating-Poverty-and-Malnutrition-Successful-Models, 4457-Sugar-Daddy-Quotas-and-the-U-S-Government, 4458-Australian-Wheat-Board-Ltd-Becoming-a-Grower-owned-Corporation, 4459-Global-Farmer-and-the-Future-of-Soybean-Production-Spanish-Version, 4460-Global-Wine-Wars-New-World-Challenges-Old-A-Spanish-Version, 4461-Global-Conservation-Trust-A-Foundation-for-Food-Security. It doesnt distinguish between local and foreign workers. Political - turmoil, Economy - shambles, Social - upheaval, Technology - fallout as no power, Environment - distraction due to poor policy implementation, Legal - politicised hence no consistency. This article is only an example The industry analysis consisted of three stages. PEST Analysis: Sri Lanka. The grocery industry holds great significance since it provides groceries and employment to millions of people. are considered rare or which species are endangered whose excessive consumption can cause trouble for the organization. Analyze the Sri Lanka external competitive environment to identify opportunities and threats. Certainly, rapid human development is having its toll on the environment. Its worth noting it here that the country has a literacy rate of more than92%, and its highly admirable. They contribute significantly to keeping the retail industry functional. The threat of substitution is really high in the grocery industry. However, grocery stores are smaller and contain specialized items mainly relevant to food and beverages, while supermarkets are huge and have different departments. November 2022. That doesnt mean they should avoid having a business website or showcase their products online. As more people join, the competition in the industry increases. Some examples of environmental factors that Cargill A. need to consider are given below. The country exports it toItaly,Germany, India,UK, and theUSA. The adoption of new technologies has shortened the lifecycle of new product development. The retail industry is everywhere. The extreme poverty level, environmental issues, and inflation are some of the main issues. A framework for PEST analysis based on fuzzy decision maps. Help, Academic Although, Limited-service restaurants in Indonesia saw impressively strong growth in terms of overall transactions in 2022 a turnaround from 2021s continued decline.. The major social networking sites in the country in terms of number of users are Facebook, Instagram, Messenger, and LinkedIn. As does data and copyright laws. Moreover, even if the grocery store tries to charge a different price from the market, buyers will simply switch to other grocery stores since many substitutes are available. He holds an MSc in Tourism & Hospitality from the University of Sunderland. The Sri Lankan political environment is facing some challenges like suppression of freedom of speech, political dominance struggle, and civil war. 5 Market Analysis 5.1 Regulatory Scenario . This repels customers. Country Profiles examine the economic and political trends in 210 countries and associated regions, serving as a one-stop-shop for data and analysis on the economy, political landscape and the business environment. They are certified as organic. For instance, it is a densely populated country with a high level of poverty. 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. As a result, people are now finding e-commerce a lot more convenient and switching to e-commerce. Springer Berlin Heidelberg. Technological trends can be used to start the creative social media campaigns for developing online brand communities. GSTF International Journal on Computing, 1(1), 73-80. According to the annual reports of each company that produces ceramic tiles, shows continuous growth of profits in parallel with net sales. Its basically a digital catalogue for their products. Here you can find food products, clothing, and electronics, in large quantities. Powerful Essays. Porters five forces model helps analyze the competition level in an industry. It also maintains good foreign relations with powerful neighbours such as China and Pakistan. Once a food, like lettuce, has E.coli, every store needs to toss out their lettuce. This factor of Porters five forces model identifies how much competition exists between the rivals within an industry. The report provides a comprehensive analysis of the historical development, the current state of solar power installation scenario, and its . Whether their food is actually contaminated or not. Micro EVs Market SWOT Analysis by Key Players Textron, Polaris, Baoya Mar 1, 2023 For instance, corporations fear a soda tax; its an increased tax for selling soda in stores. However, Sri Lanka also faces some environment challenges e.g. Grocery stores are one of the sub-sectors of the retail industry, along with six other sub-sectors. Revista ESPACIOS, 39(16). 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. In the early days, people preferred buying groceries from grocery stores. 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. Each society has distinctive norms and values that play an important role in shaping consumer behavior. The demand and supply of labor determine the wage rates and supply of skilled workforce. Its always there, even when buyers dont have the funds to buy their products. Each country must abide by their political regulations. A well-developed infrastructure facilitates the business environment and increases the growth potential of the gold industry in the respective country. If not, select "Manage Preferences" to learn more about managing your cookie preferences. 8.4 Bn. It requires Cargill A. to prioritize and focus on marketing the eco-friendly nature of their products over customary value propositions. Besides that, in the growth phase, consumers have many alternatives. Just turn on your smartphone and start shopping online. Developing international strategies. (2009). Operating in countries with high corruption level and weak law enforcement makes the business environment increasingly unpredictable for Cargill A. due to jeopardized public trust on business organizations and overall political and economic structure. Changes in weather and climatic conditions can influence business efficiency. Help, Academic M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. This can only happen if the suppliers are low in numbers or they are supplying something very unique or scarce. The GDP growth rate will determine the Cargill A.s ability to pursue its long-term growth strategies. It is officially known as the Democratic Socialist Republic of Sri Lanka. In 2008 International Conference on Information Management, Innovation Management and Industrial Engineering (Vol. The growing environmental consciousness and changing climatic conditions have made environmental analysis an important part of the PESTEL analysis. The startup stage is the very first stage of the industry life cycle. So without wasting time, lets proceed and analyze the competition in the grocery industry. Detailed environmental analysis is imperative before deciding to enter a new market or start a new product line. Similarly, market segmentation based on social class may be ineffective where social class stratification is low. The revenue and profitability of any retail store are affected by government policies. The first task we had was to do a PESTEL analysis of our home-country that we were in charge of. At this point, the industrys growth rate decreases since it is already operating at its full potential. However, if the economy is poor, it doesnt matter how many products are offered. This change in consumer behavior impacts the grocery industry negatively. 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. Marketing and human resource strategies in a traditional, patriarchal society with clearly distinguished gender roles will be different from societies with low gender stereotypes. 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. 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. Lastly, Cargill A. should study the consumers leisure interests and should focus more on enhancing the customer experience if customers prefer experiential products over traditional product offerings. A careful evaluation of legal aspects is required to avoid getting into some serious trouble. European Journal of Innovation Management, 16(3), 285-300. Its one of the few industries who managed to scrape through. Files are delivered directly into your account soon after payment is received and any tax is certification is verified (where applicable). But just like every other industry, the retail sector is affected by the six principles of PESTLE/PESTLE analysis. There are multiple stages in the life cycle of any industry. Sri Lanka is a member of some of the powerful and prestigious institutions in the world such as the UN, the Commonwealth, the Colombo Plan, SAARC, IMF, the World Bank, and the Asian Development Bank. In some cases, this can be beneficial. Back then, the concept of a grocery store was very new, and few grocery stores existed. If you are happy with this select "Accept All". Service, Dissertation Stores other than CostCo now mass stock various products to avoid running out quickly. Political stability will . BAC Reports. Mobile adoption is very strong, but innovation potential is lacking. The packaging is usually made up of plastic, and plastic causes environmental degradation. However, buyer power represents the power of buyers to dictate the prices in the market. Not following these laws exactly as outlined will lead to legal troubles like bankruptcy and foreclosure. 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. Proposal, Assignment Writing Thats when customers got attracted to grocery stores, and as a result, the number of grocery stores increased. Since grocery stores are a lot more than supermarkets, they are responsible for providing employment to many people. Economic. Besides that, grocery stores are not owned by huge chains, unlike supermarkets. Currently, the economy worldwide is in a great spot for retail industries to expand. Cargill A. can enter in low taxation markets and benefit from high profits that can be invested in research and development activities. Dissertation Major political instability and distressed government finances have blighted Sri Lanka, which is mostly unfree for economic freedom. In a political context, the key to success in a dynamic international business environment is to diversify the systematic risks. A retail store needs to meet legislative conditions before opening the shop. All Rights Reserved, Economic factors: Nearly $30 trillion dollars in a couple more years, Social factors: Buying in bulk and collecting endless data, Technological factors: A digital catalogue for easy browsing, Environmental factors: Contamination and blockchain technology, A stronger economy allows consumers to buy products they want, more disposable income to spend on friverous products, main social factors affecting the retail industry, They use market research to identify buying trends, about environmental issues inside of the stores, General Mills SWOT Analysis: 3 Opportunities to Gain Competitive Advantage, Root Cause Analysis: An Easy 6-Step Complete Guide, Mayo Clinic SWOT Analysis 2023: Healthcare Business Checkup, 3 Top Tech Tools for the Modern Commercial Contractor, Strategies for School and College Security, Steps to Secure your Business After a Cybersecurity Breach. The data protection has become an important issue due to consumers privacy and security concerns. The power distance within any society shows the acceptance of hierarchy and income inequality. The country is drawing a lot of foreign investments every year. Sri Lanka PESTEL Analysis - Comprehensive Country Outlook. Then you have to assess the competition in that industry. IFS marks 25th anniversary of the inception of its operations in Sri Lanka as it sees continued success in technology excellence It has very close cultural interactions with India as well. If you have BIG dreams to score BIG, think out Theyll spend the bare minimum on food while the rest goes towards unpaid bills. Academic writing has no room for errors and mistakes. Where would I buy groceries from? The public authority is a combination of the parliamentary and official framework. PESTEL. This factor analyses how threatened companies feel in an industry from getting substituted. If there are a lot of companies selling similar products, then the threat of substitution will be high. Ignorance in this regard can cause undesired circumstances for Cargill A., such as- hurting competitive advantage as a result of intellectual property rights violation and harmed organizational image due to violation of consumer/employee/environment protection standards. Cargill A. needs to consider the following political factors during the strategic planning process: High political stability provides a stable and friendly business environment with predictable market growth trends. Out of which, the per capita income of the country was3697dollars, and its113thworlds highest. Consumer preferences are the main social factors affecting the retail industry. There is a variety of Herbal Toothpaste that rich in calcium and minerals. I cant even imagine how difficult my life would be. Because when contamination happens, every store in the chain has to get rid of the product. It is worth noting that Sri Lanka faced a number of political challenges e.g. It is an acronym for political, economic, social, technological, environmental and legal factors that shape the macro business environment. Although the state is trying to make the investment climate more attractive, economic mishandling is adversely affecting output, which is pressurised by hyperinflation. Result, people are now finding e-commerce a lot of companies selling similar products then... Of porters five forces model identifies how much competition exists between the rivals within an industry getting... Organizations to adopt innovative recycling and waste Management practices a grocery store was very new, its. People join, the concept of a grocery store was very new, and electronics, in large quantities many. 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Set targeted ads to customers most likely to visit their stores and buy from them expand... Feel in an industry the wage rates and supply of skilled workforce whose excessive consumption cause. Full potential distance within any society shows the acceptance of hierarchy and income.... Can help you get back, Copyright 2020 Weberience LLC the macro business environment can be invested in research development. To do a PESTEL analysis of Sri Lanka faced a number of users are Facebook, Instagram,,. Room for errors and mistakes more convenient and switching to e-commerce used to start the creative social media campaigns developing... Security concerns CostCo now mass stock Various products to avoid running out.! A new market or start a new product development to be addressed important part of the gold in..., 285-300 consumer behavior of users are Facebook, Instagram, and Tourism the prices in growth! And buy from them external competitive environment to identify opportunities and threats it toItaly,,... Do about these changes is abide by them is certification is verified ( where applicable ) grocery store very! Working in the growth phase, consumers have many alternatives buy products they want holds an MSc in &... Within an industry parallel with net sales to learn more about managing your cookie preferences likewise, communal tensions discrimination. Online and offline with an emphasis on business Management, Innovation Management and Industrial Engineering (.. Legislative laws come into effect to dictate the prices in the chain has to get rid of the popular! The early days, people preferred buying groceries from grocery stores increased just on. Research and development activities suppliers are low in numbers or they are supplying something very unique or.... Security concerns industry life cycle foreign relations with powerful neighbours such as and... To diversify the systematic risks research and development activities when customers got attracted to grocery stores, and electronics in. Product development the historical development, the current state of solar power installation scenario and. Is drawing a lot more than supermarkets, they are responsible for employment. The organization adoption is very strong, but Innovation potential is lacking about these changes is abide them., people enjoy buying products in bulk are affected by government policies shape the business. Requires Cargill A. to prioritize and focus on marketing the eco-friendly nature of their products.! Environmental degradation charge of attracted to grocery stores a literacy rate of more than92 %, plastic! Out quickly and waste Management practices highly admirable more than92 %, and theUSA even when buyers have. Of users are Facebook, Instagram, and Facebook are some of the people live in areas... Local employees buying groceries from grocery stores are a lot of people working in the PESTEL of..., unlike supermarkets with a high level of poverty on your smartphone and start shopping.. Are responsible for providing employment to millions of people Hospitality from the University Sunderland... Poor, it doesnt matter how many products are offered and linkedin the parliamentary and official.! On agriculture for their livelihood its environment how threatened companies feel in an industry that! Find food products, then the threat of substitution will be high retail industries to expand highly admirable framework PEST...