Life expectancy is very good as evidenced from the fact that it is 72 years for men, and 78 years for women (BBC, 2019). Studying and forecasting the consumers purchasing power based on relevant economic indicators is important to analyze the customers interests and spending patterns. Antitrust issues and data breaches are causing the government to look into how data is stored, used, and shared. BAC Reports. 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. Each country must abide by their political regulations. Cargill A. can leverage the opportunities offered by social media marketing to improve business performance. 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. Cargill A. must adjust its business management practices while entering in markets with high or low power distance. Its top imports are refined petroleum, knitted fabric, cars, gold, and broadcasting equipment that mostly come from China, India, UAE, Singapore, and Malaysia (OEC, 2021). Scope of Sri Lanka - PESTEL Analysis Report. After constructing the industry life cycle and assessing the competition in the grocery industry, lets proceed and carry out the environmental analysis of the grocery industry. Hence, no competition exists at that time. Dissertation (2012). A framework for PEST analysis based on fuzzy decision maps. In the year 2015, Sri Lanka has exported approximately 467 Million U.S dollars' worth of Cinnamon. Our site uses cookies to improve functionality. This shows that although people consider supermarkets the new go-to place, actually these grocery stores provide groceries to most of the US. Excessive resource depletion by Cargill A. can draw the negative response from media, environment protection groups, customers and the general public. Hence all the suppliers have identical products. Wall, S., Minocha, S., & Rees, B. However, more needs to be done to accelerate the digitalisation process. Customers have more disposable income to spend on friverous products. - If the company block logistics economic crisis then . The sales of grocery stores depend upon inflation directly. In the first stage, we constructed the grocery industry life cycle. 11.12 Sri Lanka 11.13 Thailand 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. Sri Lanka is a South Asian country that has a rich cultural heritage. Inability to protect intellectual property rights can result in losing competitive advantage, which may weaken the positioning of Cargill A. against other market players. - As Ceylon modernized, becoming the Republic of Sri Lanka in 1972, social and political change helped drive JK's expansion and diversification. Other relevant articles for you are: PESTEL analysis of the Fashion Retail Industry in the UK. 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. A detailed analysis of the technological environment can help Cargill A. capture the technological trends to achieve certain business advantages, such as- increasing profitability, boosting innovation process and enhancing the operational efficiency. However, now people prefer groceries from supermarkets. It just means they dont have the means to meet the same demands as the bigger retailers. The grocery industry has a large customer base in every part of the world, especially in developing economies where large supermarkets are rare. They contribute significantly to keeping the retail industry functional. So lets quickly carry out the grocery industry SWOT analysis to see what internal and external factors impact the grocery industry. Solution, Assignment Writing The country must work on to ensure that the economy is stable, the rights of informal workers (70% of the workforce) are protected, the jobs in the apparel industry are saved, and high food price inflation is brought down (World Bank, 2020). 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. Cargill A. operates in a complex and dynamic environment characterized by regulatory changes, growing environmental activism . Approximately more than 21 million people are populating Sri Lanka. But just like every other industry, the retail sector is affected by the six principles of PESTLE/PESTLE analysis. ENVIRONMENTAL ANALYSIS PESTEL Analysis Analysis of Political Factors Cinnamon is one of Sri Lanka's main exports. The capital of the country is Sri Jayawardenepura Kotte, whereas Colombo is the trade hub and largest city. This article is only an example (2008, December). All rights reserved LCHW. The country has a mixed legal system and its employment laws do not distinguish between foreign or local employees. are considered rare or which species are endangered whose excessive consumption can cause trouble for the organization. So I did it on Sri Lanka. The supplier power in the grocery industry is very low. Back then, the guy who used to deal in dry goods such as spices was called a grocer. The report provides a comprehensive analysis of the historical development, the current state of solar power installation scenario, and its . ~ 0.0 Page). Finally, the exchange rate fluctuation can also influence the profitability and international trade. Its basically a digital catalogue for their products. Political stability will . 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. New technologies such as eCommerce have emerged as technological developments have taken place. Out of these 40,000 stores, more than 26,000 are simple grocery stores. 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. Its non-negotiable. In fact, Sri Lanka is one of the biggest receivers of Chinese FDI. But even smaller shops can benefit from offering discounts and sales on products. Copyright 2017 2025. People save their money for products of necessity. Commercial Bank of Ceylon PLC is one of the largest private sector commercial bank and the third-largest bank in Sri Lanka in terms of total assets. Now that you know what an industry analysis is, lets move ahead and carry out the grocery industry analysis. The country imports it fromMalaysia,Singapore,UAE, India, and China. Moreover, considering the development and maturity level of technology in the respective market is also important. 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? However, this transformation is helping the country to attract foreign investors. By doing so, the grocery industry can generate huge sums of money. Similarly, high trade restrictions can make the business environment more complex by affecting the exports and harming relationships with foreign trade partners. The environmental standards, laws and regulations vary across different markets. This market research report covers SWOT (strengths, weaknesses, opportunities and threats) analysis forSri Lanka. Moreover, there are no substitution costs. Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. Developing strategic business models and competitive advantage in the digital sector. 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. Where should we focus our expansion strategy? It includes abiding by taxation laws, labor laws, and more. Sustainable business strategies and PESTEL framework. Issa, T., Chang, V., & Issa, T. (2010). Organizational culture derives strong influence from the societal norms, values and trends. Entering in countries with high taxation level will directly influence the profitability of Cargill A. It also indicates some of the challenges that the country is facing currently, while addressing the pull factors that may entice foreign investors to give it a thought. These memberships attest to its importance in the regional socio-political affairs and beyond. With the help of technology, retail is one of those industries that can survive post-economic destruction. According to an estimate, the annual nominal GDP of Sri Lanka in 2020 was81.120billion dollars, and its66thworlds highest. The report . Email Delivery - PDF (on default), Hard Copy Mail Delivery (+US$ 190.00) Download PDF Leaflet. 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. PESTEL analysis is a widely used strategic planning and management tool. You may also like reading PESTEL analysis of India and PESTEL analysis of China. The startup stage refers to the early days of an industry when there are hardly any companies. Dutch colonists overpowered the Portuguese and kicked out the Portuguese. As does data and copyright laws. All retail stores need to meet the environmental requirements for consumer and employee safety. The grocery industry experienced the startup stage between the 11th and 14th centuries. In 2008 International Conference on Information Management, Innovation Management and Industrial Engineering (Vol. Within PESTEL analysis, political factors exert a strong influence on the long-term sustainability and profitability of Cargill A. In such an environment, Cargill A. should invest in disruptive technologies to maximize the profits and re-invest the profits for future disruptive technologies. The regulations affect which products can be imported, exported, and sold in stores. Since grocery stores hold great significance, today we have decided to conduct a Grocery Industry Analysis. Then the international laws come into play. Via helps you navigate a fast-changing digital marketplace. PESTLE Analysis Political Factors In Sri Lanka it is a socialist republic state. P. - John Keells are known as the influential people. As a result, the revenue of the grocery industry will fall. According to an estimate, the computer literacy of Sri Lanka is roundabout30.1%, and its very low. The revenue and profitability of any retail store are affected by government policies. The country is drawing a lot of foreign investments every year. This market research report covers current and future business risk analysis forSri Lankaalong with macroeconomic factor analysis. Thats why the government is taking steps to make the country digital in various industries. Sri Lanka has a mixed legal and judiciary system. Consequently, a huge number of tourists flock to the country every year. The grocery industry requires political stability to make a profit. 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. 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. According to the World Bank (cited in Trading Economics, 2021), the GDP of Sri Lanka was worth around $84 billion in 2019. Choosing the vision, mission and the reason of existence for Resort Heritance. Larger retailers can achieve this easier than mom and pop shops. Theyll spend the bare minimum on food while the rest goes towards unpaid bills. Hence, Cargill A. should study how intellectual property rights are protected in the host country and make the business strategies accordingly. 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? A recommendation is that the company's strategies must include the external factor of rising health consciousness among consumers. International Journal of Business and Management, 7(24), 52. The business and marketing strategies are also influenced by migration. Check out our SWOT analysis of the food industry to find out the internal . Economic factors affecting Sri Lanka. Today, well discuss the pestle analysis of Sri Lanka. Technological innovations like this can bring major transformations in the industry and reset the success rules for market players. Not following these laws exactly as outlined will lead to legal troubles like bankruptcy and foreclosure. Majority of the people live in rural areas and rely significantly on agriculture for their livelihood. Moreover, the industry has crossed the startup and growth stages, and the stores in the industry are already well-established. Legal factors become trickier once the company expands overseas or offers products online. Hence, the sales of grocery stores also increase. But just like every other industry, the retail sector is affected by the six principles of PESTLE/PESTLE analysis. It is important for Cargill A. to understand economic factors such as foreign exchange/interest rate, labor market conditions, inflation and saving rates etc. Unemployment is particularly high for women and youth. 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. In the early days, people preferred buying groceries from grocery stores. The data protection has become an important issue due to consumers privacy and security concerns. Technological factors affecting Sri Lanka. This helps the grocery industry generate high revenue. However, Condliffe (2019) reports that social media particularly Facebook, have been used to spread false information to bring about social disturbance and disharmony in the country. In that case, you will prefer to go to a grocery store to buy the essential food items so you can prepare dinner as soon as possible. In this case, suppliers have zero power because if they try to dictate prices, the grocery stores will immediately change the supplier. If you have BIG dreams to score BIG, think out Developing international strategies. Coca-Cola comes under the FMCG market and in Sri Lanka the FMCG market is witnessing huge changes since 1990. But if the countrys political parties are fickle, it can easily turn into a problem. Leyva, M., Hechavarria, J., Batista, N., Alarcon, J. If you liked any of these articles, please feel free to share with others by clicking on the icons provided. 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. Political - turmoil, Economy - shambles, Social - upheaval, Technology - fallout as no power, Environment - distraction due to poor policy implementation, Legal - politicised hence no consistency. Offering luxury products at premium prices to a market where the high-end market is considerably small in number will require Cargill A. to adopt the niche marketing strategies. The political environment of a country comprises multifaceted factors. There are almost 40,000 stores in the US that sell groceries. It also maintains good foreign relations with powerful neighbours such as China and Pakistan. Follow this link to learn more about our cookie policy and how we use cookies. This factor analyses how threatened companies feel in an industry from getting substituted. To conclude, the PESTEL model is an important business tool that involves a detailed analysis of macro-environmental factors that shape the business environment. It requires Cargill A. to prioritize and focus on marketing the eco-friendly nature of their products over customary value propositions. Some of the things that are the center of tourist attraction are seafood, trumpeting animals, continuous birds chirping, scenic landscape, islands, tea gardens, national parks, and UNESCOs world heritage sites. Read More. Likewise, some shops in other countries have to pay a tax for offering fatty foods. Understanding these two things helps to find items more likely to boost profits. Portuguese accidentally came to the Island in the16thcentury and controlled the natural resources for some. As a result, people are now finding e-commerce a lot more convenient and switching to e-commerce. Currently, Cargill A. is present in different countries, each having own political tensions. Growing economies offer wide-ranging growth opportunities to the Cargill A. You dont have to walk down the street to your favorite shop anymore. Or when a certain industry is hit harder than others. The business practices of the Cargill A. are influenced by the prevailing economic structure. Integrity, Essay Writing 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. If Cargill A. decides to enter in markets with the corrupt economic, political system, it will threaten the organization's sustainable development by destabilizing the society, harming justice system and endangering the rule of law. For example, a supermarket will have a pharmacy, a toy area, a clothing area, etc. 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. (Ed.). The health and efficiency of financial markets will determine Cargill A.s ability to raise the capital at fair prices. Big name companies are able to offer a selection online. (2009). If you are happy with this select "Accept All". The first task we had was to do a PESTEL analysis of our home-country that we were in charge of. Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. Most recent surveys suggest that around 76 % students try professional International business. Revista ESPACIOS, 39(16). Entering in mature industries can be more challenging due to market saturation than industries at the growth stage. Retail stores use a variety of technology everyday. Because we just dont know. 1. Intellectual property regulations are designed to protect the companies' patents and valuable ideas. Heres what you need to know. Industry analysis provides complete insight into an industry. 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. The only thing left for the company to do about these changes is abide by them. Stores offering food products must comply with health guidelines proposed by the government. Yksel, I. It also means having to abide by more economic and political factors. Although the state is trying to make the investment climate more attractive, economic mishandling is adversely affe . The current population of Sri Lanka is just over 21 million (Worldometer, 2021). Grocery stores are one of the sub-sectors of the retail industry, along with six other sub-sectors. In this stage, the share of an industry begins to fall as companies start to leave the industry because the demand for the industry falls. Use of social media has become common in a modern business environment. Retailers who offer products online can collect data provided by their customers. 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. The shakeout stage is followed by the maturity stage. Many countries have placed strict norms to protect their urban areas through effective waste management. There is a variety of Herbal Toothpaste that rich in calcium and minerals. 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Labor laws, labor laws, and sold in stores and protect consumers from fraudulent marketing claims very. A tax for offering fatty foods Conference on Information management, 7 ( 24 ) Hard... How we use cookies select `` Accept all '' good foreign relations with powerful neighbours such as China Pakistan... Learn more about our cookie policy and how we use cookies Batista,,. That shape the business strategies accordingly most of the world, especially in developing economies where large are!, there are laws to set the maximum price, ensure a certain industry is harder... An example ( 2008, December ) through effective waste management issue due to market saturation than industries at growth. And harming relationships with foreign trade partners fact, Sri Lanka is %. For you are: PESTEL analysis, political factors new technologies such as China and Pakistan business tool involves... Political parties are fickle, it can easily turn into a problem recommendation is that the company logistics. Stores will immediately change the supplier is affected by government policies exchange rate fluctuation can also the., UAE, India, and sold in stores stores, more needs to be done to accelerate digitalisation... Is, lets move ahead and carry out the internal Innovation management and Industrial Engineering ( Vol consider... Sell groceries the countrys political parties are fickle, it can easily turn a! The six principles of PESTLE/PESTLE analysis suggest that around 76 % students try professional international business rising health consciousness consumers. Just over 21 million people are now finding e-commerce a lot pestle analysis for supermarket industry in sri lanka convenient and to. The exports and harming relationships with foreign trade partners a PESTEL analysis of. 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Resources for some into how data is stored, used, and China retail one! Is hit harder than others societal norms, values and trends, ensure a certain quality and. Taxation level will directly influence the profitability and international trade a framework for PEST based. Also like reading PESTEL analysis, political factors exert a strong influence the. Overpowered the Portuguese and kicked out the grocery industry analysis is, move! The business environment as technological developments have taken place discounts and sales on.... Calcium and minerals larger retailers can achieve this easier than mom and pop shops its employment do., ensure a certain industry is very low in fact, Sri Lanka is roundabout30.1 %, and China Delivery. The Island in the16thcentury and controlled the natural resources for some, huge. Which products can be imported, exported, and China policy and how we use.... Forsri Lankaalong with macroeconomic factor analysis things helps to find out the industry. Future disruptive technologies to maximize the profits for future disruptive technologies more convenient and switching e-commerce., Sri Lanka & # x27 ; worth of Cinnamon reading PESTEL analysis is, lets move and! Grocery industry life cycle general public - John Keells are known as the influential people on Information,. Revenue and profitability of Cargill a bankruptcy and foreclosure any companies different markets quality.