BAC Reports. Cargill A. must consider the following social factors to conduct macro-environmental analysis: Changes in demographic patterns like aging population, migration trends and socio-economic variables have paramount importance for international business organizations like Cargill A. The retail industry is everywhere. For instance, corporations fear a soda tax; its an increased tax for selling soda in stores. 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. 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. However, Indian and Sri Lankan cultures are almost the same. Because when contamination happens, every store in the chain has to get rid of the product. If they dont, not only will the food by pulled from the shelves, but it could also lead to legal troubles for the company. This is the third major source of revenue generation to the economy. Hence, the sales of grocery stores also increase. PESTEL Analysis of Royal Ceramics Lanka PLC Political - The . 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. It has very close cultural interactions with India as well. However, the average life of men and women in the country is 72 and 78 years old. 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. Its standard for any store. So naturally, this causes rivalry among grocery stores. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. By doing so, the grocery industry can generate huge sums of money. Financial Times Prentice Hall. on WhatsApp for any queries. The data protection has become an important issue due to consumers privacy and security concerns. Rather than just buying products they only need. Analyze the Sri Lanka external competitive environment to identify opportunities and threats. November 2022 | 35 pages | ID: S0B95217862AEN. For instance, it is a densely populated country with a high level of poverty. 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. Consequently, a huge number of tourists flock to the country every year. Following economic factors need to be considered by Cargill A. to make informed decisions: The economic development of a country directly influences organizational performance. However, now people prefer groceries from supermarkets. Not following these laws exactly as outlined will lead to legal troubles like bankruptcy and foreclosure. Economists are predicting a global recession. In this industry, buyers set prices because they are sensitive to prices. Technological environment is the next element to discuss in the PESTEL analysis of Sri Lanka. IFS marks 25th anniversary of the inception of its operations in Sri Lanka as it sees continued success in technology excellence Andr Cavalcante, S. (2013). Cargill A. must adjust its business management practices while entering in markets with high or low power distance. The Democratic Socialist Republic of Sri Lanka or Ceylon is a South Asian island country. Curious about how we partner with you to help you solve your complex modern-day business problem? Email Delivery - PDF (on default), Hard Copy Mail Delivery (+US$ 190.00) Download PDF Leaflet. The minimum monthly wage according to the National Minimum Wage Act is 10,000 Rupees worth 50 US dollars. Weve seen shifts in how eCommerce retail leaders operate over the last few years. A stronger economy allows consumers to buy products they want. Developing a multi-criteria decision making model for PESTEL analysis. Sustainable business strategies and PESTEL framework. Although, Limited-service restaurants in Indonesia saw impressively strong growth in terms of overall transactions in 2022 a turnaround from 2021s continued decline.. With the help of this tool, companies decide if they should enter an industry. These regulations impact the economy, consumer buying habits, and international trade laws. Organizational culture derives strong influence from the societal norms, values and trends. If not, select "Manage Preferences" to learn more about managing your cookie preferences. So without wasting time, lets proceed and analyze the competition in the grocery industry. Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnr, P. (2011). Since grocery stores are a lot more than supermarkets, they are responsible for providing employment to many people. Sri Lanka is a South Asian country that has a rich cultural heritage. Use of social media has become common in a modern business environment. 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. This investment will also increase stakeholder satisfaction and expand the customer base due to enhanced brand image. 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. 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 technology advances, stores are adopting new systems, software, and hardware. Buddhism is the majority religion, and roundabout 70.2% of the people believe in Buddhism. (Ed.). The maturity stage leads to the decline stage. A PESTLE analysis takes Political, Social, Economic, Legal, Technological, and Environmental factors into account. Not only to streamline services, but also to reach audiences worldwide. The growing environmental pollution coupled with technological advancement has compelled business organizations to adopt innovative recycling and waste management practices. Many countries have placed strict norms to protect their urban areas through effective waste management. This report series allows you to understand the macro-economic environment as a basis for strategic planning. 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. This factor of Porters five forces model identifies how much competition exists between the rivals within an industry. Back then, there wasnt enough technology for e-commerce, and few supermarkets were present. submission, reproduction, or any other misuse in any manner. There are a lot of people working in the grocery industry. In FY22, the company obtained three new patents; in addition, it submitted 36 new designs and applied for about 44 more patents across several . Such changes can also influence the consumers' spending patterns, causing the organization to revise its product and marketing strategies. As the population is increasing over the years, the grocery industrys customer base increases if they can attract new customers. We are here to help. We offer syndicated research reports (like country analysis, SWOT analysis, competitive intelligence, industry reports, company reports and market analysis & trends reports) and custom market research from our website MarketResearchReports.com only. Providing a secure work environment for the workforce is the ethical and moral obligation of Cargill A. 3 of 2016 ensures that employees are paid a national minimum monthly wage of 10,000 Sri Lankan rupee which is equivalent to around 50 US dollars. By 2020, the industry may see global sales nearing $30 trillion. It maintains very good relations with India; however, the relationship was tested a number of times in the past. 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. Therefore, if there is high inflation, people will be reluctant to buy more. Herbal Toothpaste is made of natural ingredients. Our site uses cookies to improve functionality. Via helps you navigate a fast-changing digital marketplace. Cargill A. must study the specific environmental regulations of the country under consideration to understand which resources (like water, electricity etc.) air and water pollution, dilapidation of mangroves, deforestation, over fishing, and poor waste management. Sri Lankan Island has an area of25,330square miles, and its the120thlargest country in terms of size and area. Whether their food is actually contaminated or not. Similarly, it is important to understand the industry lifecycle stage. After that, it reaches the maturity stage, and then finally, it goes through the decline stage. The Grocery industry experienced growth in the 19th and 20th centuries when the food industry evolved and grocery stores started offering packaged food. Its one of the few industries who managed to scrape through. Or when a certain industry is hit harder than others. Total Sri Lankan oral care market share is approximately Rs. Major political instability and distressed government finances have blighted Sri Lanka, which is 'mostly unfree' for economic freedom. Although the state is trying to make the investment climate more attractive, economic mishandling is adversely affecting output, which is pressurised by hyperinflation. The major social networking sites in the country in terms of number of users are Facebook, Instagram, Messenger, and LinkedIn. are considered rare or which species are endangered whose excessive consumption can cause trouble for the organization. There are almost 40,000 stores in the US that sell groceries. Cargill A. should also carefully analyze the availability of skilled human capital as a shortage of skilled labor can affect business efficiency and make talent attraction and retention more challenging. Grocery stores are afraid to get substituted since a huge number of homogeneous stores exist that offer the same products. It doesnt distinguish between local and foreign workers. This is why grocery stores in the industry feel threatened. (2018). International business. The high fluctuation on local currency can be a cause of serious concern for Cargill A. 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. Strategy planning process often requires five steps -. US$ 300.00. Growing economies offer wide-ranging growth opportunities to the Cargill A. The organization may also study the industry specific taxation policies to understand the host government's priorities and interest in developing industries. A recommendation is that the company's strategies must include the external factor of rising health consciousness among consumers. Its non-negotiable. It is a multi-party democracy; however, the main contest of political dominance is confined to a small number of parties. The adoption of new technologies has shortened the lifecycle of new product development. However, the average life of men and women in the country is 72 and 78 years old. Just turn on your smartphone and start shopping online. Cargill A. cannot enter a new market without studying in detail the legal environment and regulatory structure of the new consumer market. Then, an industry goes through the shakeout stage. If other companies used this, they would know whether their lettuce is truly contaminated. PDF | On Jun 2, 2020, Poh-Chuin Teo and others published Analysis on Competitiveness of the Handicrafts Industry: A Case of Sri Lanka | Find, read and cite all the research you need on ResearchGate 1. Hence all the suppliers have identical products. 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. Similarly, market segmentation based on social class may be ineffective where social class stratification is low. Over the years, the trends have changed. 24-27). According to an estimate, the computer literacy of Sri Lanka is roundabout30.1%, and its very low. Hence, the grocery industry suffered. Cargill A. can leverage the opportunities offered by social media marketing to improve business performance. Currently, the economy worldwide is in a great spot for retail industries to expand. 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. This will cause the demand for grocery stores to fall significantly. November 2022. Stores offering food products must comply with health guidelines proposed by the government. A strategic framework for technology evaluation. Other relevant articles for you are: PESTEL analysis of the Fashion Retail Industry in the UK. A detailed understanding of the economic environment can help Cargill A. estimate the growth trajectory of industry and organization. The observation of social class stratification is also important for Cargill A. PESTEL. In the year 2015, Sri Lanka has exported approximately 467 Million U.S dollars' worth of Cinnamon. A careful evaluation of legal aspects is required to avoid getting into some serious trouble. Issa, T., Chang, V., & Issa, T. (2010). Each society has distinctive norms and values that play an important role in shaping consumer behavior. This negative current account balance indicates the Sri Lanka is net borrower from the whole world. take time-critical decisions. 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. The competition in this market is increasing and the small and local players are facing difficulties in survival. 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. Thats when shops began to establish. Daidj, N. More retail shops are offering food products. M Market Research Reports and the M Market Research Reports Logo are registered trademarks of Market Research Reports, Inc. Disclaimer: Market Research Reports, Inc. has no affiliation to, and is not associated with any other website(s) or organization(s). Thank you for your email subscription. 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. For instance, people enjoy buying products in bulk. The retail industry was able to hold itself up even during the recession. Employment to many people this investment will also increase endangered whose excessive consumption can trouble! Detailed understanding of the Fashion retail industry in the country is 72 and 78 years old dollars & # ;. On local currency can be a cause of serious concern for Cargill A. the... Reaches the maturity stage, and LinkedIn s strategies must include the external factor of rising health consciousness consumers! 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