To conclude, the PESTEL model is an important business tool that involves a detailed analysis of macro-environmental factors that shape the business environment. 2. LinkedIn, Messenger, Instagram, and Facebook are some of the most popular social media platforms. 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. Literally. These products arent bought by retailers on a whim. Coca-Cola comes under the FMCG market and in Sri Lanka the FMCG market is witnessing huge changes since 1990. Political - turmoil, Economy - shambles, Social - upheaval, Technology - fallout as no power, Environment - distraction due to poor policy implementation, Legal - politicised hence no consistency. The major languages are Sinhala, Tamil, and English, while Buddhism, Hinduism, Islam, and Christianity are the major religions. Its not only physical retail stores under scrutiny. Lets discuss what external factors impact the grocery industry. 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. Its worth noting it here that the country has a literacy rate of more than92%, and its highly admirable. as they determine the overall economic environment of the country. Out of these 40,000 stores, more than 26,000 are simple grocery stores. If they dont, not only will the food by pulled from the shelves, but it could also lead to legal troubles for the company. 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. The grocery stores are smaller in size and offer limited products, of which almost 90% are food related. 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). Out of these 40,000 stores, more than 26,000 are simple grocery stores. 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. Copyright 2017 2025. 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. The business and marketing strategies are also influenced by migration. These steps can help you get back, Copyright 2020 Weberience LLC. Then finally, you have to conduct an environmental analysis of the industry. 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. 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. - If the company block logistics economic crisis then . When labor markets are flexible, Cargill A. can take advantage of higher labor productivity. And as the retailer grows, new legislative laws come into effect. Sri Lankan Island has an area of25,330square miles, and its the120thlargest country in terms of size and area. Total Sri Lankan oral care market share is approximately Rs. In fact, Sri Lanka has received the highest investment from China. Most companies have a business website. Understanding these two things helps to find items more likely to boost profits. Imagine a world without grocery stores. 5.4 Ansoff Matrix Analysis 5.5 PESTLE Analysis 6 Global Healthcare Staffing Market, By Service Type 6.1 Introduction . 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. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Portuguese accidentally came to the Island in the16thcentury and controlled the natural resources for some. Dutch colonists overpowered the Portuguese and kicked out the Portuguese. please submit your details here. Entering in mature industries can be more challenging due to market saturation than industries at the growth stage. The country imports it fromMalaysia,Singapore,UAE, India, and China. However, more needs to be done to accelerate the digitalisation process. After the growth stage, an industry undergoes the shakeout stage. Sri Lanka has a mixed legal and judiciary system. Use of social media has become common in a modern business environment. But it needs a lot of investment and tech acceleration. The governments in the last many years took a number of initiatives to digitalise different sectors of the economy. They are certified as organic. Andr Cavalcante, S. (2013). This PEST country analysis report on Sri Lanka provides a holistic view of the country, with insightful analysis of current and future issues, supplemented with relevant quantitative data to support trend analysis. Industry analysis provides complete insight into an industry. 1. Pestle analysis of Sri Lanka. submission, reproduction, or any other misuse in any manner. Providing a secure work environment for the workforce is the ethical and moral obligation of Cargill A. Its a never-ending process. Technological trends can be used to start the creative social media campaigns for developing online brand communities. Its basically a digital catalogue for their products. Consumer preferences are the main social factors affecting the retail industry. A PESTLE analysis is used in business to assess the industry which an organisation is in. The shakeout stage is followed by the maturity stage. 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. The hospitality industry needs to worry about . This change in consumer behavior impacts the grocery industry negatively. The high interest rate will encourage the attitude towards investment and increase growth opportunities for Cargill A. Retail stores use a variety of technology everyday. It is an acronym for political, economic, social, technological, environmental and legal factors that shape the macro business environment. This can only happen if the suppliers are low in numbers or they are supplying something very unique or scarce. 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. Strength. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Customers have more disposable income to spend on friverous products. The regulations affect which products can be imported, exported, and sold in stores. Powerful Essays. Mobile adoption is very strong, but innovation potential is lacking. 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. These regulations impact the economy, consumer buying habits, and international trade laws. The Democratic Socialist Republic of Sri Lanka or Ceylon is a South Asian island country. Just turn on your smartphone and start shopping online. The international presence of Cargill A. require the organization to consider these differences to avoid undesired circumstances carefully. 11.12 Sri Lanka 11.13 Thailand 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. However, there are some challenges facing the Sri Lankan economy. Thats when customers got attracted to grocery stores, and as a result, the number of grocery stores increased. However, if the economy is poor, it doesnt matter how many products are offered. This helps the grocery industry generate high revenue. The Sri Lankan economy is going through a massive transition. Not following these laws exactly as outlined will lead to legal troubles like bankruptcy and foreclosure. It is worth noting that Sri Lanka faced a number of political challenges e.g. Copyright 2010-23 Market Research Reports, Inc.. All Rights Reserved. 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. In fact, Sri Lanka is one of the biggest receivers of Chinese FDI. That doesnt mean they should avoid having a business website or showcase their products online. (2018). 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 observation of social class stratification is also important for Cargill A. These memberships attest to its importance in the regional socio-political affairs and beyond. The only thing left for the company to do about these changes is abide by them. Sri Lanka is a democratic republic with a semi-presidential system where elections are held regularly. Proposal, Question For instance, it is a densely populated country with a high level of poverty. Sri Lanka is a South Asian country that has a rich cultural heritage. They use market research to identify buying trends and shifts in consumer behavior. Sri Lankas economy is facing some challenges and the countrys economy is facing some challenges. 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. As more people join, the competition in the industry increases. Moreover, adopting efficient waste management practices in organizational units that are located in or near urban areas is highly crucial for Cargill A. The packaging is usually made up of plastic, and plastic causes environmental degradation. However, the average life of men and women in the country is 72 and 78 years old. Certainly, rapid human development is having its toll on the environment. Wall, S., Minocha, S., & Rees, B. The industrys supplier power represents suppliers power to dictate prices. Where should we focus our expansion strategy? By 2020, the industry may see global sales nearing $30 trillion. This stage of the industry life cycle represents growth in the industry when more people begin to join. Weve seen shifts in how eCommerce retail leaders operate over the last few years. 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. Moreover, there are no substitution costs. Hou, J., Lu, Q., & Han, Y. I cant even imagine how difficult my life would be. Or when a certain industry is hit harder than others. 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. The digitalisation process and in Sri Lanka is a South Asian country that has a rich cultural heritage and.! 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