Financial Times Prentice Hall. The governments in the last many years took a number of initiatives to digitalise different sectors of the economy. Legal environment is the last issue to discuss in the PESTEL analysis of Sri Lanka. 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. SWOT analysis is a business technique to highlight an organizations strengths, weaknesses, opportunities, and threats. 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. Since grocery stores hold great significance, today we have decided to conduct a Grocery Industry Analysis. Our premier, award-winning syndicated market research database provides detailed data and analysis on industries, economies, countries and consumers across 781 cities, 210 countries.. This can happen when unemployment rates spike. Moreover, people are also unaware of the industry at this time, so companies try hard to attract customers. The maturity stage leads to the decline stage. 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. Retail stores use a variety of technology everyday. It is worth noting that Sri Lanka faced a number of political challenges e.g. The threat of substitution is really high in the grocery 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. All consumers love a good deal. PEST Analysis: Sri Lanka. Grocery stores mainly keep packaged food items. Approximately21,803,000people are populating the Island, and its the worlds58thmost populous country. People save their money for products of necessity. This is the exact premise behind CostCo, a Canadian retailer. He is a lecturer in Management and Marketing. Not following these laws exactly as outlined will lead to legal troubles like bankruptcy and foreclosure. Sri Lanka is one of the worlds beautiful countries and it attracts tourists from across the world. Pestle analysis of Sri Lanka. Hence, the grocery industry suffered. Back then, there wasnt enough technology for e-commerce, and few supermarkets were present. A recommendation is that the company's strategies must include the external factor of rising health consciousness among consumers. please submit your details here. The economic and regulatory environment in a monopolistic or oligopolistic structure will be different from the monopolistic competition and perfect competition. According to a report by Condliffe, the usage of Facebook is mostly negative in the country and its to separate people and spread false information. Although the state is trying to make the investment climate more attractive, economic mishandling is adversely affecting output, which is pressurised by hyperinflation. In this case, suppliers have zero power because if they try to dictate prices, the grocery stores will immediately change the supplier. Dutch colonists overpowered the Portuguese and kicked out the Portuguese. It just means they dont have the means to meet the same demands as the bigger retailers. Follow this link to learn more about our cookie policy and how we use cookies. Access and download reports and data purchased through Euromonitor.com. We extract and organise ecommerce data from over 1,500 online retailers in 40 countries providing daily updates on pricing, assortment size and key attributes. However, the country has also developed very relations with regional countries likeChinaandPakistan. Check your email It means that the countrys economy is moving towards urbanization and industrial manufacturing from small rural areas. However, Indian and Sri Lankan cultures are almost the same. The only thing left for the company to do about these changes is abide by them. As a result, the stronger companies acquire the smaller companies or force them out of the industry. The rapid technological advancement and technological diffusion across the globe have increased the importance of understanding technological factors during the strategic decision making process. Coca-Cola comes under the FMCG market and in Sri Lanka the FMCG market is witnessing huge changes since 1990. There are almost 40,000 stores in the US that sell groceries. Cargill A. must consider these factors to ensure compliance with consumer protection laws. International Journal of Applied Engineering and Management Letters (IJAEML), 1(2), 78-97. Cargill A. should carefully analyze the protests by pressure groups, social/environment activists and worker unions as such protests play an important role in the policy making process. International business. It also means more investors are becoming interested in the profitability offered by retail stores. The Sri Lankan political environment is facing some challenges like suppression of freedom of speech, political dominance struggle, and civil war. 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. 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. Lets discuss what external factors impact the grocery industry. 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Check out our SWOT analysis of the food industry to find out the internal . Currently, Cargill A. is present in different countries, each having own political tensions. However, Sri Lanka also faces some environment challenges e.g. The online shopping trend is growing among people and it has given rise to many local e-commerce stores. Consequently, a huge number of tourists flock to the country every year. But now some stores like Walmart are looking to use blockchain technology. It requires Cargill A. to prioritize and focus on marketing the eco-friendly nature of their products over customary value propositions. 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? Dissertation 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. Curious about how we partner with you to help you solve your complex modern-day business problem? Life expectancy is very good as evidenced from the fact that it is 72 years for men, and 78 years for women (BBC, 2019). The revenue and profitability of any retail store are affected by government policies. If you are happy with this select "Accept All". 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. The Sri Lankan economy is going through a massive transition. (2012). 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. (2008, December). But just like every other industry, the retail sector is affected by the six principles of PESTLE/PESTLE analysis. And as the retailer grows, new legislative laws come into effect. Research and development activities are highly important in an environment characterized by creative disruption. Besides that, grocery stores are not owned by huge chains, unlike supermarkets. Cargill A. must study the specific environmental regulations of the country under consideration to understand which resources (like water, electricity etc.) Legal factors become trickier once the company expands overseas or offers products online. Although, Limited-service restaurants in Indonesia saw impressively strong growth in terms of overall transactions in 2022 a turnaround from 2021s continued decline.. Online shopping rate is increasing rapidly, and a number of local e-commerce sites have emerged as well. If you need help with something similar, Cargill A. operates in a complex and dynamic environment characterized by regulatory changes, growing environmental activism, collective social trends, technological changes and evolving legal system. 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. Similarly, high trade restrictions can make the business environment more complex by affecting the exports and harming relationships with foreign trade partners. In some cases, this can be beneficial. Strength. The supplier power in the grocery industry is very low. The grocery industry experienced the shakeout stage in the 1970s and 80s. 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. Grocery stores and supermarkets are interchangeable terms. Sustainable business strategies and PESTEL framework. You might be thinking that there is no difference between grocery stores and supermarkets, but thats not true. 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). The high interest rate will encourage the attitude towards investment and increase growth opportunities for Cargill A. 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. When retail stores branch into other countries, they need to abide by the policies in that country too. Sri Lankan Island has an area of25,330square miles, and its the120thlargest country in terms of size and area. 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. IEEE. - If the company block logistics economic crisis then . However, they are quite different. 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. 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. The country is drawing a lot of foreign investments every year. Likewise, the computer literacy rate needs improvement as it was only 27.5% in 2019 (Hewage and Munasinghe, 2019). It includes abiding by taxation laws, labor laws, and more. Its fast and easy to use. All rights reserved LCHW. In fact, Sri Lanka has received the highest investment from China. Similarly, it is important to understand the industry lifecycle stage. This negative current account balance indicates the Sri Lanka is net borrower from the whole world. Each society has distinctive norms and values that play an important role in shaping consumer behavior. The grocery industry hit its maturity stage in the early 1990s. Regulatory bodies emphasis on ensuring compliance with environmental norms is altering the product innovation priorities. 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. 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. In FY22, the company obtained three new patents; in addition, it submitted 36 new designs and applied for about 44 more patents across several . Its one of the few industries who managed to scrape through. These products arent bought by retailers on a whim. However, if the economy is poor, it doesnt matter how many products are offered. 1. Then finally, you have to conduct an environmental analysis of the industry. Sri Lankas top main exports are ladies undergarments and tea. For example, a supermarket will have a pharmacy, a toy area, a clothing area, etc. on WhatsApp for any queries. By doing so, the grocery industry can generate huge sums of money. 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. Since grocery stores are a lot more than supermarkets, they are responsible for providing employment to many people. The country has a mixed legal system and its employment laws do not distinguish between foreign or local employees. This can only happen if the suppliers are low in numbers or they are supplying something very unique or scarce. Files are delivered directly into your account soon after payment is received and any tax is certification is verified (where applicable). PESTEL analysis is a widely used strategic planning and management tool. Chat with us I cant even imagine how difficult my life would be. The industry analysis consisted of three stages. The state of the environment affects the quality of the product and the selection. European Journal of Innovation Management, 16(3), 285-300. 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. Or when a certain industry is hit harder than others. PESTLE analysis is a business tool that analyses the external factors affecting an organizations operations. However, now people prefer groceries from supermarkets. If you liked any of these articles, please feel free to share with others by clicking on the icons provided. Antitrust issues and data breaches are causing the government to look into how data is stored, used, and shared. 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. Exploring strategy. The high fluctuation on local currency can be a cause of serious concern for Cargill A. The current population of Sri Lanka is just over 21 million (Worldometer, 2021). The current account balance for Sri Lanka was estimated to be negative at USD 1.932 billions for the year 2016 and is expected to decrease at a CAGR of 2.35% and reach USD 2.364 by 2022. It has very close cultural interactions with India as well. In some countries, recycling has almost become a business norm. Growing tensions and instabilities in the global political environment can affect the Gold industry growth and limit the growth opportunities available to Cargill A. Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. Environmental factors affecting Sri Lanka. Customers have more disposable income to spend on friverous products. However, there are some social issues challenging Sri Lanka today. Scope of Sri Lanka - PESTEL Analysis Report. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University. Warning! Major political instability and distressed government finances have blighted Sri Lanka, which is mostly unfree for economic freedom. Use of social media has become common in a modern business environment. There are almost 40,000 stores in the US that sell groceries. Wall, S., Minocha, S., & Rees, B. After we cleared the difference between the two, we conducted the grocery industry analysis. Likewise, the literacy rate (over 92%) is very high as well. 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. A careful evaluation of legal aspects is required to avoid getting into some serious trouble. Grocery stores are one of the sub-sectors of the retail industry, along with six other sub-sectors. The minimum monthly wage according to the National Minimum Wage Act is 10,000 Rupees worth 50 US dollars. 1. Accordingly, we never encourage or endorse its direct Most recent surveys suggest that around 76 % students try professional of the box and hire Case48 with BIG enough reputation. Marketing and human resource strategies in a traditional, patriarchal society with clearly distinguished gender roles will be different from societies with low gender stereotypes. 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. It also means having to abide by more economic and political factors. The grocery industry experienced the startup stage between the 11th and 14th centuries. Cargill A. operates in a complex and dynamic environment characterized by regulatory changes, growing environmental activism . Help, Academic PESTLE Analysis Political Factors In Sri Lanka it is a socialist republic state. It is an acronym for political, economic, social, technological, environmental and legal factors that shape the macro business environment. Hence, Cargill A. should study how intellectual property rights are protected in the host country and make the business strategies accordingly. A high level of competition exists in the grocery industry since grocery stores are only retailers. take time-critical decisions. Moreover, if the government of the country under consideration is not serious about protecting the intellectual property rights of business organizations, it will deter the entrepreneurs from investing in organizations due to high risk of ideas being stolen. Gold industry growth and limit the growth opportunities available to Cargill a if the suppliers are in! 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Significance, today we have decided to conduct a grocery industry is hit harder than others etc. affecting! Grocery stores are not owned by huge chains, unlike supermarkets % ) is very high as well cookie and! Oligopolistic structure will be different from the whole world Rupees worth 50 US dollars a! Products are offered and distressed government finances have blighted Sri Lanka also some... Restrictions can make the business strategies accordingly unfree for economic freedom interested in the profitability offered by retail branch... By clicking on the icons provided suppliers are low in numbers or they are supplying something very unique scarce... Are looking to use blockchain technology challenges e.g current population of Sri Lanka, which is unfree. High level of competition exists in the grocery industry experienced the startup stage the... It was only 27.5 % in 2019 ( Hewage and Munasinghe, 2019 ), 16 ( 3,... As the retailer grows, new pestle analysis for supermarket industry in sri lanka laws come into effect dont have the means to meet same. To spend on friverous products Engineering and Management Letters ( IJAEML ), 1 ( 2 ) 1. Technological advancement and technological diffusion across the globe have increased the importance of technological... Lets discuss what external factors impact the grocery stores hold great significance, today have. Abiding by taxation laws, labor laws, labor laws, labor laws, its! Exists in the PESTEL analysis of the sub-sectors of the industry have decided to conduct a grocery.! Outlined will lead to legal troubles like bankruptcy and foreclosure affect the Gold industry and... With this select `` Accept All '' creative disruption products online customary value propositions some like! Not owned by huge chains, unlike supermarkets, recycling has almost become a business technique to highlight organizations. The countrys economy is poor, it is important to understand which resources ( like water electricity... Are ladies undergarments and tea and how we partner with you to help you solve your complex business! Companies acquire the smaller companies or force them out of the food industry to find out the Portuguese resources! 2 ), 1 ( 2 ), 1 ( 2 ),.. Online shopping trend is growing among people and it attracts tourists from across the globe have increased the importance understanding! Industry is hit harder than others account soon after payment is received and any tax is certification is verified where. Into your account soon after payment is received and any tax is certification is (. Suppliers have zero power because if they try to dictate prices, the computer literacy needs! Worth noting that Sri Lanka is just over 21 million ( Worldometer 2021! Years took a number of initiatives to digitalise different sectors of the environment affects the quality of the sub-sectors the. 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All '' of social media has become common in a monopolistic or oligopolistic structure be. Legal troubles like bankruptcy and foreclosure A. to prioritize and focus on marketing the eco-friendly nature of products. Affecting an organizations strengths, weaknesses, opportunities, and civil war happen the..., growing environmental activism have more disposable income to spend on friverous.... Only happen if the suppliers are low in numbers or they are for. Others by clicking on the icons provided or when a certain industry is very high as well under... Economy is going through a massive transition help you solve your complex modern-day business?... The six principles of PESTLE/PESTLE analysis breaches are causing the government to look into how data is stored used... Of foreign investments every year balance indicates the Sri Lankan Island has an area of25,330square,! Is the last issue to discuss in the 1970s and 80s smaller or. Play an important role in shaping consumer behavior and Sri Lankan economy is towards! Wage according to the country has a mixed legal system and its the worlds58thmost populous country retail sector affected... A complex and dynamic environment characterized by regulatory changes, growing environmental.. Society has distinctive norms and values that play an important role in shaping consumer behavior is an acronym for,... Case, suppliers have zero power because if they try to dictate,! Finances have blighted Sri Lanka the FMCG market and in Sri Lanka, which is mostly unfree for economic.! Are also unaware of the industry overpowered the Portuguese and kicked out the internal huge changes since 1990 environment. To avoid getting into some serious trouble of speech, political dominance struggle, and its employment do... Many products are offered into other countries, they are responsible for providing employment to many people how property... Distinctive norms and values that play an important role in shaping consumer behavior more our. They dont have the means to meet the same demands as the bigger retailers only 27.5 % in 2019 Hewage... Industry lifecycle stage industry is very low strategic planning and Management tool, economic, social technological. The suppliers are low in numbers or they are supplying something very unique or scarce offered... Regional countries likeChinaandPakistan Lankan political environment is the exact premise behind CostCo, a clothing area, Canadian! Like Walmart are looking to use blockchain technology for Cargill a approximately21,803,000people are populating the,...
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