These regulations impact the economy, consumer buying habits, and international trade laws. Our site uses cookies to improve functionality. Sustainable business strategies and PESTEL framework. 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. A careful evaluation of legal aspects is required to avoid getting into some serious trouble. 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. PESTLE analysis is a business tool that analyses the external factors affecting an organizations operations. European Journal of Innovation Management, 16(3), 285-300. We are here to help. As well as cash registers to manage money after a sale. Sri Lanka is one of the worlds beautiful countries and it attracts tourists from across the world. Other minority religions are Hinduism (12.6%), Islam (9.7%), and Christianity (7.4%). As a result, the stronger companies acquire the smaller companies or force them out of the industry. 5 Market Analysis 5.1 Regulatory Scenario . and cannot be used for research or reference purposes. However, they are quite different. Understanding these two things helps to find items more likely to boost profits. 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. Incomes could face challenges in the short term, whilst poverty is set to rise, but the middle class is growing longer term. The grocery industry currently seems to be in a decline stage since now the demand for the grocery industry has fallen as people have different alternatives such as e-stores and supermarkets. Because we just dont know. 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. Weve seen shifts in how eCommerce retail leaders operate over the last few years. PESTEL analysis is a widely used strategic planning and management tool. 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. 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 exports it toItaly,Germany, India,UK, and theUSA. Grocery stores are afraid to get substituted since a huge number of homogeneous stores exist that offer the same products. As the population is increasing over the years, the grocery industrys customer base increases if they can attract new customers. These steps can help you get back, Copyright 2020 Weberience LLC. 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. inspiration, guidance, and understanding. Growing tensions and instabilities in the global political environment can affect the Gold industry growth and limit the growth opportunities available to Cargill A. Likewise, communal tensions and discrimination due to low caste system also need to be addressed. 1,143 Trillion . Aug-22-2018. The Sri Lankan economy is going through a massive . After the growth stage, an industry undergoes the shakeout stage. We hope the article PESTEL analysis of Sri Lanka has been useful. Then the international laws come into play. 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? But just like every other industry, the retail sector is affected by the six principles of PESTLE/PESTLE analysis. These products arent bought by retailers on a whim. 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. Changes in weather and climatic conditions can influence business efficiency. Grocery stores are one of the sub-sectors of the retail industry, along with six other sub-sectors. This helps the grocery industry generate high revenue. According to the World Bank (cited in Trading Economics, 2021), the GDP of Sri Lanka was worth around $84 billion in 2019. Consumers prefer the natural toothpastes to the synthetic, artificial flavored toothpaste that is commonly found. The country has multiple democratic parties. Each society has distinctive norms and values that play an important role in shaping consumer behavior. 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. Studying the demographic characteristics can help Cargill A. in choosing the right market segment/segments with high growth potential. (2008, December). However, suppose you dont have enough time to wander in a 20-aisle supermarket. 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). 2. Cargill A. must consider these factors to ensure compliance with consumer protection laws. Sri Lankas top main exports are ladies undergarments and tea. Sri Lanka is a democratic republic with a semi-presidential system where elections are held regularly. Buyer power is similar to supplier power. In fact, Sri Lanka is one of the biggest receivers of Chinese FDI. However, Sri Lanka also faces some environment challenges e.g. The products are either shipped to the customers home or the closest store for pickup. Yksel, I. Hou, J., Lu, Q., & Han, Y. This report coversSri Lanka's PESTEL (political, economic, social, technological, environmental and legal) analysis. But it needs a lot of investment and tech acceleration. PESTEL Analysis of Royal Ceramics Lanka PLC Political - The . . The retail industry was able to hold itself up even during the recession. Choosing the vision, mission and the reason of existence for Sri Lanka. It is a multi-party democracy; however, the main contest of political dominance is confined to a small number of parties. However, when there is political chaos, it deters the investors and harms the stakeholders' trust in economic and consequent organizational performance. Access and download reports and data purchased through Euromonitor.com. This article is only an example So lets quickly carry out the grocery industry SWOT analysis to see what internal and external factors impact the grocery industry. Revista ESPACIOS, 39(16). Economic factors affecting Sri Lanka. This change in consumer behavior impacts the grocery industry negatively. With the help of this tool, companies decide if they should enter an industry. Where would I buy groceries from? Customers have more disposable income to spend on friverous products. Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. Pestle analysis of Sri Lanka. Major political instability and distressed government finances have blighted Sri Lanka, which is mostly unfree for economic freedom. Organizational culture derives strong influence from the societal norms, values and trends. All Rights Reserved, more than 26,000 are simple grocery stores, Assessing the Competition: Porters Five Forces Model, 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. There are almost 40,000 stores in the US that sell groceries. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. P. - John Keells are known as the influential people. High GDP also signals the consumers ability to spend more on offered products. 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. Developing international strategies. The marketing department of Cargill A. can use the information retrieved from social, environmental analysis to target the consumer groups and increase the appeal of offered products to potential buyers. The industry life cycle helps in highlighting the stage where an industry currently lies. 1, pp. Moreover, considering the development and maturity level of technology in the respective market is also important. But just like every other industry, the retail sector is affected by the six principles of PESTLE/PESTLE analysis. 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 Its one of the few industries who managed to scrape through. Legal environment is the last issue to discuss in the PESTEL analysis of Sri Lanka. Pearson Education. We also cant forget about environmental issues inside of the stores either. In this industry, buyers set prices because they are sensitive to prices. In the early days, people preferred buying groceries from grocery stores. Each country must abide by their political regulations. The growing environmental consciousness and changing climatic conditions have made environmental analysis an important part of the PESTEL analysis. Check out our SWOT analysis of the food industry to find out the internal . Cargill A. must follow the employee/labor health and safety laws as some countries have strict regulations to ensure labor safety. 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. Hence all the suppliers have identical products. Buddhism is the majority religion, and roundabout 70.2% of the people believe in Buddhism. Its standard for any store. Posted by Zander Henry on Therefore, if there is high inflation, people will be reluctant to buy more. Legal is the sixth factor of PESTEL analysis. But even smaller shops can benefit from offering discounts and sales on products. The economic and regulatory environment in a monopolistic or oligopolistic structure will be different from the monopolistic competition and perfect competition. As a result, people are now finding e-commerce a lot more convenient and switching to e-commerce. Political stability creates economic growth, due to which the disposable income of consumers increases. Consequently, a huge number of tourists flock to the country every year. Detailed environmental analysis is imperative before deciding to enter a new market or start a new product line. Its not only physical retail stores under scrutiny. submission, reproduction, or any other misuse in any manner. The government regularly organizes elections among a limited number of political parties, and the majority vote holding party comes to dominance. November 2022. There is a growing trend towards the use of green/eco-friendly products. (2014). The growing inequality in many countries is altering the power structure, which has serious implications for international business organizations like Cargill A. Cargill A. need to study the traditionally assigned gender roles to align its marketing and communication practices accordingly. Porters five forces model helps analyze the competition level in an industry. Herbal Toothpaste is made of natural ingredients. The application of PESTEL analysis can help Cargill A. identify the major external environmental forces that shape the strategy and competitive landscape and support its strategic decision making process. But if the countrys political parties are fickle, it can easily turn into a problem. 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. Retail stores use a variety of technology everyday. (Ed.). 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. 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. Most companies have a business website. At Market Research Reports, Inc. we aim to make it easier for decision makers to find relevant information and locate right market research reports which can save their time and assist in what they do best, i.e. The grocery stores are smaller in size and offer limited products, of which almost 90% are food related. Now that you understand the difference between grocery stores and supermarkets lets proceed further and conduct a grocery industry analysis. Cargill A. should consider the following legal factors when exploring a new market. With the help of technology, retail is one of those industries that can survive post-economic destruction. As a result, the revenue of the grocery industry will fall. Thats when shops began to establish. The health and efficiency of financial markets will determine Cargill A.s ability to raise the capital at fair prices. - As Ceylon modernized, becoming the Republic of Sri Lanka in 1972, social and political change helped drive JK's expansion and diversification. The power distance within any society shows the acceptance of hierarchy and income inequality. Inability to protect intellectual property rights can result in losing competitive advantage, which may weaken the positioning of Cargill A. against other market players. Social factors: Buying in bulk and collecting endless data. Copyright 2017 2025. British colonists arrived and colonized the island from 1815-1948. Via helps you navigate a fast-changing digital marketplace. The business practices of the Cargill A. are influenced by the prevailing economic structure. Out of these 40,000 stores, more than 26,000 are simple grocery stores. Follow this link to learn more about our cookie policy and how we use cookies. It also maintains good foreign relations with powerful neighbours such as China and Pakistan. Total Sri Lankan oral care market share is approximately Rs. Back then, there wasnt enough technology for e-commerce, and few supermarkets were present. 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. At this point, the industrys growth rate decreases since it is already operating at its full potential. Is mostly unfree for economic freedom habits, and few supermarkets were.. If they should enter an industry currently lies, 16 ( 3 ), 285-300 have! The sub-sectors of the people believe in buddhism at this point, industrys. - John Keells are known as the population is increasing over the years, the stronger acquire... After the growth stage, an industry currently lies Royal Ceramics Lanka PLC political - the substituted since a number... 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