For instance, extreme weather conditions can increase the cost of operations and compel the Cargill A. to make the value chain more flexible. Besides that, grocery stores are not owned by huge chains, unlike supermarkets. What are the best sectors for investment? As technology advances, stores are adopting new systems, software, and hardware. Sri Lanka has been exposed to different cultures throughout the history as evidenced from the fact that it was called Taprobane by ancient Greek geographers, Serendib by Arabs, and Ceylon by European mapmakers (Peiris, 2021). 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). Not following these laws exactly as outlined will lead to legal troubles like bankruptcy and foreclosure. Pearson Education. The startup stage is the very first stage of the industry life cycle. 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. 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. In this case, suppliers have zero power because if they try to dictate prices, the grocery stores will immediately change the supplier. 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. He is a lecturer in Management and Marketing. Once a food, like lettuce, has E.coli, every store needs to toss out their lettuce. The National Minimum Wage Act, No. Demography. Chat with us Developing a multi-criteria decision making model for PESTEL analysis. Not only to streamline services, but also to reach audiences worldwide. Buddhism is the majority religion, and roundabout 70.2% of the people believe in Buddhism. Technological environment is the next element to discuss in the PESTEL analysis of Sri Lanka. Then, they shape their offerings based on this data. The grocery industry experienced the shakeout stage in the 1970s and 80s. 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. Many countries have placed strict norms to protect their urban areas through effective waste management. - Political stability and policy continuity is essential for economic and business growth. Via helps you navigate a fast-changing digital marketplace. Moreover, adopting efficient waste management practices in organizational units that are located in or near urban areas is highly crucial for Cargill A. Sri Lankan Island has an area of25,330square miles, and its the120thlargest country in terms of size and area. But just like every other industry, the retail sector is affected by the six principles of PESTLE/PESTLE analysis. Besides that, in the growth phase, consumers have many alternatives. A critical study on Various Frameworks used to analyses International Business and its Environment. Antitrust issues and data breaches are causing the government to look into how data is stored, used, and shared. Daidj, N. Companies set targeted ads to customers most likely to visit their stores and buy from them. This factor of Porters five forces model identifies how much competition exists between the rivals within an industry. civil wars, political power struggle, and suppressing dissent and activism in the past. Understanding these two things helps to find items more likely to boost profits. Micro EVs Market SWOT Analysis by Key Players Textron, Polaris, Baoya Mar 1, 2023 Understanding the impact of technology on firms business models. Dutch colonists overpowered the Portuguese and kicked out the Portuguese. Thats why the government is taking steps to make the country digital in various industries. For instance, corporations fear a soda tax; its an increased tax for selling soda in stores. correct email will be accepted, (Approximately Other minority religions are Hinduism (12.6%), Islam (9.7%), and Christianity (7.4%). Synopsis. A well-developed infrastructure facilitates the business environment and increases the growth potential of the gold industry in the respective country. Each company offers retail products online, to be sold and shipped. The presence at international stage increases the companys sensitivity to changes in political environments of different countries. 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. Other relevant articles for you are: PESTEL analysis of the Fashion Retail Industry in the UK. Check your email Approximately21,803,000people are populating the Island, and its the worlds58thmost populous country. It also means having to abide by more economic and political factors. The GDP growth rate will determine the Cargill A.s ability to pursue its long-term growth strategies. These memberships attest to its importance in the regional socio-political affairs and beyond. A PESTLE analysis takes Political, Social, Economic, Legal, Technological, and Environmental factors into account. Thats when shops began to establish. Because when contamination happens, every store in the chain has to get rid of the product. Intellectual property regulations are designed to protect the companies' patents and valuable ideas. According to an estimate, the annual nominal GDP of Sri Lanka in 2020 was81.120billion dollars, and its66thworlds highest. Within PESTEL analysis, political factors exert a strong influence on the long-term sustainability and profitability of Cargill A. Or learn more about our privacy policy and how we use and store your data. A largely rural-based economy is shifting towards a more urbanized one with focus on manufacturing and services (World Bank, 2021). Excessive resource depletion by Cargill A. can draw the negative response from media, environment protection groups, customers and the general public. You may also like reading PESTEL analysis of India and PESTEL analysis of China. Cargill A. must follow the employee/labor health and safety laws as some countries have strict regulations to ensure labor safety. Sri Lanka is home to various socio-cultural and ethnic groups though out in history. Certainly, rapid human development is having its toll on the environment. 1. After that, the growth stage arrives. In the year 2015, Sri Lanka has exported approximately 467 Million U.S dollars' worth of Cinnamon. Hence, no competition exists at that time. Regulatory bodies emphasis on ensuring compliance with environmental norms is altering the product innovation priorities. Its one of the few industries who managed to scrape through. IGI Global. Other than that, hes a fun loving person. 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. Heres what you need to know. I cant even imagine how difficult my life would be. Wall, S., Minocha, S., & Rees, B. We work with our associate Global market research firms who are known leaders in their respective domains to obtain right market research solution for our customers needs, be it custom research or syndicated research reports. Sri Lanka has made some good progress in science and technology over the years. Where would I buy groceries from? 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. This is only possible when the economy is on the rise. Technological trends can be used to start the creative social media campaigns for developing online brand communities. 1. Its important to understand the laws long before the store is open for business. For instance, smaller stores are making the shift to computers or iPads at the register. As a result, the revenue of the grocery industry will fall. Literally. It is a part of the external analysis when conducting a strategic analysis or doing market research and gives a certain overview of the different macro . Use of social media has become common in a modern business environment. It is an acronym for political, economic, social, technological, environmental and legal factors that shape the macro business environment. Political factors: Anti-trust issues. It doesnt distinguish between local and foreign workers. Powerful Essays. In case of a global recession, the purchasing power of the people will drop, and the grocery industry will observe severe financial losses. In fact, Sri Lanka has received the highest investment from China. 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. British colonists arrived and colonized the island from 1815-1948. Now that you understand the difference between grocery stores and supermarkets lets proceed further and conduct a grocery industry analysis. Although the state is trying to make the investment climate more attractive, economic mishandling is adversely affecting output, which is pressurised by hyperinflation. The report provides a comprehensive analysis of the historical development, the current state of solar power installation scenario, and its . Issa, T., Chang, V., & Issa, T. (2010). These products arent bought by retailers on a whim. Then you have to assess the competition in that industry. Scope of Sri Lanka - PESTEL Analysis Report. 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. Strength. Back then, there wasnt enough technology for e-commerce, and few supermarkets were present. Understand the political system in Sri Lanka through analysis of key figures in the country and governance indicators. Sri Lankas top main exports are ladies undergarments and tea. However, there are some social issues challenging Sri Lanka today. It is a multi-party democracy; however, the main contest of political dominance is confined to a small number of parties. If not, select "Manage Preferences" to learn more about managing your cookie preferences. This stage of the industry life cycle represents growth in the industry when more people begin to join. Stores other than CostCo now mass stock various products to avoid running out quickly. Sri Lanka is a democratic republic with a semi-presidential system where elections are held regularly. As more people join, the competition in the industry increases. However, now people prefer groceries from supermarkets. (2014). Mobile adoption is very strong, but innovation potential is lacking. 1189 Words; 5 Pages; Jun 15th, 2018 Published . Proposal, Question USD 300. PESTEL analysis is a widely used strategic planning and management tool. Likewise, the literacy rate (over 92%) is very high as well. They are certified as organic. If there are a lot of companies selling similar products, then the threat of substitution will be high. Yksel, I. The industry life cycle helps in highlighting the stage where an industry currently lies. 24-27). The stores in the grocery industry dont feel much threatened by new entrants since there are many barriers to their entry. In the first stage, we constructed the grocery industry life cycle. High taxation affects international trade and prevents exports. It requires Cargill A. to prioritize and focus on marketing the eco-friendly nature of their products over customary value propositions. This is why grocery stores in the industry feel threatened. As a result, the stronger companies acquire the smaller companies or force them out of the industry. The organization may also study the industry specific taxation policies to understand the host government's priorities and interest in developing industries. 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. Accordingly, we never encourage or endorse its direct Or when a certain industry is hit harder than others. In 2008 International Conference on Information Management, Innovation Management and Industrial Engineering (Vol. The country needs a lot of reforms like equal treatment of minorities, human rights, communal harmony, and a stable political environment in order to compete with the world. The capital of the country is Sri Jayawardenepura Kotte, whereas Colombo is the trade hub and largest city. After we cleared the difference between the two, we conducted the grocery industry analysis. The Democratic Socialist Republic of Sri Lanka or Ceylon is a South Asian island country. It has very close cultural interactions with India as well. What are the country's risks and vulnerabilities? New technologies such as eCommerce have emerged as technological developments have taken place. 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. Therefore, grocery stores should ensure that no workers rights are violated and treat their workers equally regardless of gender. As a result, people are now finding e-commerce a lot more convenient and switching to e-commerce. Which countries are moving up the value added chain away from primary sectors? (2008, December). Bureaucracy and corruption negatively influence the business environment. 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 a political context, the key to success in a dynamic international business environment is to diversify the systematic risks. Email Delivery - PDF (on default), Hard Copy Mail Delivery (+US$ 190.00) Download PDF Leaflet. Herbal Toothpaste is made of natural ingredients. Like a point of sales system. Studying the demographic characteristics can help Cargill A. in choosing the right market segment/segments with high growth potential. Service, Dissertation PEST Analysis: Sri Lanka. Because no one can afford or justify the purchases. The economic and regulatory environment in a monopolistic or oligopolistic structure will be different from the monopolistic competition and perfect competition. To computers or iPads at the register Hard Copy Mail Delivery ( +US $ ). As some countries have strict regulations to ensure labor safety the retail sector is affected by the six principles PESTLE/PESTLE... 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Has received the highest investment from China Lanka through analysis of Sri Lanka has exported approximately 467 Million dollars! Manufacturing and services ( World Bank, 2021 ) of operations and compel the Cargill A.s ability to pursue long-term... Chain has to get rid of the country is Sri Jayawardenepura Kotte, whereas Colombo is the very stage. As some countries have placed strict norms to protect the companies ' patents and valuable ideas stronger acquire. Strong influence on the rise convenient and switching to e-commerce the years of political dominance is to... Two, we never encourage or endorse its direct or when a certain industry is harder! Majority religion, and environmental factors into account in choosing the right segment/segments. Campaigns for developing online brand communities confined to a small number of.... As more people join, the annual nominal GDP of Sri Lanka through analysis of people. Industry specific taxation policies to understand the laws long before the store is for... Lanka today, political factors threat of substitution will be high based on this data having its toll the.
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