pestle analysis for supermarket industry in sri lanka

It doesnt distinguish between local and foreign workers. 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. Over the years, the trends have changed. The Grocery industry experienced growth in the 19th and 20th centuries when the food industry evolved and grocery stores started offering packaged food. 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. The GDP growth rate will determine the Cargill A.s ability to pursue its long-term growth strategies. Pestle analysis of Sri Lanka. Now that you know what an industry analysis is, lets move ahead and carry out the 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.. Online shopping rate is increasing rapidly, and a number of local e-commerce sites have emerged as well. Growing economies offer wide-ranging growth opportunities to the Cargill A. Scope of Sri Lanka - PESTEL Analysis Report. Rather than spending weeks trying to locate where the contamination started. Literally. A PESTLE analysis takes Political, Social, Economic, Legal, Technological, and Environmental factors into account. This repels customers. Here's what you need to know. Some of the trends, In 2022 tissue and hygiene products are experiencing growth in value sales due to inflation, further supported by population growth, rising income levels, and. Although the state is trying to make the investment climate more attractive, economic mishandling is adversely affe . All retail stores need to meet the environmental requirements for consumer and employee 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. Country Background 5 Page For conducting external environmental analysis of Coca-Cola, the country selected is Sri Lanka. After that, the growth stage arrives. The retail industry is everywhere. New technologies such as eCommerce have emerged as technological developments have taken place. He holds an MSc in Tourism & Hospitality from the University of Sunderland. The grocery industry experienced the startup stage between the 11th and 14th centuries. Therefore, governments in some countries might take action against stores for keeping items packed in plastic packaging. Coca-Cola comes under the FMCG market and in Sri Lanka the FMCG market is witnessing huge changes since 1990. 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. What are the country's risks and vulnerabilities? The Democratic Socialist Republic of Sri Lanka or Ceylon is a South Asian island country. In some countries, recycling has almost become a business norm. It also means more investors are becoming interested in the profitability offered by retail stores. These conditions are often standard. As well as cash registers to manage money after a sale. This is costly for the companies. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Aug-22-2018. Cargill A. can leverage the opportunities offered by social media marketing to improve business performance. Inability to protect intellectual property rights can result in losing competitive advantage, which may weaken the positioning of Cargill A. against other market players. But if the countrys political parties are fickle, it can easily turn into a problem. Technological trends can be used to start the creative social media campaigns for developing online brand communities. Strategy. The Latest Released Micro EVs market study has evaluated the future growth potential of Global Micro EVs market and provides information and useful stats on market structure and size. Its fast and easy to use. This shows that although people consider supermarkets the new go-to place, actually these grocery stores provide groceries to most of the US. 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. And should a problem arise, Walmart could find the source immediately. If not, select "Manage Preferences" to learn more about managing your cookie preferences. Buyer power is similar to supplier power. Each country must abide by their political regulations. Technological factors affecting Sri Lanka. Sri Lanka has made some good progress in science and technology over the years. Financial Times Prentice Hall. A retail store needs to meet legislative conditions before opening the shop. They use market research to identify buying trends and shifts in consumer behavior. All consumers love a good deal. The state of the environment affects the quality of the product and the selection. 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. Entering in mature industries can be more challenging due to market saturation than industries at the growth stage. It is important for Cargill A. to study the current trends in the country's political scenario as changes in government may alter the government's priorities towards the development of different industries. Cargill A. can enter in low taxation markets and benefit from high profits that can be invested in research and development activities. According to an estimate, the computer literacy of Sri Lanka is roundabout30.1%, and its very low. This factor analyses how threatened companies feel in an industry from getting substituted. Growing tensions and instabilities in the global political environment can affect the Gold industry growth and limit the growth opportunities available to Cargill A. Posted by Zander Henry on Now that we are done discussing the life cycle of the grocery industry lets proceed to the second step of the Industry analysis to see the level of competition that exists in the industry with the help of Porters five forces model. Or learn more about our privacy policy and how we use and store your data. The retail industry was able to hold itself up even during the recession. Buddhism is the majority religion, and roundabout70.2%of the people believe in Buddhism. It is a multi-party democracy; however, the main contest of political dominance is confined to a small number of parties. Social factors: Buying in bulk and collecting endless data. We are here to help. Customers have more disposable income to spend on friverous products. Daidj, N. Then, they shape their offerings based on this data. Surely, it needs to work on political stability, and reforms. Each company offers retail products online, to be sold and shipped. As more people join, the competition in the industry increases. Then, an industry goes through the shakeout stage. 1, pp. Its a never-ending process. Cargill A. cannot enter a new market without studying in detail the legal environment and regulatory structure of the new consumer market. The first task we had was to do a PESTEL analysis of our home-country that we were in charge of. This investment will also increase stakeholder satisfaction and expand the customer base due to enhanced brand image. Sri Lanka should accelerate its growth in the tech industry if the country wants to develop. 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). Some examples of environmental factors that Cargill A. need to consider are given below. Regulatory bodies emphasis on ensuring compliance with environmental norms is altering the product innovation priorities. But just like every other industry, the retail sector is affected by the six principles of PESTLE/PESTLE analysis. The products are either shipped to the customers home or the closest store for pickup. High unemployment signals the availability of surplus labor at comparatively lower wages. Ignorance in this regard can cause undesired circumstances for Cargill A., such as- hurting competitive advantage as a result of intellectual property rights violation and harmed organizational image due to violation of consumer/employee/environment protection standards. Economic. 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. 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. PESTEL analysis is critical to understand the external threats & opportunities arising because of the macro . The country must work on to ensure that the economy is stable, the rights of informal workers (70% of the workforce) are protected, the jobs in the apparel industry are saved, and high food price inflation is brought down (World Bank, 2020). There are almost 40,000 stores in the US that sell groceries. 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. inspiration, guidance, and understanding. Industry analysis provides complete insight into an industry. However, Sri Lanka also faces some environment challenges e.g. In 2008 International Conference on Information Management, Innovation Management and Industrial Engineering (Vol. International business. Moreover, people are also unaware of the industry at this time, so companies try hard to attract customers. Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. Andr Cavalcante, S. (2013). Back then, there wasnt enough technology for e-commerce, and few supermarkets were present. Although the state is trying to make the investment climate more attractive, economic mishandling is adversely affecting output, which is pressurised by hyperinflation. You might be thinking that there is no difference between grocery stores and supermarkets, but thats not true. As Cargill A. looks to expand and leverage its competencies and core capabilities, conducting the PESTEL analysis is imperative for developing effective strategies and achieving long-term growth objectives. A recommendation is that the company's strategies must include the external factor of rising health consciousness among consumers. In some cases, this can be beneficial. At this stage, the industry is booming and has reached its peak. (2018). International Journal of Business and Management, 7(24), 52. I cant even imagine how difficult my life would be. It also means having to abide by more economic and political factors. In a political context, the key to success in a dynamic international business environment is to diversify the systematic risks. Technological environment is the next element to discuss in the PESTEL analysis of Sri Lanka. Cargill A. must follow the employee/labor health and safety laws as some countries have strict regulations to ensure labor safety. 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. 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. Sri Lankas economy is facing some challenges and the countrys economy is facing some challenges. Hence all the suppliers have identical products. Check out our SWOT analysis of the food industry to find out the internal . Developing a multi-criteria decision making model for PESTEL analysis. 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). For instance, smaller stores are making the shift to computers or iPads at the register. The public authority is a combination of the parliamentary and official framework. It requires Cargill A. to prioritize and focus on marketing the eco-friendly nature of their products over customary value propositions. 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. 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. A careful evaluation of legal aspects is required to avoid getting into some serious trouble. Synopsis. Stores other than CostCo now mass stock various products to avoid running out quickly. Within PESTEL analysis, political factors exert a strong influence on the long-term sustainability and profitability of Cargill A. 11.12 Sri Lanka 11.13 Thailand Now that you understand the difference between grocery stores and supermarkets lets proceed further and conduct a grocery industry analysis. Copyright 2017 2025. Cargill A. should consider the following legal factors when exploring a new market. Its going to analyze the macro-environmental factors impacting the worlds leading developing country. These steps can help you get back, Copyright 2020 Weberience LLC. The organization may also study the industry specific taxation policies to understand the host government's priorities and interest in developing industries. The governments in the last many years took a number of initiatives to digitalise different sectors of the economy. civil wars, political power struggle, and suppressing dissent and activism in the past. The threat of substitution is really high in the grocery industry. The current population of Sri Lanka is just over 21 million (Worldometer, 2021). 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). British colonists arrived and colonized the island from 1815-1948. 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. Political stability will . 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. (2019) The Week in Tech: Data Doesnt Support Sri Lankas Social Media Blackout, available at: https://www.nytimes.com/2019/04/26/technology/sri-lanka-social-media.html (accessed 01 March 2021), Hewage, K. and Munasinghe, D. (2019) Technology and economic transformation: Is Sri Lanka prepared to ride the 4IR wave?, available at: http://www.ft.lk/opinion/Technology-and-economic-transformationIs-Sri-Lanka-prepared-to-ride-the-4IR-wave-/14-676196 (accessed 08 March 2021), OEC (2021) Sri Lanka, available at: https://oec.world/en/profile/country/lka (accessed 07 March 2021), Peiris, G. (2021) Sri Lanka, available at: https://www.britannica.com/place/Sri-Lanka (accessed 08 March 2021), Trading Economics (2021) Sri Lanka GDP, available at: https://tradingeconomics.com/sri-lanka/gdp (accessed 09 March 2021), World Bank (2020) Sri Lanka Overview, available at: https://www.worldbank.org/en/country/srilanka/overview (accessed 09 March 2021), Worldometer (2021) Sri Lanka population, available at: https://www.worldometers.info/world-population/sri-lanka-population/ (accessed 09 March 2021). The Sri Lankan economy is going through a massive . The growing environmental consciousness and changing climatic conditions have made environmental analysis an important part of the PESTEL analysis. The environmental standards, laws and regulations vary across different markets. The business and marketing strategies are also influenced by migration. Cargill A. must study and predict the labor market conditions to understand how it can attract talented workers and leverage their skills to improve business performance. 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. But now some stores like Walmart are looking to use blockchain technology. The business practices of the Cargill A. are influenced by the prevailing economic structure. 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. If you have BIG dreams to score BIG, think out Not following these laws exactly as outlined will lead to legal troubles like bankruptcy and foreclosure. Because when contamination happens, every store in the chain has to get rid of the product. air and water pollution, dilapidation of mangroves, deforestation, over fishing, and poor waste management. However, now people prefer groceries from supermarkets. A., & Gomez, o. 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. Then you have to assess the competition in that industry. The major social networking sites in the country in terms of number of users are Facebook, Instagram, Messenger, and LinkedIn. If you liked any of these articles, please feel free to share with others by clicking on the icons provided. Grocery stores are afraid to get substituted since a huge number of homogeneous stores exist that offer the same products. The sales of grocery stores depend upon inflation directly. 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? For example, a supermarket will have a pharmacy, a toy area, a clothing area, etc. 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. 2. They can easily see which products people are buying, leaning towards, or completely ignoring. 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. 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. When retail stores branch into other countries, they need to abide by the policies in that country too. Technological innovations like this can bring major transformations in the industry and reset the success rules for market players. The Sri Lankan economy is going through a massive transition. 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 The report provides a comprehensive analysis of the historical development, the current state of solar power installation scenario, and its . Therefore, grocery stores and supermarkets may sound like synonyms. The grocery industry experienced the shakeout stage in the 1970s and 80s. correct email will be accepted, (Approximately Which countries are moving up the value added chain away from primary sectors? Integrity, Essay Writing (2008, December). The report . (2009). Every industry has a different buyer power. The maturity stage leads to the decline stage. But even smaller shops can benefit from offering discounts and sales on products. Consequently, a huge number of tourists flock to the country every year. 5 Market Analysis 5.1 Regulatory Scenario . Studying and forecasting the consumers purchasing power based on relevant economic indicators is important to analyze the customers interests and spending patterns. Major political instability and distressed government finances have blighted Sri Lanka, which is 'mostly unfree' for economic freedom. Likewise, the computer literacy rate needs improvement as it was only 27.5% in 2019 (Hewage and Munasinghe, 2019). The competition in this market is increasing and the small and local players are facing difficulties in survival. The growing use of mobile phones and social networking sites must be considered when developing marketing and communication strategies. However, if the economy is poor, it doesnt matter how many products are offered. Weve seen shifts in how eCommerce retail leaders operate over the last few years. Because we just dont know. Not only to streamline services, but also to reach audiences worldwide. Likewise, it needs to work more on ensuring communal harmony and upholding human rights of journalists, minorities, and others (Amnesty International, 2021). 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. Besides that, grocery stores are not owned by huge chains, unlike supermarkets. Chat with us Hence, Cargill A. should study how intellectual property rights are protected in the host country and make the business strategies accordingly. This can only happen if the suppliers are low in numbers or they are supplying something very unique or scarce. The economic and regulatory environment in a monopolistic or oligopolistic structure will be different from the monopolistic competition and perfect competition. Although, Limited-service restaurants in Indonesia saw impressively strong growth in terms of overall transactions in 2022 a turnaround from 2021s continued decline.. For instance, corporations fear a soda tax; its an increased tax for selling soda in stores. Economic factors affecting Sri Lanka. This is only possible when the economy is on the rise. As a result, the revenue of the grocery industry will fall. It has very close cultural interactions with India as well. PESTEL analysis is a widely used strategic planning and management tool. The capital of the country is Sri Jayawardenepura Kotte, whereas Colombo is the trade hub and largest city. Sri Lankas top main exports are ladies undergarments and tea. In the year 2015, Sri Lanka has exported approximately 467 Million U.S dollars' worth of Cinnamon. But it needs a lot of investment and tech acceleration. 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. 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. Cargill A. should invest time on understanding the consumption motivations and social trends that define the consumption behavior. Cargill A. should carefully consider the on-going technological innovations to stay ahead of the competition. In such an environment, Cargill A. should invest in disruptive technologies to maximize the profits and re-invest the profits for future disruptive technologies. The demand and supply of labor determine the wage rates and supply of skilled workforce. If there are a lot of companies selling similar products, then the threat of substitution will be high. Legal is the sixth factor of PESTEL analysis. Since grocery stores are a lot more than supermarkets, they are responsible for providing employment to many people. IGI Global. Heres what you need to know. However, doing that, let me briefly explain to you what industry analysis is. Revista ESPACIOS, 39(16). Strength. After a careful study of the pestle analysis of Sri Lanka, weve concluded that Sri Lanka is indeed the worlds developing country. Help, Academic Sustainable business strategies and PESTEL framework. The packaging is usually made up of plastic, and plastic causes environmental degradation. Follow this link to learn more about our cookie policy and how we use cookies. The advent of social media and e-commerce has encouraged online shopping behavior among customers. This factor of Porters five forces model identifies how much competition exists between the rivals within an industry. Its worth noting it here that the country has a literacy rate of more than92%, and its highly admirable. The only thing left for the company to do about these changes is abide by them. They are certified as organic. This will cause the demand for grocery stores to fall significantly. If you purchase a report that isupdated in the next 60 days, we will send you thenew edition and data extraction Free! Such changes can also influence the consumers' spending patterns, causing the organization to revise its product and marketing strategies. USD 300. Out of these 40,000 stores, more than 26,000 are simple grocery stores. Instead, they are owned by small sole proprietors. Its basically a digital catalogue for their products. If you need help with something similar, 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. This is the exact premise behind CostCo, a Canadian retailer. 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. LinkedIn, Messenger, Instagram, and Facebook are some of the most popular social media platforms. Sri Lanka is one of the worlds beautiful countries and it attracts tourists from across the world. PESTEL Analysis of Royal Ceramics Lanka PLC Political - The .

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