Amazon and Walmart are going head-to-head. According to an estimate, the annual nominal GDP of Sri Lanka in 2020 was81.120billion dollars, and its66thworlds highest. Here you can find food products, clothing, and electronics, in large quantities. Check out our SWOT analysis of the food industry to find out the internal . Check your email Hou, J., Lu, Q., & Han, Y. Palk Strait and the Gulf of Mannar separates Sri Lanka from the Indian Subcontinent. To conclude, the PESTEL model is an important business tool that involves a detailed analysis of macro-environmental factors that shape the business environment. After we cleared the difference between the two, we conducted the grocery industry analysis. Technological trends can be used to start the creative social media campaigns for developing online brand communities. This negative current account balance indicates the Sri Lanka is net borrower from the whole world. 1. 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. (Ed.). Where would I buy groceries from? The Sri Lankan economy is going through a massive . Curious about how we partner with you to help you solve your complex modern-day business problem? 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. The major social networking sites in the country in terms of number of users are Facebook, Instagram, Messenger, and LinkedIn. Surely, it needs to work on political stability, and reforms. A careful evaluation of legal aspects is required to avoid getting into some serious trouble. Understanding these two things helps to find items more likely to boost profits. Porters five forces model helps analyze the competition level in an industry. Exploring strategy. Many countries have placed strict norms to protect their urban areas through effective waste management. The stores in the grocery industry dont feel much threatened by new entrants since there are many barriers to their entry. They are certified as organic. As technology advances, stores are adopting new systems, software, and hardware. Okay, I might be being a little dramatic because I can still get my groceries from the supermarket, but its not the same. 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). A strategic framework for technology evaluation. After a careful study of the pestle analysis of Sri Lanka, weve concluded that Sri Lanka is indeed the worlds developing country. Our site uses cookies to improve functionality. The adoption of new technologies has shortened the lifecycle of new product development. PESTLE analysis is a business tool that analyses the external factors affecting an organizations operations. In this way, grocery stores are essential for the economy. When retail stores branch into other countries, they need to abide by the policies in that country too. 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. In fact, Sri Lanka has received the highest investment from China. Sri Lanka has a mixed legal and judiciary system. 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. After that, the growth stage arrives. 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. Cargill A. should carefully consider the on-going technological innovations to stay ahead of the competition. Rather than spending weeks trying to locate where the contamination started. The products are either shipped to the customers home or the closest store for pickup. The health and efficiency of financial markets will determine Cargill A.s ability to raise the capital at fair prices. Frequent changes in government policies harm business performance by increasing environmental uncertainty. Studying the demographic characteristics can help Cargill A. in choosing the right market segment/segments with high growth potential. Political - turmoil, Economy - shambles, Social - upheaval, Technology - fallout as no power, Environment - distraction due to poor policy implementation, Legal - politicised hence no consistency. The geographic location of the island played a significant role in history from a strategic point of view. People save their money for products of necessity. The grocery industry hit its maturity stage in the early 1990s. In the grocery industry, buyers have great power. Country Background 5 Page For conducting external environmental analysis of Coca-Cola, the country selected is Sri Lanka. Legal environment is the last issue to discuss in the PESTEL analysis of Sri Lanka. This is the third major source of revenue generation to the economy. Life expectancy is very good as evidenced from the fact that it is 72 years for men, and 78 years for women (BBC, 2019). Strategy planning process often requires five steps -. As does data and copyright laws. Copyright 2010-23 Market Research Reports, Inc.. All Rights Reserved. BAC Reports. Likewise, some shops in other countries have to pay a tax for offering fatty foods. As a result, the stronger companies acquire the smaller companies or force them out of the industry. As well as cash registers to manage money after a sale. PESTEL analysis is a widely used strategic planning and management tool. Financial Times Prentice Hall. Issa, T., Chang, V., & Issa, T. (2010). (2008, December). The consumers spending patterns are influenced by their purchasing power of money. To conduct an industry analysis, first, you must conduct an industry life cycle. Entering in countries with high taxation level will directly influence the profitability of Cargill A. Supermarkets make shopping easy. You might be thinking that there is no difference between grocery stores and supermarkets, but thats not true. The Democratic Socialist Republic of Sri Lanka or Ceylon is a South Asian island country. Hence, no competition exists at that time. Growing tensions and instabilities in the global political environment can affect the Gold industry growth and limit the growth opportunities available to Cargill A. Via helps you navigate a fast-changing digital marketplace. The country imports it fromMalaysia,Singapore,UAE, India, and China. ~ 0.0 Page). GSTF International Journal on Computing, 1(1), 73-80. Because no one can afford or justify the purchases. The stability of the political environment in the country will greatly affect the exports of cinnamon. Hence all the suppliers have identical products. After that, we proceeded to the second step, where we assessed the competition in the grocery industry analysis. Where should we focus our expansion strategy? Similarly, market segmentation based on social class may be ineffective where social class stratification is low. 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. The advent of social media and e-commerce has encouraged online shopping behavior among customers. Mobile adoption is very strong, but innovation potential is lacking. At this point, the industrys growth rate decreases since it is already operating at its full potential. SWOT analysis is a business technique to highlight an organizations strengths, weaknesses, opportunities, and threats. Moreover, the business performance of Cargill A. is also influenced by the extent to which the host country government has spent on core infrastructure development. Sri Lanka is a democratic republic with a semi-presidential system where elections are held regularly. Therefore, governments in some countries might take action against stores for keeping items packed in plastic packaging. This is why grocery stores in the industry feel threatened. 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). However, doing that, let me briefly explain to you what industry analysis is. This market research report covers current and future business risk analysis forSri Lankaalong with macroeconomic factor analysis. Subscribe now to get your discount coupon *Only Besides that, in the growth phase, consumers have many alternatives. 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. Intellectual property regulations are designed to protect the companies' patents and valuable ideas. Synopsis. By doing so, the grocery industry can generate huge sums of money. Academic writing has no room for errors and mistakes. Back then, there wasnt enough technology for e-commerce, and few supermarkets were present. Grocery stores mainly keep packaged food items. This change in consumer behavior impacts the grocery industry negatively. Major political instability and distressed government finances have blighted Sri Lanka, which is mostly unfree for economic freedom. We are here to help. Bureaucracy and corruption negatively influence the business environment. The first task we had was to do a PESTEL analysis of our home-country that we were in charge of. Help, Academic The country is drawing a lot of foreign investments every year. Read More. Its one of the few industries who managed to scrape through. IFS marks 25th anniversary of the inception of its operations in Sri Lanka as it sees continued success in technology excellence Warning! 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. Market Research Reports, Inc16192 Coastal HwyLewes, DE 19958, USA. Stores offering food products must comply with health guidelines proposed by the government. These stores specialize in food items. Environmental factors affecting Sri Lanka. Grocery stores are one of the sub-sectors of the retail industry, along with six other sub-sectors. 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. Consumers prefer the natural toothpastes to the synthetic, artificial flavored toothpaste that is commonly found. 1189 Words; 5 Pages; Jun 15th, 2018 Published . 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. Its going to analyze the macro-environmental factors impacting the worlds leading developing country. (2014). 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. Service, Dissertation Finally, the exchange rate fluctuation can also influence the profitability and international trade. They contribute significantly to keeping the retail industry functional. International business. Technological factors affecting Sri Lanka. 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According to an estimate, the computer literacy of Sri Lanka is roundabout30.1%, and its very low. Because we just dont know. Heres what you need to know. As a result, the revenue of the grocery industry will fall. This report series allows you to understand the macro-economic environment as a basis for strategic planning. International Journal of Business and Management, 7(24), 52. 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. It just means they dont have the means to meet the same demands as the bigger retailers. 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. Powerful Essays. All rights reserved LCHW. Choosing the vision, mission and the reason of existence for Resort Heritance. Economic factors affecting Sri Lanka. 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. 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. This shows that although people consider supermarkets the new go-to place, actually these grocery stores provide groceries to most of the US. Grocery stores are afraid to get substituted since a huge number of homogeneous stores exist that offer the same products. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. 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. Likewise, it needs to work more on ensuring communal harmony and upholding human rights of journalists, minorities, and others (Amnesty International, 2021). Thats when shops began to establish. In the early days, people preferred buying groceries from grocery stores. Its not only physical retail stores under scrutiny. 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. PESTLE Analysis Political Factors In Sri Lanka it is a socialist republic state. 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. Operating in such a market can lower the production cost of Cargill A. There are multiple stages in the life cycle of any industry. There is a growing trend towards the use of green/eco-friendly products. Access and download reports and data purchased through Euromonitor.com. The GDP growth rate will determine the Cargill A.s ability to pursue its long-term growth strategies. Developing international strategies. Aug-22-2018. In 2008 International Conference on Information Management, Innovation Management and Industrial Engineering (Vol. Economists are predicting a global recession. Culture is considered an important variable by international marketing managers. If you're in the Commodities industry in Sri Lanka, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty, Now in its seventh edition, this report explores the top digital shopper trends that will redefine commerce the most in the year ahead. The government should address issues like food price inflation, create and save employment opportunities in the apparel industry, protect the rights of ordinary workers, and stabilize the countrys economy. Similarly, high trade restrictions can make the business environment more complex by affecting the exports and harming relationships with foreign trade partners. Its important to understand the laws long before the store is open for business. Therefore, grocery stores and supermarkets may sound like synonyms. Are held regularly, T., Chang, V., & issa, T., Chang, V., issa... 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