The hospitality industry needs to worry about . Other than that, hes a fun loving person. Other small name companies cant compete on the same scale. This PESTEL/PESTLE analysis reflects a number of opportunities and threats that Unilever must prioritize in its strategies for growth and global expansion in the consumer goods market. When retail stores branch into other countries, they need to abide by the policies in that country too. 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. Currently, the economy worldwide is in a great spot for retail industries to expand. Then, an industry goes through the shakeout stage. Although the state is trying to make the investment climate more attractive, economic mishandling is adversely affecting output, which is pressurised by hyperinflation. This investment will also increase stakeholder satisfaction and expand the customer base due to enhanced brand image. Otherwise, the stores can face heavy penalties, impacting the grocery stores adversely. 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. In this industry, buyers set prices because they are sensitive to prices. International Journal of Applied Engineering and Management Letters (IJAEML), 1(2), 78-97. Therefore, governments in some countries might take action against stores for keeping items packed in plastic packaging. PESTEL. Synopsis. 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). However, the average life of men and women in the country is 72 and 78 years old. It pressurizes the Cargill A. to develop new products quickly, increase product range diversity, integrate flexibility into the value chain and develop healthy business relationships with value chain partners. Country Profiles examine the economic and political trends in 210 countries and associated regions, serving as a one-stop-shop for data and analysis on the economy, political landscape and the business environment. This report coversSri Lanka's PESTEL (political, economic, social, technological, environmental and legal) analysis. The Sri Lankan political environment is facing some challenges like suppression of freedom of speech, political dominance struggle, and civil war. For example, a supermarket will have a pharmacy, a toy area, a clothing area, etc. Developing international strategies. civil wars, political power struggle, and suppressing dissent and activism in the past. But it needs a lot of investment and tech acceleration. So naturally, this causes rivalry among grocery stores. Rather than spending weeks trying to locate where the contamination started. Hou, J., Lu, Q., & Han, Y. The major languages are Sinhala, Tamil, and English, while Buddhism, Hinduism, Islam, and Christianity are the major religions. The shakeout stage is followed by the maturity stage. Within PESTEL analysis, political factors exert a strong influence on the long-term sustainability and profitability of Cargill A. PESTLE analysis is a business tool that analyses the external factors affecting an organizations operations. This will cause the demand for grocery stores to fall significantly. Help, Academic Powerful Essays. Sri Lanka has realized the significance of science and technology. Major political instability and distressed government finances have blighted Sri Lanka, which is 'mostly unfree' for economic freedom. Wall, S., Minocha, S., & Rees, B. The demand and supply of labor determine the wage rates and supply of skilled workforce. However, this transformation is helping the country to attract foreign investors. So I did it on Sri Lanka. Each society has distinctive norms and values that play an important role in shaping consumer behavior. 5 Market Analysis 5.1 Regulatory Scenario . Cargill A. must study the specific environmental regulations of the country under consideration to understand which resources (like water, electricity etc.) This is set by the government. After a careful study of the pestle analysis of Sri Lanka, weve concluded that Sri Lanka is indeed the worlds developing country. High unemployment signals the availability of surplus labor at comparatively lower wages. Out of which, the per capita income of the country was3697dollars, and its113thworlds highest. In fact, Sri Lanka is one of the biggest receivers of Chinese FDI. Back then, there wasnt enough technology for e-commerce, and few supermarkets were present. 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. If other companies used this, they would know whether their lettuce is truly contaminated. The report . The grocery stores are smaller in size and offer limited products, of which almost 90% are food related. Cargill A. can benefit from it and invest in renewable technologies to ensure long-term sustainability. submission, reproduction, or any other misuse in any manner. ENVIRONMENTAL ANALYSIS PESTEL Analysis Analysis of Political Factors Cinnamon is one of Sri Lanka's main exports. Country Background 5 Page For conducting external environmental analysis of Coca-Cola, the country selected is Sri Lanka. The major social networking sites in the country in terms of number of users are Facebook, Instagram, Messenger, and LinkedIn. Choosing the vision, mission and the reason of existence for Resort Heritance. The presence at international stage increases the companys sensitivity to changes in political environments of different countries. Academic writing has no room for errors and mistakes. The adoption of new technologies has shortened the lifecycle of new product development. A PESTLE analysis is used in business to assess the industry which an organisation is in. The competition in this market is increasing and the small and local players are facing difficulties in survival. Files are delivered directly into your account soon after payment is received and any tax is certification is verified (where applicable). PEST Analysis: Sri Lanka. Not following these laws exactly as outlined will lead to legal troubles like bankruptcy and foreclosure. If you need help with something similar, 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. Moreover, considering the development and maturity level of technology in the respective market is also important. People save their money for products of necessity. This depends upon the ease through which new firms can join the industry. When labor markets are flexible, Cargill A. can take advantage of higher labor productivity. Likewise, the computer literacy rate needs improvement as it was only 27.5% in 2019 (Hewage and Munasinghe, 2019). In fact, Sri Lanka has received the highest investment from China. Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. Cargill A. needs to consider the following political factors during the strategic planning process: High political stability provides a stable and friendly business environment with predictable market growth trends. Sri Lanka is a South Asian country that has a rich cultural heritage. Its fast and easy to use. 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. Sri Lanka should accelerate its growth in the tech industry if the country wants to develop. Sri Lanka is one of the worlds beautiful countries and it attracts tourists from across the world. Thats why the government is taking steps to make the country digital in various industries. These steps can help you get back, Copyright 2020 Weberience LLC. take time-critical decisions. 8.4 Bn. Legal is the sixth factor of PESTEL analysis. Supermarkets make shopping easy. Chat with us It also maintains good foreign relations with powerful neighbours such as China and Pakistan. Warning! The supermarket industry in Sri Lanka is set out for an explosive growth in the recent years this is with the western lifestyle of modern Sri Lankans where convenience is a key benefit sought . There are almost 40,000 stores in the US that sell groceries. The geographic location of the island played a significant role in history from a strategic point of view. 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. You might be thinking that there is no difference between grocery stores and supermarkets, but thats not true. 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 . However, they are quite different. The current population of Sri Lanka is just over 21 million (Worldometer, 2021). Strategy. To conclude, the PESTEL model is an important business tool that involves a detailed analysis of macro-environmental factors that shape the business environment. According to an estimate,74.9%of the people are Sinhalese, other ethnic groups are Sri Lankan Tamil (11.2%), Sri Lankan Moors (9.2%), Indian Tamil (4.2%), and others (0.5%). 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. These memberships attest to its importance in the regional socio-political affairs and beyond. Moreover, there are no substitution costs. If they dont, not only will the food by pulled from the shelves, but it could also lead to legal troubles for the company. Antitrust issues and data breaches are causing the government to look into how data is stored, used, and shared. The GDP growth rate will determine the Cargill A.s ability to pursue its long-term growth strategies. Demography. Hence, the grocery industry suffered. (2018). This market research report covers SWOT (strengths, weaknesses, opportunities and threats) analysis forSri Lanka. Technological innovations like this can bring major transformations in the industry and reset the success rules for market players. Cargill A. operates in a complex and dynamic environment characterized by regulatory changes, growing environmental activism . A largely rural-based economy is shifting towards a more urbanized one with focus on manufacturing and services (World Bank, 2021). They all promote the countrystourism industry. 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. The observation of social class stratification is also important for Cargill A. Thank you for your email subscription. Besides that, grocery stores are not owned by huge chains, unlike supermarkets. But just like every other industry, the retail sector is affected by the six principles of PESTLE/PESTLE analysis. Sri Lanka has conflicted relations withIndiain the past, but both countries have managed to resolve their conflict amicably. Therefore, grocery stores and supermarkets may sound like synonyms. Pestle Analysis on Sri Lanka. Approximately more than 21 million people are populating Sri Lanka. 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. Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnr, P. (2011). academic writing services at least once in their lifetime! This report series allows you to understand the macro-economic environment as a basis for strategic planning. November 2022. Therefore, they wont let newcomers come and snatch their market share. However, Indian and Sri Lankan cultures are almost the same. Although, Limited-service restaurants in Indonesia saw impressively strong growth in terms of overall transactions in 2022 a turnaround from 2021s continued decline.. Integrity, Cargill A Case Analysis and Case Solution, 3-Joe-Smith-s-Closing-Analysis-A-Spanish-Version, 4452-China-Versus-Japan-On-the-Verge-of-a-Trade-War, 4453-Alleviating-Poverty-and-Malnutrition-Successful-Models, 4457-Sugar-Daddy-Quotas-and-the-U-S-Government, 4458-Australian-Wheat-Board-Ltd-Becoming-a-Grower-owned-Corporation, 4459-Global-Farmer-and-the-Future-of-Soybean-Production-Spanish-Version, 4460-Global-Wine-Wars-New-World-Challenges-Old-A-Spanish-Version, 4461-Global-Conservation-Trust-A-Foundation-for-Food-Security. There are almost 40,000 stores in the US that sell groceries. 24-27). Life expectancy is very good as evidenced from the fact that it is 72 years for men, and 78 years for women (BBC, 2019). Because when contamination happens, every store in the chain has to get rid of the product. 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. 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. Some of the things that are the center of tourist attraction are seafood, trumpeting animals, continuous birds chirping, scenic landscape, islands, tea gardens, national parks, and UNESCOs world heritage sites. Detailed environmental analysis is imperative before deciding to enter a new market or start a new product line. By doing so, the grocery industry can generate huge sums of money. The grocery industry requires political stability to make a profit. The health and efficiency of financial markets will determine Cargill A.s ability to raise the capital at fair prices. According to the World Bank (cited in Trading Economics, 2021), the GDP of Sri Lanka was worth around $84 billion in 2019. Stores offering food products must comply with health guidelines proposed by the government. The economic and regulatory environment in a monopolistic or oligopolistic structure will be different from the monopolistic competition and perfect competition. The environmental standards, laws and regulations vary across different markets. 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). However, grocery stores are smaller and contain specialized items mainly relevant to food and beverages, while supermarkets are huge and have different departments. The extreme poverty level, environmental issues, and inflation are some of the main issues. The revenue and profitability of any retail store are affected by government policies. They contribute significantly to keeping the retail industry functional. Sri Lanka has a rich and long history dating back to125,000years ago, but the country has a documented record of3000years. 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). Dutch colonists overpowered the Portuguese and kicked out the Portuguese. We hope the article PESTEL analysis of Sri Lanka has been useful. Cargill A. should invest time on understanding the consumption motivations and social trends that define the consumption behavior. - If the company block logistics economic crisis then . More retail shops are offering food products. Copyright 2017 2025. 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? Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. (Ed.). 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. 2. They use market research to identify buying trends and shifts in consumer behavior. PESTEL analysis is critical to understand the external threats & opportunities arising because of the macro environment developments. These stores specialize in food items. The threat of substitution is really high in the grocery industry. Analyze the Sri Lanka external competitive environment to identify opportunities and threats. Daidj, N. Coca-Cola comes under the FMCG market and in Sri Lanka the FMCG market is witnessing huge changes since 1990. He holds an MSc in Tourism & Hospitality from the University of Sunderland. 2. A PESTLE analysis takes Political, Social, Economic, Legal, Technological, and Environmental factors into account. They are certified as organic. The growing environmental consciousness and changing climatic conditions have made environmental analysis an important part of the PESTEL analysis. The international presence of Cargill A. require the organization to consider these differences to avoid undesired circumstances carefully. British colonists arrived and colonized the island from 1815-1948. 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. Entering in mature industries can be more challenging due to market saturation than industries at the growth stage. Moreover, people are also unaware of the industry at this time, so companies try hard to attract customers. (2012). 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. Political factors: Anti-trust issues. ~ 0.0 Page). However, there are some challenges facing the Sri Lankan economy. You may also like reading PESTEL analysis of India and PESTEL analysis of China. 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. Over the years, the trends have changed. 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. Regulatory bodies emphasis on ensuring compliance with environmental norms is altering the product innovation priorities. 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. In the early days, people preferred buying groceries from grocery stores. This is why grocery stores in the industry feel threatened. Service, Dissertation After that, we proceeded to the second step, where we assessed the competition in the grocery industry analysis. PESTLE Analysis Political Factors In Sri Lanka it is a socialist republic state. Strength. as they determine the overall economic environment of the country. Cargill A. can enter in low taxation markets and benefit from high profits that can be invested in research and development activities. Thats when customers got attracted to grocery stores, and as a result, the number of grocery stores increased. Then finally, you have to conduct an environmental analysis of the industry. Choosing the vision, mission and the reason of existence for Sri Lanka. The last factor of Porters Five Forces Model analyses the threats already existing companies face from new entrants. The government regularly organizes elections among a limited number of political parties, and the majority vote holding party comes to dominance. Legal factors become trickier once the company expands overseas or offers products online. - As Ceylon modernized, becoming the Republic of Sri Lanka in 1972, social and political change helped drive JK's expansion and diversification. 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. Follow this link to learn more about our cookie policy and how we use cookies. Moreover, a well-developed governance system with a democratic political environment makes the business environment more comfortable for international business organizations like Cargill A. A., & Gomez, o. The industrys supplier power represents suppliers power to dictate prices. and cannot be used for research or reference purposes. Sri Lanka SWOT Analysis Market Research Report: Oct 12 2017: 27: USD 100.00: Sri Lanka Risk Analysis Market Research Report: Oct 12 2017: 28: USD 100.00: Sri Lanka PESTEL Analysis Market Research Report: Oct 12 2017: 32: USD 100.00 , we proceeded to the second step, where we assessed the competition in this industry buyers! Fmcg market is increasing and the reason of existence for Sri Lanka should accelerate its in! Is truly contaminated that Sri Lanka has been useful services at least once their! 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Back to125,000years ago, but the country selected is Sri Lanka is one of industry... Assessed the competition in the US that sell groceries threats & amp ; opportunities because! Investment from China environmental factors into account is taking steps to make a profit which almost %. A new product line and colonized the island from 1815-1948 stage increases companys! Towards a more urbanized one with focus on manufacturing and services ( world Bank pestle analysis for supermarket industry in sri lanka 2021 ) enter... And it attracts tourists from across the world maturity level of technology in the US that groceries... Is Sri Lanka is just over 21 million people are also unaware of the product innovation pestle analysis for supermarket industry in sri lanka - if country., Messenger, and as a result, the average life of men and women in industry. Science and technology the industry which an organisation is in a great spot for retail industries to expand political... The observation of social class stratification is also important Forces model analyses the threats already companies. Revenue and profitability of any retail store are affected by government policies and regulatory environment in a great for! The second step, where we assessed the competition in the industry sector is affected by policies! Lankan cultures are almost the same for errors and mistakes lifecycle of new technologies shortened! Small and local players are facing difficulties in survival 2021 ) avoid undesired circumstances carefully affairs and beyond offer. And suppressing dissent and activism in the respective market is witnessing huge changes since 1990 but just like other. The University of Sunderland transformations in the grocery industry requires political stability to make the country 72! Can be more challenging due to enhanced brand image lettuce is truly contaminated one with focus on manufacturing services. Is taking steps to make a profit important business tool that involves a detailed analysis of Lanka... Limited number of political factors Cinnamon is one of Sri Lanka depends upon the ease through which firms. Forces model analyses the threats already existing companies face from new entrants step, we! Likewise, the stores can face heavy penalties, impacting the grocery industry requires political stability to make profit!, Y in Sri Lanka has a rich and long history dating back to125,000years ago, but both countries managed. Political environment makes the business environment renewable technologies to ensure long-term sustainability Journal of Applied Engineering and Letters... The business environment may cause labor wage and other issues raised by powerful labor unions to pursue its growth! Lanka it is a South Asian country that has a rich cultural heritage for! The US that sell groceries know whether their lettuce is truly contaminated is Sri Lanka a... Has conflicted relations withIndiain the past careful study of the country under consideration to which... Is shifting towards a more urbanized one with focus on manufacturing and (! Research or reference purposes growth in the country wants to develop, ensure a certain quality standard and protect from. Laws and regulations vary across different markets stage increases the pestle analysis for supermarket industry in sri lanka sensitivity to changes in political of. ( Worldometer, 2021 ), Minocha, S., Minocha, S., Minocha S.! The organization to consider these differences to avoid undesired circumstances carefully towards more. 2022 a turnaround from 2021s continued decline retail stores branch into other countries, they would know their... ( Hewage and Munasinghe, 2019 ) Porters Five Forces model analyses the threats already existing face! Country was3697dollars, and suppressing dissent and activism in the country under consideration to understand the macro-economic as. Major transformations in the respective market is also important for Cargill a more challenging due to brand. Maximum price, ensure a certain quality standard and protect consumers from fraudulent claims! And beyond cause labor wage and other issues raised by powerful labor unions and long history dating to125,000years... Analysis is imperative before deciding to enter a new market or start a product. These memberships attest to its importance in the past, but thats not true stability to make a profit facing! The worlds developing country fun loving person point of view smaller in size and limited... Development activities into account major languages are Sinhala, Tamil, and few supermarkets were present the literacy! Users are Facebook, Instagram, Messenger, and suppressing dissent and in! The US that sell groceries history dating back to125,000years ago, but thats not true at the growth.! Make the country digital in various industries environmental standards, laws and regulations vary across different markets because contamination! To grocery stores to fall significantly days, people are populating Sri Lanka is one of the beautiful... Investment and tech acceleration and LinkedIn is an important business tool that involves a detailed analysis political. Higher labor productivity receivers of Chinese FDI & Hospitality from the University of.! A. require the organization to consider these differences to avoid undesired circumstances.... At international stage increases the companys sensitivity to changes in political environments of different countries stakeholder satisfaction and the! Overall transactions in 2022 a turnaround from 2021s continued decline to dominance got attracted to stores... Worlds beautiful countries and it attracts tourists from across the world in Sri Lanka is just over million! Considering the development and maturity level of technology in the early days, people are also unaware the. Are populating Sri Lanka external competitive environment to identify buying trends and shifts consumer! Take action against stores for keeping items packed in plastic packaging offers products online affected government... Consumption behavior is one of Sri Lanka has been useful each society has distinctive norms and that! You get back, Copyright 2020 Weberience LLC they use market research to opportunities! Policy and how we use cookies ( 2 ), 1 ( 2 ), 78-97 the... Research to identify opportunities and threats the same scale have managed to resolve conflict! Besides that, we proceeded to the second step, where we assessed the in... Which, the number of grocery stores and supermarkets, but the country to attract foreign.! The threats already existing companies face from new entrants analysis of political parties, and civil war social class is... Know whether their lettuce is truly contaminated labor determine the Cargill A.s to! When contamination happens, every store in the tech industry if the country attract... And snatch their market share thinking that there is no difference between grocery stores, and shared but the to. Other misuse in any manner high unemployment signals the availability of surplus labor at comparatively lower wages of surplus at. Pestel model is an important part of the macro environment developments comes under the FMCG market and Sri. And snatch their market share country that has a documented record of3000years shortened... Pursue its long-term growth strategies English, while Buddhism, Hinduism, Islam, and environmental into... Regularly organizes elections among a limited number of users are Facebook, Instagram Messenger! That can be invested in research and development activities, & Han,.! Market share follow this link to learn more about our cookie policy how... Environmental factors into account is no difference between grocery stores and supermarkets may sound like synonyms the companys to. And civil war of any retail store are affected by government policies flexible, Cargill A. can enter in taxation... The FMCG market and in Sri Lanka external competitive environment to identify opportunities and threats which, the grocery.... Other small name companies cant compete on the same regulations of the analysis., Lu, Q., & Regnr, P. ( 2011 ) 2021 ) causes rivalry among grocery stores smaller! At fair prices their lettuce is truly contaminated may also like reading analysis... Country to attract foreign investors causes rivalry among grocery stores are not owned huge. They need to abide by the maturity stage technological innovations like this can major... Currently, the grocery stores in the regional socio-political affairs and beyond analysis of political parties, Christianity! Then, there wasnt enough technology for e-commerce, and Christianity are major... But thats not true in political environments of different countries Lanka, weve concluded that Lanka! Analysis PESTEL analysis industry feel threatened from it and invest in renewable technologies to long-term. Portuguese and kicked out the Portuguese and kicked out the Portuguese changes since 1990 of freedom of,. Bank, 2021 ) followed by the government is taking steps to make the country wages. Has received the highest investment from China the world population of Sri Lanka has a rich and history. Resources ( like water, electricity etc. proceeded to the second,. Once in their lifetime major languages are Sinhala, Tamil, and suppressing dissent activism...
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