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. This depends upon the ease through which new firms can join the industry. But if the countrys political parties are fickle, it can easily turn into a problem. 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. Here you can find food products, clothing, and electronics, in large quantities. Incomes could face challenges in the short term, whilst poverty is set to rise, but the middle class is growing longer term. Its basically a digital catalogue for their products. (2008, December). Each country must abide by their political regulations. 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). Economists are predicting a global recession. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Approximately more than 21 million people are populating Sri Lanka. The regulations affect which products can be imported, exported, and sold in stores. Heres the pestle analysis of Sri Lanka as follows; Sri Lanka follows the semi-presidential system of government and administration. By doing so, the grocery industry can generate huge sums of money. The first task we had was to do a PESTEL analysis of our home-country that we were in charge of. A retail store needs to meet legislative conditions before opening the shop. According to an estimate, the annual nominal GDP of Sri Lanka in 2020 was81.120billion dollars, and its66thworlds highest. Likewise, communal tensions and discrimination due to low caste system also need to be addressed. With the help of this tool, companies decide if they should enter an industry. There are almost 40,000 stores in the US that sell groceries. Likewise, the computer literacy rate needs improvement as it was only 27.5% in 2019 (Hewage and Munasinghe, 2019). Entering in markets where technological advancement has not reached the maturity means Cargill A. can increase the market share by focusing on emerging technological innovations. Finally, the exchange rate fluctuation can also influence the profitability and international trade. The grocery industry holds great significance since it provides groceries and employment to millions of people. take time-critical decisions. In the early days, people preferred buying groceries from grocery stores. Technological environment is the next element to discuss in the PESTEL analysis of Sri Lanka. Studying and forecasting the consumers purchasing power based on relevant economic indicators is important to analyze the customers interests and spending patterns. Pestle analysis of Sri Lanka. Although the state is trying to make the investment climate more attractive, economic mishandling is adversely affecting output, which is pressurised by hyperinflation. Studying the demographic characteristics can help Cargill A. in choosing the right market segment/segments with high growth potential. 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. As technology advances, stores are adopting new systems, software, and hardware. These steps can help you get back, Copyright 2020 Weberience LLC. For instance, extreme weather conditions can increase the cost of operations and compel the Cargill A. to make the value chain more flexible. In the grocery industry, buyers have great power. Its important to understand the laws long before the store is open for business. It means that the countrys economy is moving towards urbanization and industrial manufacturing from small rural areas. Now that you know what an industry analysis is, lets move ahead and carry out the grocery industry analysis. The environmental standards, laws and regulations vary across different markets. If you are happy with this select "Accept All". Strength. If you have BIG dreams to score BIG, think out Curious about how we partner with you to help you solve your complex modern-day business problem? The growing inequality in many countries is altering the power structure, which has serious implications for international business organizations like Cargill A. Cargill A. need to study the traditionally assigned gender roles to align its marketing and communication practices accordingly. Copyright 2010-23 Market Research Reports, Inc.. All Rights Reserved. It also means more investors are becoming interested in the profitability offered by retail stores. This change in consumer behavior impacts the grocery industry negatively. The high interest rate will encourage the attitude towards investment and increase growth opportunities for Cargill A. They use market research to identify buying trends and shifts in consumer behavior. as they determine the overall economic environment of the country. 2. Currently, the economy worldwide is in a great spot for retail industries to expand. All rights reserved LCHW. People save their money for products of necessity. The Democratic Socialist Republic of Sri Lanka or Ceylon is a South Asian island country. All retail stores need to meet the environmental requirements for consumer and employee safety. If not, select "Manage Preferences" to learn more about managing your cookie preferences. This report series allows you to understand the macro-economic environment as a basis for strategic planning. Total Sri Lankan oral care market share is approximately Rs. 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. The country imports it fromMalaysia,Singapore,UAE, India, and China. With the help of technology, retail is one of those industries that can survive post-economic destruction. 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. Theyll spend the bare minimum on food while the rest goes towards unpaid bills. Similarly, it is important to understand the industry lifecycle stage. Yksel, I. You might be thinking that there is no difference between grocery stores and supermarkets, but thats not true. This market research report covers SWOT (strengths, weaknesses, opportunities and threats) analysis forSri Lanka. Sri Lanka is a South Asian country that has a rich cultural heritage. Grocery stores and supermarkets are interchangeable terms. submission, reproduction, or any other misuse in any manner. It is officially known as the Democratic Socialist Republic of Sri Lanka. In some cases, this can be beneficial. Following technological factors can influence the business performance of Cargill A.: The development of information and communication technologies has led towards the adoption of innovative marketing techniques to enhance collaboration with customers. If there are a lot of companies selling similar products, then the threat of substitution will be high. You may also like reading PESTEL analysis of India and PESTEL analysis of China. 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. The business practices of the Cargill A. are influenced by the prevailing economic structure. It maintains very good relations with India; however, the relationship was tested a number of times in the past. 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. The health and efficiency of financial markets will determine Cargill A.s ability to raise the capital at fair prices. Other small name companies cant compete on the same scale. It is an acronym for political, economic, social, technological, environmental and legal factors that shape the macro business environment. 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. Developing strategic business models and competitive advantage in the digital sector. Otherwise, the stores can face heavy penalties, impacting the grocery stores adversely. Consumers prefer the natural toothpastes to the synthetic, artificial flavored toothpaste that is commonly found. According to the annual reports of each company that produces ceramic tiles, shows continuous growth of profits in parallel with net sales. This stage of the industry life cycle represents growth in the industry when more people begin to join. Big name companies are able to offer a selection online. The grocery industry experienced the startup stage between the 11th and 14th centuries. In case of a global recession, the purchasing power of the people will drop, and the grocery industry will observe severe financial losses. The grocery industry requires political stability to make a profit. Some examples of environmental factors that Cargill A. need to consider are given below. The country has multiple democratic parties. Hence, Cargill A. should study how intellectual property rights are protected in the host country and make the business strategies accordingly. This is the exact premise behind CostCo, a Canadian retailer. The organization should also carefully consider the interest rate and its influence on borrowing ability and attitude towards investment. Culture is considered an important variable by international marketing managers. 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. This can happen when unemployment rates spike. Regulatory bodies emphasis on ensuring compliance with environmental norms is altering the product innovation priorities. Synopsis. Dissertation Likewise, it needs to work more on ensuring communal harmony and upholding human rights of journalists, minorities, and others (Amnesty International, 2021). IFS marks 25th anniversary of the inception of its operations in Sri Lanka as it sees continued success in technology excellence 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. Since grocery stores are a lot more than supermarkets, they are responsible for providing employment to many people.