Pestel Anlysis Children Clothing

Topics: Environment, Alcoholic beverage, Alcoholism Pages: 10 (2234 words) Published: November 30, 2010
Table of content

1. Introduction1
2. Importance of environmental analysis1
3. Procedure1
4. Findings2
1. PESTEL analysis for environmental scanning2
2. Political factors2
3. Economical factors3
4. Socio-cultural factors4
5. Technological factors4
6. Environmental factors5
7. Legal factors5
8. Porter’s five forces model for environmental scanning6 9. Threat of entry6
10. Threat of substitutes7
11. The power of buyers7
12. The power of supplier8
13. Competitive rivalry8
14. Factors affecting competitive rivalry8
15. Industry consolidation in light of the Greene King experience9 5. Conclusion……………………………………………………………………..11 6. Recommendation …………………………………………………………… 11 7. References…………………………………………………………………….12 8. Appendices…………………………………………………………………….13

Report on environmental analysis & industry consolidations

Introduction

This report is about the importance of environmental analysis for the companies operating in the UK alcohol industry and what kind of tools is available for analysis. Also report will highlight the industry consolidation in the light of Greene King experience.

Importance of environmental analysis

This analysis is used to measure the internal (Strengths and weaknesses) and external (opportunities and threats) environment factors which affect companies in future and also help to make a strategy to compete environment influences. (J&S)

If companies do not analyse their internal and external environment then it would affect the company’s growth and others will have a chance to get competitive advantages.

“Boiled frog syndrome” is a good example for understanding the importance of environmental analysis. (Lecture notes 1, 28.09.2005)

Procedure

There are three models for analysing the environment: (J&S)
• PESTEL analysis
• Industry life cycle
• Porter’s five forces frame work

But in this report only two models will be used for scanning the environment. PESTEL analysis recognises the opportunities & threats for companies from internal or external environment and Porter’s Five Forces model recognises the source of competitor.

Firstly this report will look at the PESTEL analysis and how could companies use this model for analysing the environment. PESTEL analysis is used to see the future impact of environmental factors. There are six categories of environmental factors in PESTEL analysis i.e. Political, Economical, Socio--cultural, Technological, Environmental and Legal. (J&S)

Secondly this report will look at the Porter’s five forces model for identifying the source of competitors in an industry. (J&S)

Findings

PESTEL analysis for environmental scanning

Political factors

• Government stability
• Taxation policy
• Foreign trade regulations
• Social welfare policies
(Adapted from J&S)

Report will show how these political concerns influence alcohol industry. According to Philip Webster and David Rose (The Times, 27.10.2005) “smoking has been banned in all pubs in Scotland and Northern Ireland and now Government is concerning to put a ban on smoking in pubs that serve food in England and Wales”. This new threat will affect the industry’s profitability as it has mentioned in Greene King case study. It will also affect the Government stability. Government is also planning to reduce the consumption of alcohol by putting more taxes on alcoholic drinks. Again it will affect the alcohol industry and prices of alcoholic drinks will rise. If the Government decide to put more tax on alcohol industry then they have to change the policies for tax-free product and also they have to control the black market that offers cheap cigarettes and alcohol. Otherwise new law will not be affective. Therefore companies need to analyse the Government regulations that could jeopardise the profitability and plan for future strategies in order to compete those...

References: • Greene King annual report 2004 & 2005, access date: 20.10. 2005 and 01. 11. 2005.
www.greeneking.co.uk
• Johnson, G and scholes, k (2002), Exploring Corporate Strategy 6th ed UK: Prentice Hall.
• Webster, P and Rose, D (2005) “Pubs will call time on food to keep smokers” in The Times newspaper, 27.10. 2005, page 1 and 9.
• Wiscarson, G, Strategic Environment, Lecture notes 1, 28. 09. 2005.
• Wiscarson, G, Strategic Environment, Lecture notes 2, 05. 10. 2005.
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