MARKET ANALYSIS

MARKET ANALYSIS

Rachel’s dairy is a firm that produces dairy products such as yoghurts in the United Kingdom. It’s known for its delicious recipes that are unique from any other milk processing firms which give it some level of competitive advantage. However, like any other industry, it’s usually faced with challenges. The following method of market analysis is used in determination.

PESTEL Analysis

This comprises issues that face a firm in relation to; political environment, economic factors, social factors, technological factors, environmental conditions and legal factors. These are among the major influences in the operation of a business on a daily basis. These issues need to be addressed and the rules to be followed ought to be followed to the latter by any organisation. This will ensure there will be no conflicts. Rachel’s Organic firm will be faced with the following issues:

Political factors

The organic firm is faced with influence and pressure from the government. There are some regulations that are set by the government in relation to the operations of the business. Rachel’s industry is not left out since it falls among food processing companies. There are also trade restrictions set by the government in case it wants to expand its business operations. Fr example, there are some rules and regulations that the firm needs to follow when its expanding business operations to Europe and Asia.

The organization should not only focus on expanding operations, it should also consider the political viability in the country of venture. Some political ideologies may be unfavourable to the company. Thus, careful surveys need to be taken beforehand in order to ensure there is a favourable working condition. With viability, it will be easy for the company to attain a new home and operate effectively. Unfavourable working conditions especially those influenced by politics could be a major cause of the downfall of any organisation.

Economic Factors

Economic conditions such as recession and inflation also affect the company (Ho, 2014). This is because, during times of inflation, customers have a tendency to minimize consumption of goods that are considered luxurious such as yoghurts. The company hence faces this challenge and cannot escape it easily. Inflation causes recession in a country in that there will be not much circulation of money thus people tend to hold the little money they have.

Competition from other firms is also brought about by economic conditions prevailing. Since it’s not the only company producing dairy products, it’s prone to competition from other firms that are in the same industry (Ho, 2014). This makes it be more open eyed in checking all the areas it can improve to beat the competitors. Competition poses a great challenge to firms since they are not earning 100% profit from the market. Customers are divided among the competitor thus making it not to be able to receive maximum profits.

Some of their competitors may be more adamant and willing to take risks during harsh economic conditions, this way; the productivity of the firm is affected since it may not be able to compete with the other firms. This is a key issue that the firm should work on in that; it will not be left out even in such times. A firm needs to stay in line in order to attract customer loyalty. Economic seasons such as boom which are the peaks are among the best times for any organisation as they are able to maximize profits.

 

Social Factors

This relate to the habits of people in relation to their consumption of food. For instance, some people change their behaviours in eating ((Ho, 2014). They may opt healthy eating especially when they want to lose calories. An organic company, therefore, cannot be able to meet all the demands that their customers need. Therefore, this leads to the competition problem as explained above. Since customers have differing tastes and preferences, it’s not possible to satisfy each taste. Some customers may prefer yoghurts from the competing firm, thus making Rachel’s Organic fail to meet and capture a hundred percent of customers.

Diversity of products should be among the major goals of the company in order to meet customers at their different levels of demand (Ho, 2014). In a new country, the trends may be different from the origin country. This could be major hindrance to the success of the firm in the new areas. If the organic firm wants success; it should conduct a survey on the tastes and preferences of the majority of people living in the countries. This ensures that production of products such as yoghurt is in line with the preferences. With diversification, more success is likely to be attained in Europe and Asia.

Technological factors

New technological advancements can pose a great threat to the functioning of the organic firm. When the other firms are more advanced, then there is mostly competition with the major competitors. If a firm is not highly advanced, then competition may be tough on its side. Therefore, the organic firm needs to advance its technological capabilities in that it will not be left far much behind by the other firms. This way, it will be able to have a place in the market. When looking at technological advancement, the firm should carefully analyze all the available advancements in the countries they want to invest in. This will ensure that it will keep up with the pace hence reducing competition. I can also add more advancement in that it will boost itself in the new markets (Ho, 2014).

Environmental factors

The organic firm has to comply with the environmental conditions that have been set. For example, since it’s a food processing company, factors such as sewages should be considered. Disposal of products should be keenly investigated (Ho, 2014). The company should maintain a healthy and clean environment at all costs and time. When the company is looking into management of issues affecting operations, it should consider all the rules relating to the environment in the new areas they want to invest in. This way, it will not violate set conditions while in the new areas.

Legal factors

The brands being offered by the firm have to comply with legal laws and requirements in order to continue with their operations. Laws such as environmental protection and labour laws have to be followed by the firm so that there will be no deviance from the rules and regulations that are set by the government or any other regulatory bodies. Therefore, as the company seeks to advance its operation Europe and Asia, it should be fully aware of the legal procedures in these countries since they will to operate under them. This will help avoid conflicts between the firm and the authorities in those continents. When the rules set are followed, it becomes easier to do business without fear.

 

References

Hamm, U. and Gronefeld, F., 2004. The European market for organic food: revised and updated analysis. The European market for organic food: revised and updated analysis.

Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), pp.6478-6492.

 

 

 

 

 

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