Samsung Inc. is a Korean electronics company currently engaged in the design, manufacture and marketing of mobile communication and media devices, electronics, computers and portable digital music players, as well as related software, accessories and third-party applications. The company reported revenue of US$182,595 million during the fiscal year 2015 (Samsung 2016).
In 2016, Sainsburys, the UK 's second largest food retailer completed the acquisition of Argos and Habitat in a move designed to increase its non-food offer and retail space. In 2018, it announced a possible merger with third placed rival Asda in a move designed to increase its buying power and market share to make 'Sainsdas' the biggest supermarket chain in the UK. Using Pestle and Swot, this report examines the food retailing industry in the UK to reveal the major macro trends and competitive forces driving and shaping it, resulting in losses and gains for different players.
2017 was a challenging year for the United States carbonated soft drinks (CSD) market, which has continued to decrease for nine straight years as total sales and volume of sugary sodas consumed by Americans has continued to decline for 11 consecutive years. According to Kell (2017), this is part of a long-term trend driven by consumer fears over the use of high calorie sugars and artificial sweeteners such as high fructose corn syrup and aspartame, two of the most controversial artificial sweeteners often used in diet colas. The use of such sweeteners is also the reason why sales of even diet sodas, supposed to be the industry saviours, continued to dip in 2016 with Diet Pepsi seeing a volume decline of 9.2% compared to 4.3% for Diet Coke as consumers opt for healthier options (Kell 2017).
With carbonated drinks like Pepsi Cola losing market share to non-carbonated drinks such as bottled mineral water, many food and beverage firms including PepsiCo are remaking their brand portfolios either through innovative reformulations of existing products or adding new product categories in order to tackle new food and beverage trends (Kell 2017b).
In the following section, we will identify the major food and beverage trends that are driving PepsiCo’s external market environment including the US soft drinks industry in general. This will help us understand how the beverage firm can utilise its brand competencies so as to take advantage of macro environmental opportunities while at the same time neutralising emerging threats that may undermine its progress.
Pestel is only a starting point when analysing the macro business environment of firms since other frameworks such as Porters Five Forces and BCG are also used in conjunction to assess how firms such as British Airways can utilise core resouces and competencies so as to take advantage of opportunities while neutralising competition and rising threats. In this strategy report, we analyse the internal and external environment of British Airways using Pestle, Swot, Porters five forces & BCG matrix during the years 2016, 2017 and 2018.
Virgin Atlantic is a British airline carrier that is co-owned by Richard Branson’s Virgin Group [51%] and Delta Airlines [49%]. Started in 1984, it is currently the UK’s best carrier in terms of punctuality, quality and the speed of dealing with compensation claims (Morris 2016). Latest revenues for the year ending 31 December 2016 were approximately £92million on operating profits of £23 million, 0.5% increase from the previous year (Annual report 2016).
Nike is an American company that is engaged in the design, manufacture and marketing of apparel, footwear, equipment, services and accessories. The global clothing apparel market is oligopolistic with for players Nike, adidas, H&M and Zara having a combined market share of 7.0%. Considering the US footwear market, Nike accounts for 21.1% market share with major competitor adidas having 4.7% according to Statista (Statista 2018d). Various external factors have affected the growth of Nike, by using a pestle we analyze how political factors such as the US-China trade war and president Trump’s order to pull the US out of the Trans-pacific partnership trade deal has affected its growth, economic factors like low employment rate in the US can boost growth and social trends affect Nike’s growth while realizing major threats and opportunities. Using a porters five forces analysis, we identify points at which competitions has severely affected Nike’s growth.
2016 was a pivotal year for Barclays, embarking on one of its largest restructurings in history designed to make bank smaller, better capitalised, and less leveraged and more geographically anchored on its core UK and US geographic markets. The major decision to exit Africa is part of the mega restructuring. The bank had to contend with regulatory pressures as well as effects of Brexit as examples of some of the major external macro factors impacting their operational environment.
PESTLE is a business strategy tool used in strategy to analyse such macro environments and identify how future trends in the political, economic, social, technological, environmental and legal environments might impact individual organisations within an industry. Firms then study the key drivers of change behind the PESTEL factors. These key drivers of change constitute opportunities and threats in a firm’s external environment and industry which can be overcome by focussing on strengths and eliminating weaknesses. This is why PESTLE is only a starting point since other frameworks such as Porters Five Forces and SWOT have to be used in conjunction to help firms like Barclays utilise internal core competencies so as to take advantage of opportunities while neutralising threats in its industry.
Volkswagen AG may still be the world’s second largest automaker in the world after Toyota but negative macro trends and interferences from its external environment could take a toll on the company’s performance this year drastically changing the auto landscape. Such interferences include Trumps 20% tariff threat on all EU made cars which he wants implemented by November 2018. The UK, Volkswagen’s second biggest market in Europe, recently introduced a new initiative that will end sales of diesel and petrol cars by 2040. If fully implemented, at least 50% of news cars sold in the UK must be ultra-low emissions by this date. For Volkswagen and other automakers, the threat is clear; move to electric or perish. The company has also paid more than $25bn in fines and damages related to its 2015 ‘diesel-gate’ scandal, an amount that excludes the threat of future financial compensation from civil litigation.
These are some of the macro factors looked at in this report using PESTEL and SWOT to determine how Volkswagen can leverage its internal core competences like supreme innovation, engineering, manufacturing and assembly to position itself better in the future despite adverse macro influences as well as take advantage of new macro opportunities.
The UK food retailing industry is characterized by price wars, heavy discounting and increased merger and acquisition activity as seen in the recent merger of Tesco and wholesaler Bookers Group as well as the much anticipated merger of Sainsburys and Asda (Sainsdas). While a Brexit-led lull in consumer spending has played a part in creating this state of affairs for UK supermarkets especially the Big Four, it is Aldi and to a lesser extent Lidl, who have played a massive part in shaking up the UK food retailing industry. They are the only two food retailers in the UK who have been recording double digit growth rates since 2010, during a time when sales and market shares of the Big Four were in freefall. Since 2010, Aldi has increased its market share from 1.6% to 6.8% in 2018, taking it from the 11th largest grocer to now 5th and predicted to overtake Wm Morrisons. Using Pestle, Swot, BCG Matrix and Porters Five Forces analysis, this report examines the macro environment and industry structure of the UK food retailing industry to understand the forces and trends driving competition and how Aldi has been responding. While some trends such as UK consumers continuing to trade down favour it, others such as digitisation innovations and internal weaknesses including its limited product assortment, may hamper future growth in the UK and other key markets such as the US and Australia.
2016 was a challenging year for the carbonated soft drinks (CSD) market in the US which has declined for nine straight years, largely due to a decline in soda sales, part of a long-term trend that has seen total sales and volume of sugary sodas consumed decline for 11 consecutive years, as consumer worries over use of high calorie sugars and artificial sweeteners escalate. Even sales for diet sodas, supposed to be the industry saviours, continue to dip primarily due to increased scepticism of artificial sweeteners such as aspartame, a controversial artificial sweetener often used in diet colas. Diet sodas sold by both The Coca-Cola Company and rival Pepsico posted steep volume declines last year as consumers opted for healthier options. 2016 sales for Diet Coke fell by 4.3% from the previous year while Diet Pepsi was down by 9.2%. With carbonated drinks losing market share to non-carbonated drinks especially bottled mineral water, Coca-Cola is seeking to remake its portfolio under new CEO James Quincey, with strategic emphasis being placed on what American consumers are actually drinking such as bottled water or very small mini soda cans. In the following report, we will identify the major drivers of change behind Coca Cola’s external environment looking at the general trends driving the soft drinks industry in general. This will help us understand how The Coca Cola Company can utilise its brand competencies so as to take advantage of macro environmental opportunities while at the same time neutralising emerging threats that are chipping away at its success.