Oct 23, 2018 in Analysis

Pestle Analysis of The Food Industry

Political Factors

It is important for every company in food business to consider the political factors revolving around it. Political constraints imposed on imports and exports in one way or another affect the food industry (Joslyn 2012). Food producing companies in a certain country are likely to do well if the government limits the import of finished goods into the country (Heyder, Theuvsen & Hollmann-Hespos 2012). There is a significant advantage for food producing companies that are willing to sell their products outside the country (Nestle 2013). They are likely to benefit greatly from the incentives offered by the government to companies involved outside the country of business ventures (Nielsen 2010). Corruption free countries provide a good platform for food industries to do well in terms of sales and revenues. It is also evident that companies in the food industry are likely to record significant improvements in countries that have stable governments that are free from political upheavals (Lin & Yu 2011).

Economic Factors

These include the likely economic changes that are essential in helping the company to develop clear future goals and objectives (Nehir & Simsek 2012). Taxes and exchange rates are also important factors that should be looked into. In this regard, the company will not only be in position to keep track of the likely profits, but also help them to prepare diligently on any incoming losses (Rothaermel 2013). Keeping in track with economic factors helps the company to uphold favorable decisions regarding the employment rates.

Social

In the pursuit to produce food products, it is the duty of each company in the food industry to uphold social responsibilities. Companies are supposed to ensure that they put into consideration all the health factors related to the same (Carpentier & Cerf 2011). For instance, food companies must produce or deal with food products that do not pose a risk to human health. On the same, those companies will be expected to consider factors such as growing population with a certain region while putting down future expectations. The population provides the potential customers (Baert, et al. 2012). Additionally, the food industry should put down educational infrastructures that give individuals the knowledge on how to deal with food products. This is essential in ensuring that food industry has a potential workforce (Sebastiani, Montagnini & Dalli 2013).

 
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Technology

A successful food industry must be in a position to keep in touch with the latest technological advancement. Good technology allows efficiency and effectiveness during food production processes in the company (Herschdoerfer 2012). Companies that make good use of technology during food production have been seen to have more yield than those who depended only on human labor. The yields were even more when these companies used the latest technology (Hawkes & Harris 2011). Therefore, it is expected that food companies that wish to have successful ventures during food production consider utilizing a high degree of technology automation. This is not to mention keeping in touch with the emerging technology and technological advancements.

Legal Factors

Legal factors call for any company involved in production of food products to comply with different laws giving guidance on how certain activities should be conducted. According to the consumer law, it is expected that industries will give first priority to the needs of the consumer (Hao 2011). Employment laws provide guidelines in which employers must follow while recruiting employees within the company. This is to say that employees should be qualified, skilled and possess good reputation. It is against the requirements of the discrimination law for any member of the workforce in the company to look down upon his colleagues (Baert, et al. 2012). Employees must not be discriminated on grounds of gender, race, and status. Also, the safety of all employees in the company is supposed to be considered in order to make sure that they work under good conditions.

Environmental

While embarking in the process of food production, industries are expected to consider some factors regarding the environment in which the industry is found (Jiaming, et al. 2012). This is to say that certain food products are highly influenced by factors such as weather and climate (Fine 2013). There are those food products that appear in large quantities under specific climatic conditions. For instance, the company may find itself working on tomato food products during dry weather conditions (Baldwin 2012). This will be a different case during rainy seasons since tomatoes will not be produced in large quantities. Well established infrastructures tend to affect the manner in which a company conducts its activities. Good infrastructures such as road, electricity, and able machines will see the company have high yield. On the other hand, poor infrastructures will cause a lot of delays in the company leading to poor production, hence amounting to low yields (Jacxsens, et al. 2010)

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