Pestel analysis
• Political
It is about the level of degree that the government policies have an effect on an organization. One of the impact of political factor is the change of the government. When a new government is formed, they have set new policies which is abolishing the old policies by the former government. For an instance, a new Malaysian government was formed in May 2018 and they abolished the six percent GST that was introduced in the reign of the former government on the 1st June 2018. This change will benefit both the Goodday Milk Company as well as consumers because the decrease in price will increase the demand.
• Economic
It is about how the economy of a specific country has an impact for the organization which are operating at that specific country and how they generate profit. A consumer’s disposable income plays a big part in affecting the business of an organization. If the disposable income of a consumer is low, they will have less money to spend and this can have a negative effect on the company. For an example, consumers will try to save their low disposable income and try to minimize the consumption of milk or even might go to the extent of stopping it.
• Social
It is about how the belief, attitude, culture and mindset of people from different countries affect an organization’s business. Lifestyle trend of individuals is one of the social impact. Most people desire to live a healthy lifestyle. For an instance, when choosing a milk product to consume, consumers will often go for full cream product because it’s healthier while avoiding the full fat milk product because they have the perception that full fat milk can lead to obesity and this will have a negative effect on the market for full fat milk product. Another impact of social factor is belief. For an instance, Indians often use milk while performing rituals and prayers. Since, Indians is one of the main race in Malaysia, this will benefit the Malaysian market for milk products.
• Technology
It is about how the continuous development of technology affect an organization’s business. Development of technology helps produce goods and services faster as well as distributing them. It can also help to communicate with our target market. For an instance, the introduction of automation milking means Milk Company can save time and reduce human labor. It can also monitor the cows to study about their health and nutrition. By this method, it can identify which cows are healthy for the milking process and the unhealthy cows will be treated. Moreover, the development of technology also helps the product to have a better reach to the target market. The growing usage of internet by the community means Goodday Milk can advertise their products online and on social media.
• Environment
It is about how the natural components identifies with the biological and ecological factors that will affect the demand for an organization’s product and how that business operates. The biological factors plays a big part in affecting the production of milk. For an instance, identifying the species of cows to purchase is important because different breeds will produce different quantity of milk as well as quality. The age of the cows is also an important factor because younger cows will produce a higher quantity of milk than the older ones. The carbon footprint of milk industry is massive and it is because of what the cows are fed. It takes a considerable measure of feed for cows to produce milk and crops must be developed some place. As a result, the process of raising and fertilizing these crops will result in huge amount of greenhouse gases.
• Legal
It’s about the legal factors relating to the laws, regulation and legislation that will affect the way the business operates. It is legally a requirement for products that can be eaten to have a basic labelling such as food identification which needs to have the designation and description of the food, the content about the minimum net weight or volume or the number of the contents of the package, the ingredients which is used, the details of the suppliers and the nutrition labelling. Besides, since Malaysia is an Islamic country, it is legally a must to obtain the Halal certificate and the logo must be printed on the product.
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