As consumers continuously moving towards healthier snacking, a large majority of major players are taking advantage of this opportunity to innovate products in natural and organic arena. In today’s time there are lots of snacks available in the market like (crisps, corn flakes, bread, butter, chocolates etc). (Ibis world). The industry for snack food is driven by profit minded people. The snack food industry aggravates around a billion dollar every single year. It keeps on increasing since it has turned into a huge market with a lot of prospects.
A lot of large corporate companies fight against each other to get the largest share in the snack food business PESTLE ANALYSIS: (for definition see appendix) There are many factors in the macro-environment that will effect the decisions of the managers of any organization. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. To help analyze these factors managers can categories them using the PESTLE model.
This classification distinguishes between: Political factors: (for definition see appendix) These refer to government policy such as the degree of interference Economy. In every field wherever we go have breakfast there in 2005 by a European Union that they kids will not promote commitment to advertising their product was applied to such industries are lots of policies. But children are the key to success for them. European Breakfast Association (SEA) is playing a commitment to help curb obesity in Europe. 005 EX. Health and Consumer Affairs Commissioner Marko’s Sprouting the food industry that the product is the sugar, fat and high in salt children (HESS), or full alert to face the law is ad should be banned. Al major food and beverage companies in print in December 2007 and the end of 008 to run off all the junk food advertising on television over the Internet, with the following pledge to the European Union agreed to lower ass. And it is threat for an industry because they can’t promote children.
Read phonetically (Byrne, 2010) Economic factors: (for definition see appendix) These include interest rates, taxation changes, economic growth, inflation and exchange rates. It is greater threat for an industry because the prices of the products are rising . Len addition to macroeconomic factors affecting the UK, the makers of savory snacks their wheat, corn, flour and potatoes as its special robbers of rising costs, as well as crude oil, and are facing increasing the amount above the ground for befoul production.
The savory snacks buyers feeling the pinch on their disposable income to be totally unwilling to buy snacks (although they may opt for lower premium cost variants may be), the manufactures for the prices to a level may be forced to increase the demand for results to price sensitive (keynote, 2008) Social factors: (for definition see appendix) Changes in social trends can impact on the demand for a firm’s products and the availability and willingness of individuals to work.
Yes it is a threat for snack DOD industry because if people stop eating snack food then it will effect on all the factors related to industry. Most adults in England are overweight, and nearly 8 million total in five are obese. The prevalence of obesity is increasing world wide, and, in England, has almost tripled in the last 20 years. Most likely causes a rapid change in eating patterns, combined with sedentary lifestyles are. Obesity contributes to chronic illness and premature mortality by causes more human suffering, and the INS to a substantial cost to the wider economy entails.
Comptroller ands Auditor General a report deaths and 30,000 years on average years of life to a little associated with obesity. On a conservative basis, the cost to the INS patient care and sickness absence at E 0500000000 a year in costs for the wider economy, for example, estimated at E Technological factors: (for definition see appendix) Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organizations providing the products.
It is a greater threat for industry because as obesity increases so the people will not use so much snack food industry. Globalizes modern food processing , marketing and distribution techniques; global mass media diet ND activity- tech leisure , transport and work to reduce energy expenditure during the innovations have been effected by rapid changes around the world. Increase rapidly in rural areas is on all continents. The resulting global increase in obesity burden of obesity is being increasingly poor.
The goods, trade in services globalization and technology direct link between diet and activity can be linked to anything directly, a strong case for this stage of nutrition transition as a major force behind globalization implies for the role exists. (woolgathering,2003) Environmental Factor: (for definition see appendix) Environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. It is threat for an industry. 009 general food industry was a particularly difficult year, as consumers cut spending back during the worst recession seemed. Snack foods market has been difficult potatoes, peanuts and sunflower oil as the commodity price for the items hit by massive rises. As a result, much corporate causality in the market those competitors have been quick to snap. As any recovery from recession is expected to be gradual to have been seen . With the use of sufficient revenue to buy breakfast for companies to take advantage of the crisis in the industry, leading to further consolidation is likely.
Walkers snack food dominated by a consolidation in the industry also seems possible in the future, especially as the recession continues and businesses struggle to survive. Resulting increase in the market value in the near future do not expect the same level constant , but the key factor for the development of market developments made by manufacturers and healthy raw materials through the process of cooking fat and to reduce salt levels will include irking lunches and snacking occasions , such as increased . (keynote,2010) Legal factors: (for definition see appendix) These are related to the legal environment in which firms operate.
In recent years in the UK there have been many significant legal changes that have affected firms’ behavior. Responsible businesses not only abide by the law, they seek to create standards above minimum requirements. Food labeling Mac Cain to number of legal factors to be aware of governments Food Standards Agency recommends that food companies traffic light labels help to put out people understand what they are buying and to help them make the right hooch: Red fat and salt content as the high level represents. Green represents low levels.
Mac Cain has put its British products to consumers concerns about healthy eating as a reaction to traffic light labels. Mac Chain’s potato products to all of the saturated fat and its products shoe a red label are able to display the green label. Further guidelines on the label are featured daily amounts (Gas) which show how much fat, sugar and saturated salt contains every product. Mac Cain takes these responsibilities very seriously. It is important to build a reputation for honesty and fair play. And it is greatest opportunity for industry. Ethnicities,2010) PORTER’S FIVE FORCES: The objective of such an analysis is to investigate how the organization needs to form its strategy in order to develop opportunities in its environment and protect itself against competition and other threats. (LYNCH. R, 2009). The Degree of Rivalry : (for definition see appendix) It is greater opportunity for industry that their growth is raised every year. Retail sales of snack foods in 2007 were worth an estimated 2. 1 ban, having risen 0. 4% over last year is just the price.
Market growth driven by sales of larger pack sizes s (Indulgence products, specifically) to share, but also consumers of healthy products faster, (NYPD) in which there has been considerable new product development by Resulting in innovative products such as baked Walker. Factors such as cholesterol, low sugar, whole, low sodium, vitamins and minerals all increase in importance in 2007/2008, focusing on the link between Are junk food and obesity with its associated health risks? Accessibility of snack foods in the UK is high, around 85% for potato snacks and other savory snacks and snack nuts for around half the population is standing.
However, NYPD and high- level acute. The Threat of Entry: (for definition see appendix) Here’s is greatest threat of entry for biscuits manufacturer. As these days people uses more snacks instead of taking biscuits There’s also the threat from outside sources. Retailers such as Tests are already turning to global sourcing for their own brands. Cost bases in countries such as Thailand and Sir Lankier Lankan (sir© long aka) [Sinless,=resplendent land], formerly Ceylon, ancient Taproot’s, officially Democratic Socialist Republic of Sir Lankan, island republic (2005 est.. Click the link for more information. E more competitive than in the U pop. K. Resource believes that “Retailers need to look at snacking in an holistic sense, not just biscuits or confectionery. The multiples are testing some concepts hut where the change is really coming from is the independent retailers who can implement change and test new ideas very free library, 2011) The Threat of Substitutes: (for definition see appendix) This is a threat for an industry that they are numerous substitutions. The chocolate and cocoa industry must complete with numerous substitute products that can threaten the industry’s profitability.
Alternate cooking flavors are a substitute product to chocolate and cocoa. These flavors include vanilla, lemon, and butter or mint flavoring. These flavors can be used by industry customers that use chocolate and cocoa products of the industrial and cooking use another significant category of substitutes is snacks. Many non-chocolate snacks are available, such as peanut butter, fruits, potato chips; ice cream etc. There is no need to stick with a specific snack other than personal preference.
Further, many consumers consider chocolate unhealthy a willing to substitute it readily. (Washington IV, 2008) Buyer Power: It is greatest threat for an industry. The food business, unlike the snack food production industry, is recession-proof since people have to eat… High customer loyalty, coupled with these investments, has contributed to high profit margins and sales growth. Consumers are increasingly becoming price sensitive and more likely to shift to private labels, make purchases on promotion, and/ or simply decrease snack spending during the current recession.
Fluctuating commodity prices are also a threat for snack food manufacturers. Nonetheless, aggressive marketing tactics and new product innovations coupled with strong rand loyalty should soften the negative effects of the current crisis. (Chatham, 2009) Supplier Power: Supplier power, buyer power is a mirror image. Consequently, analysis of supplier power, usually relative size and concentration of suppliers relative to industry participants and the second focuses on the degree of variation in information first supplied.
Customers usually made for each of the buyer’s price difference charge different prices in line with potential sign that the market is characterized by high supplier power and low buyer power (Porter, 1998) by the same time. Suppliers power in an industry is high when there is only one supplier like for Walkers Company if there is only one potato supplier then supplier has a greatest power and they can use their power. And if there are lots of supplier’s for an industry then their power will be low.
If supplier power is high then it will be a threat for an industry and if the power of supplier is low then it is a great opportunity for an industry. CONCLUSION In today’s time people don’t have so much time to prepare food for them. Everybody is busy in this whole world. So mostly people use snacks . Although hose snacks are harmful for their body but they often intake these things . There are lots of snacks available in the market like crisps, bread, chocolate etc. There is very big snack food industry in J.
Lots of factors affecting this industry some bring opportunity and some of them bring threat for the industry. Like in today’s time people using lots of snacks instead of healthy food and it will be a greater threat for an industry . Because day by day obesity problem is increasing in UK . On the other there is opportunity for an industry like its sales going on increased every year. And industry’s economic condition is going to be better than previous years. In today’s time lots of industries are compete ting with this industry and this is a greater threat for industry.
Appendix DEFINITION OF SNACK FOOD INDUSTRY This industry comprises manufacturers that produce snack foods, including potato and corn chips, pretzels, popcorn and other similar snacks. This industry does not include cookies and crackers (IBIS World report), bakery products or cereal and granola bars. The establishments in this industry primarily prepare nuts; process grains or seeds into snacks; or manufacture chips, popped popcorn ND similar snacks. WHAT IS PESTLE ANALYSIS? A PEST analysis is one of them that is merely a framework that categorizes environmental influences as political, economic, social and technological forces.
Sometimes two additional factors, environmental and legal, will be added to make a PESTLE analysis, but these themes can easily be subsumed in the others. The analysis examines the impact of each of these factors (and their interplay with each other) on the business. The results can then be used to take advantage of opportunities and to make contingency plans for threats when preparing cuisines and strategic plans (Bars, 1991; Cooper, 2000). Political factors: These refer to government policy such as the degree of intervention in the economy. What goods and services does a government want to provide?
To what extent does it believe in subsidizing firms? What are its priorities in terms of business support? Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system Economic factor: These include interest rates, taxation changes, economic Roth, inflation and exchange rates. As you will see throughout the “Foundations of Economics” book economic change can have a major impact on a firm’s behavior.
For example: – higher interest rates may deter investment because it costs more to borrow – a strong currency may make exporting more difficult because it may raise the price in terms of foreign currency higher wage demands from employees and raise costs – inflation may provoke higher national income growth may boost demand for a firm’s products Social factors: Changes in social trends can impact on the demand for a firm’s reduces and the availability and willingness of individuals to work.
In the for example, the population has been ageing. This has increased the costs for firms who are committed to pension payments for their employees because their staffs are living longer. It also means some firms such as Sad have started to recruit older employees to tap into this growing labor pool. The ageing population also has impact on demand: for example, demand for sheltered accommodation and medicines has increased whereas demand for toys is falling Technological factors: New technologies create new products and new processes.
AMP players, computer games, online gambling and high definition TV’s are all new markets created by technological advances. Online shopping, bar coding and computer aided design are all improvements to the way we do business as a result of better technology. Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organizations providing the products. Environmental factors: Environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance.
With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider. The growing desire to protect the environment is having an impact on many industries such as the travel and transportation industries (for example, more taxes being placed on air travel and the success of hybrid cars) and the general move towards more environmentally friendly products and processes is affecting demand patterns and creating business opportunities. Legal factors: These are related to the legal environment in which firms operate.
