Vithitis in the beverages industry, as an alternative to sugary drinks but competesin the same market within the health beverages niche. In this assignment I will apply PESTLE andPorter’s five forces to Vithit as well as the beverages industry. I will also analyse Vithit’s strategy forinternationalisation by looking at Greiner’s model of how organisations growand evolve and Mintzberg’s five natural configurations. PESTLEstands for political, economic, social, technological, environmental andlegal.
Political is concerning theopportunities and threats placed on a business by political institutions suchas the government. The main influencesare government policies, trading policies, grants, lobbying, interest groups,political trends, taxes and bureaucracy. Economic is regarding economic policies and economic structures. The main influences are the local economy,taxation, inflation, interest rates, economic trends, industry growth,international trade and exchange rates.
Social refers to the cultural aspects of life, beliefs and trends thatwill affect a products sales and popularity. The main influences are, demographics, media, brand, lifestyle trends,consumer attitudes and opinions, ethics and advertising. Technological is concerning the technologicalaspects of business, the barriers and incentives. The main influences are new technologies,legislation, research and innovations, ICT and competitor technologydevelopment. Environmental is relatingto the opportunities and threats the environment has on the business. The main factors are environmentalregulations, reducing carbon footprint and impact of weather. Legal relates to the laws, regulations andlegislation that affect the running of Vithit. The main factors are Irish legislation, international legislation,consumer protection, health and safety regulations, competitive regulations andindustry-specific regulations.
PESTEL isa way to analyse the strategic planning of a business. It looks at the external influences on abusiness, so they can plan accordingly and be successful in the long run. It helps the business with their strategicplanning, marketing planning, organizational change, research and productdevelopment. Porter’sfive forces framework consists of the main elements of competition, thebargaining power of suppliers, threat of substitutes, bargaining power ofbuyers, threat of new entrants and competitive rivalry.
The goal of the corporate strategist is tofind a position in the industry to best defend the company and to takeadvantage of these forces. The impact ofeach of the forces vary depending on the industry but their collective strengthdetermines the overall profit potential. They highlight the strengths and weaknesses of the business and showwhich areas need to be adjusted for maximum results. The weaker the forces the greater theopportunities for higher performance.