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Pestel

The PESTEL analysis identifies 6 key external factors impacting the firm: 1) The implementation of the Goods and Service Tax led to higher taxes being levied on biscuits, forcing Parle-G to reduce grammage. 2) An economic slowdown reduced consumer consumption, negatively impacting fast-moving consumer goods like Parle-G. 3) Changing social preferences toward healthier foods have reduced demand for Parle-G in urban households. 4) Technological innovations impact information sharing and building customer relations. 5) Environmental factors like climate and resources influence sustainable and organic product usage. 6) Legal requirements around layoffs and retrenchment may financially burden Parle if they reduce employees.

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306 views2 pages

Pestel

The PESTEL analysis identifies 6 key external factors impacting the firm: 1) The implementation of the Goods and Service Tax led to higher taxes being levied on biscuits, forcing Parle-G to reduce grammage. 2) An economic slowdown reduced consumer consumption, negatively impacting fast-moving consumer goods like Parle-G. 3) Changing social preferences toward healthier foods have reduced demand for Parle-G in urban households. 4) Technological innovations impact information sharing and building customer relations. 5) Environmental factors like climate and resources influence sustainable and organic product usage. 6) Legal requirements around layoffs and retrenchment may financially burden Parle if they reduce employees.

Uploaded by

Sruthi D
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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PESTEL ANALYSIS

In order to understand the external forces impacting the firm’s decision making, PESETEL
analysis is crucial.

1. POLITICAL FACTORS
The main Political factor that impacted the firm in recent times is the roll out of
Goods and Service tax where in a unified tax is levied on the two notable categories
of biscuits, one being the below Rs.100 per Kg and the other being the above Rs.100
per kg. Previously the former category, under which Parle-G falls, was exempted
from excise duty and therefore could be strategically priced at Rs.5 per packet for a
70-gram packet. After the GST roll out, due to a unified tax of 18% on both the
categories, the company had to reduce the grammage in order to compensate the
extra tax levied. This primarily impacted the sales.

2. ECONOMIC FACTORS
One of the other reasons for Parle-G’s huge demand crunch is the economic
slowdown which started at the beginning of this year. An economic slowdown is a
condition which hugely effects the consumption. In this case Parle -G being a fast-
moving consumer good is severely affected.

3. SOCIAL FACTORS
Parle-G was one such brand which was more of an emotion and this is how it
sustained for about 80 years. There are a couple of factors that may have affected
this legacy of Parle G:
The increasing awareness on fitness and health foods nowadays are forcing people
to choose fiber and nutritious biscuits. In such a setup Amul claims that its cookies
are made of 100% dairy fats unlike the other brand which use vegetable oil (which
apparently isn’t good for health). This can be one of the possible factors for Parle-
G’s reduced demand in the urban households.
4. TECHNOLOGICAL FACTORS
These factors are the innovations in the technology which helps a firm in information
Sharing, sales forecast, order tracking, building customer relations, diffusion of
technology. And it also tells about the obsolescence of the technology used by
company.

5. ENVIRONMENTAL FACTORS
These include the environmental aspects such as climate, weather, resources as they
are present in scarce we have to make use of sustainable products, organic products
usage
And less emission of harmful gases which leads to global warming.

6. LEGAL FACTORS

According to lay-off retrenchment under industrial dispute act 1947, the company
might have to pay compensation for the employees it is going to lay off. This might
fall heavy on Parle’s pockets.

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