PEST Analysis Summary Industry

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Generally, analysis of Porter’s five forces is to help the companies access the nature of an industry’s competitiveness and develop corporate strategies accordingly. Besides, this framework allows a business to identify and analyze the important forces that determine the profitability of an industry (Emmerich, 2014). Porter’s five forces are divided into horizontal and vertical forces. Horizontal forces consist of threats outside of companies such as, threat of new entrants, threats of substitutes and competitive rivalry. While for vertical forces are threats posed by the bargaining power of suppliers and bargaining power of buyers (Zideate, 2015). First of all, New Zealand ‘s dairy cooperative was forced by New Zealand’s Government in 1990 …show more content…
New Zealand’s dairy industry involves with a range of stakeholders, including farmers, government officials and the press (Coriolis, 2010). Apart from China, there are a few potential markets in Asia that focusing on existing consumer and food product as well as new development in nutritional products as well. Here is the PEST analysis and competitor analyses for three potential markets in Asia. PEST analysis is an acronym for Political, Economic, Social, and Technological and it helps the company to determine factors that will affect the performance and activities of the business in a long run (Makos, 2013). In Asia, political issue matters a lot in any business situation in terms of restriction about the trademarks, bio diversity, quotas arguments and labeling action in dairy. Sometimes there might be a lack of clear overarching central government national priorities under which these regulations. A different environment such as foreign currency and changing rural environment will affect the economic. Fonterra should be aware of the competition between high quality productive rural lands and housing. It is important for Fonterra to meet their growth targets as well as continue merging of suppliers and customers are the main economic factors to be aware of. Social factors are usually tied to demographics. Besides, it depends on the rapid increase in needs of consumer markets, demand in healthy and nutritive dairy milk products. Furthermore, cross-cultural communication in Asia will play a critical role as a global market and to manage local labour force as well. Nowadays, there are many new innovative technology affecting the dairy production and to upgrade the quality and the quantity in dairy production line. With the help of the new technology, it can bring down the production cost by indirect heating and cooling system for the trucks

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