MGMT3006 Strategic Analysis For Forked River Brewing Company
Jan 28,22MGMT3006 Strategic Analysis For Forked River Brewing Company
Question:
Conduct a PEST analysis of Forked River’s industry in Ontario at the time of this case.
Answer:
Introduction
PEST analysis of Forked River’s industry in Ontario
Political Factors
Political factors play a predominant role in the investment decision because it influences the business cost and the overall sustainability.
Government budget size
The government at the national and the local level are operating at a deficit budget that boosts the growth in the short term but might lead to the increment in inflation over the medium time frame. The rating of bond of the national government is its investment grade. The country comprises of a happening civil community society and the Forked River must establish bridges and look after cooperation. Civil society groups are dominating not only in the policy faming process but also the building of society (Kim & Mauborgne 2017)
Regulatory practice
The streamlining of the regulatory practices with the global standards have helped the country in ensuring better business and proper ranking. The operation of the forked business is not prone to any risks from any specific unrest or militant operations (Stallkamp, Plummer & Schotter 2018). Political Governance System – As per the information contained in the Forked River, Craft Beer is an upcoming industry and it appears that the country has a well defined stable political system. Hence, Forked River can build plans based on the familiar political surrounding.
Economic factors
Disposable income of the consumer: The country’s household income has enhanced in the last decade as compared to the USA market where the household income is below the 2007 levels and did not increased since the early 1980’s. Hence, in lieu of it, Forked river can grip such trend in terms of the expansion of the market beyond the traditional customers through the employment of the differentiated marketing campaign.
Shifting demand – The services share in the economy is constantly enhancing as compared to the share of the manufacturing goods and the agriculture domain. Moreover, the tax split culture of the Republican government has enhanced the deficit and lead to the trouble of fiscal for the overall economy (Newton 2018).
Trend of GDP – When the rate of GDP growth is higher it depicts a strong demand in the economy. Hence, Forked River can leverage the trend through the expansion of the product and through target of new customers. Another mechanism to start is mapping the change that is the consumer’s buying behaviour and the value proposition.
Social Factors
Social factors like the trend of demography, the structure of power in society, and the workforce’s participation have a significant impact on the country’s economy, followed by the availability of the talented crew.
Healthy and safety
The attitude towards health and safety is majorly projected in the products quality and the structure of the cost of manufacturing. Forked river comprises of strict rules for health and safety; hence in the case of emerging economies, it might need to compete with the rivals who does not have high structure of cost (Newton 2018)
Society power structure
Forked river need to evaluate the power structure and how it impacts the demand in the economy. For instance, the US power structure is progressing towards the older generation because that generation comprises of higher disposable income in comparison to the younger ones.
Trend in demographic
The trend in demographics is one of the vital factors in forecasting the demand in the economy. For instance, the population of the USA and EU is progressing towards the older stage and the product demand is catering to such segment. Hence, in lieu of it, Forked River must consider the trend in the demography as the development of new products and the enhanced features will help this segment. Due to the ageing population there will need of less intensive products (Kim & Mauborgne 2017).
Technological Factor
Research and Development Investment level
If the level of investment is high in the technology development sector, then chances are more of developing a self-sustaining ecosystem that drives innovation. Forked River can bank on the scenario to have the best workforce in the business (Stallkamp, Plummer & Schotter 2018).
Production cost and trend
Forked River needs to evaluate the trend associated with the cost of the production and the automatization levels. It is believed that the sector will be highly influenced by technological innovation in the near future. Furthermore, the laws and culture of IPR licensing and other digital assets need to be evaluated carefully that can enable Forked River to avoid IPR thefts.
Environmental Factors
Environmental Regulation has a significant influence on the cost dynamics of the overall industry.
Stressing upon the Renewable Technologies
It is important for Forked river to understand the portion of the budget that will be spent on renewable energy sources and how this can be moulded into a well-defined competitive strategy.
Consumer Activism
The Forked River needs to know the consumer activism level concerned with the environmental concern. This will help Forked River in the development of products that is environmentally friendly and unblocking various problems.
Moreover, the role of the environment standards enforcement agencies is vital in the norms safeguarding. However, often in the emerging countries, such agencies delay the process for bribes. Hence, Forked River must be acquainted of the practices prevailing in the country.
Recycle management and waste policies
It is important to observe and understand the recycling policies in the market that are prospective and the manner in which Forked can adhere to such policies.
Waste Management
It is important to know the waste management policy in the market that is prospective and how Forked River can meet the requirement of the waste management in the market.
Legal Factors
Judicial system transparency
Transparency is of utmost necessity to ensure fair and consistent decision-making. If the process seems consistent, Forked River needs to plan the action with higher conviction.
Following the common law – It is essential to understand whether the country is following common law that should be uniform for every party irrespective of domestic or international. If any ambiguity appears in the process of judiciary, then it would be difficult for the operations of the Forked River.
Securities law – the securities law in the country needs to be considered and the scenario for listing the company on its national or regional stock exchange.
IP protection: Forked River should evaluate the protection level that the IP rights get under the legal system of the nation.
Laws of data protection
Forked river must understand the country’s data laws and ensure that they must be adequately complied. For instance, majority of the countries from the EU require that the EU citizen data must be saved in the countries of the EU.
Settlement time in the court proceedings
The country might have the strongest laws however it does not require that the same can be enforced in due time span. Forked River needs to conduct a primary research to understand the proceedings and conclusion of a case in another country. Further, the legal challenges that the company can face needs to be understood. Moreover, the business laws prevailing needs to be evaluated for better operation
References
Newton, W. (2018). Brews News: Forked River fiddles with fruit flavours. Retireved from: Brews News: Forked River fiddles with fruit flavours
Max Stallkamp, Larry Plummer, Andreas Schotter (2018). Forked River Brewing Co.: Craft Beer Entrepreneurship in an Evolving Industry Harvard Business Review Case Study. Retrieved from: https://www.thecasesolutions.com/forked-river-brewing-co-craft-beer-entrepreneurship-in-an-evolving-industry-2-151006
- Chan Kim and Renée Mauborgne (2017)Blue Ocean Shift: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth. Retrieved from: https://www.forbes.com/sites/mattsymonds/2017/09/26/blue-ocean-shift-steps-to-inspire-confidence-and-seize-new-growth/?sh=3946352818d5