PESTEL Analysis of Yorkshire Dales Meat Company

Certain external factors affect the marketing and strategic planning operations of Yorkshire Dales Meat Company. PESTEL analysis can be used to identify the external forces which influence the company’s performance.

Factors in the external environment of an organization that could influence its strategies include: political, economic, social, technological, legal and environmental factors. The PESTEL factors affecting Yorkshire Dales Company are described in details below.

Political factors

One of the political factors that influence the strategic planning and operations of Yorkshire Dales Cheese Company is government stability. Ireland, UK and USA where the company operates its business have stable political structures and activities which do not interfere with businesses in the market. UK is a sovereign state governed by a constitutional monarchy with a parliamentary system (CIA World factbook, 2013). This monarchy system manifests a stable political environment for businesses such as Yorkshire Dales Company where there are no unrests or misunderstandings that may impact negatively on the business. The second political factor that affects Yorkshire Dales is the European Union Trade Bloc. The EU has enabled UK to trade with neighbouring countries. This trade has allowed foreign food companies to enter UK market and provide competition for the company. This reduces profitability of the company, and it is one of the reasons why Black Barrel Cheese product failed.

Economic factors

The economic conditions of the UK influence the operations of the company and buying behaviours of customers. IMF (2009) ranks UK at position 6 in the world in terms of economic performance. It is currently the second largest economy in Europe after Germany with a PPP of $2.375 trillion. The Agricultural sector of the UK is also highly intensive and mechanized; producing about 60% of food needs in the UK. This indicates that the country is able to provide enough raw materials for the Black Barrel cheese brand at low cost because they are found within the UK in abundance. The Euro-zone debt crisis caused economic problems to the UK; hence affecting businesses in UK negatively. In 2011, the value added tax increased from 17% to 20% (CIA World Factbook, 2013). This increases the costs of operation of Yorkshire Dales Cheese Company. This is one of the reasons why the business failed.

Social factors

UK population is made of affluent consumers who enjoy food. The demographics of the country indicate that the largest population is made up of people aged between 25-54 years – 41.1% (CIA World Factbook, 2013). This group of the population enjoys a good taste on food and drinks. In this regard, consumer tastes are in favour of the company’s cheese brand. Another social factor that influences Yorkshire Dales Cheese Company is health. Customers demand food products with low fat content. Obesity rate in UK in 2008 was 26.9% (CIA World Factbook, 2013). This indicates that Yorkshire Dales Cheese Company should produce food products with low fat content to avoid obesity and meet the needs of consumers.

Technological factors

Technology in UK nowadays affects businesses in all economic sectors. New systems and innovations affect the food industry. Technology has enabled cheese producers to enhance dual purchasing whereby two types of cheese can be purchased. This technology can be combined with online purchase strategies to enhance delivery of various purchases to the desired destinations of customers; including their homes, workplaces and travelling destinations (Drake, 2008). Technological advancement in food retail industry is an important aspect of increased sales of food products.

Legal factors

There are various legal aspects affecting the performance of Yorkshire Dales Cheese Company and the Black Barrel brand. These include legislative structures and taxation policies. Generally, legal structures are favourable for business operations in UK in general because they allow for free competitive markets where market players are allowed to interact and influence factors such as prices and quality. In terms of taxation policies, UK has increased its value added tax from 17.5% to 20% and corporation tax is expected to reduce to 21% by 2014.

Environmental factors

The UK has initiated and implemented environmental policies to promote an enabling and sustainable environment which supports effective business operations. The use of reusable bags in UK increased from 71% to 74% in 2010. These environmental-friendly activities by the government have led to reduced pollution by food companies which provide packaging for their customers. Yorkshire Dales Cheese Company is one of the companies which package its products, and it should make use of reusable bags in order to make the environment sustainable for future business operations.

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