Pestel Framework
The PESTEL framework provides a comprehensive list of influences on the possible success or failure or failure of particular strategies (Johnson, Scholes and Whittington 2008). The political environment (Refer Section 1 in Appendix 01) does not favour Fonterra’s operating environment with heavy control over milk powder pricing. Political figureheads at times lead the public to perceive that multinational dairies are working towards destroying the local dairy industry. With the ending of a 26-year old war within the country there is stability in the political environment which in normal cases encourages foreign investment. However the government’s policies and tight regulations towards foreign investment and trade, creates an unfavourable environment for operating multinationals like Fonterra. Noted.
In the economic front (Refer section 2 in Appendix01), with base commodity prices being reliant on global trends and heavy fluctuations on exchange rates, budgeting for the purchase of full cream and skim milk from New Zealand proves difficult with currency fluctuations most often surpassing budgeted variances. Subsidies by the government to selected local dairy companies also give unfavourable advantage to them over Fonterra.
Socially, similar to world trends, the aging population in the country has opened up new opportunity for Fonterra to move in with its Anlene product, coincidentally at a time when mature markets like full cream milk come under heavy smear campaigns with global issues such as the melamine scare in China. Such incidents create negative perception on all powdered milk products that not only impact short term sales figures but also tarnish the brand loyalty Fonterra has established throughout the years (refer section 3 of Appendix01).
When we analyse technological trends and their implications on Fonterra (Refer section 4 in Appendix01), many technological improvements ranging from foraging, nutrition, and flavouring to packaging, has
In the economic front (Refer section 2 in Appendix01), with base commodity prices being reliant on global trends and heavy fluctuations on exchange rates, budgeting for the purchase of full cream and skim milk from New Zealand proves difficult with currency fluctuations most often surpassing budgeted variances. Subsidies by the government to selected local dairy companies also give unfavourable advantage to them over Fonterra.
Socially, similar to world trends, the aging population in the country has opened up new opportunity for Fonterra to move in with its Anlene product, coincidentally at a time when mature markets like full cream milk come under heavy smear campaigns with global issues such as the melamine scare in China. Such incidents create negative perception on all powdered milk products that not only impact short term sales figures but also tarnish the brand loyalty Fonterra has established throughout the years (refer section 3 of Appendix01).
When we analyse technological trends and their implications on Fonterra (Refer section 4 in Appendix01), many technological improvements ranging from foraging, nutrition, and flavouring to packaging, has