PESTEL Analysis – Knowsia

CSME – May 2023 – L1 – SA – Q1 – Strategic Implementation

Strategies for market expansion, sustainable advantage, and industry environment for a medium-scale food processing firm.

Question

Oyinbo Industries Limited is a medium-scale enterprise involved in the processing and packaging of local (traditional) food items for the Nigerian market. Its product portfolio includes Instant Elubo Powder, Instant Pounded Yam Powder, and Instant Beans Powder, all of which have been successful in the Nigerian market. The company hopes to expand its market coverage to the United States, United Kingdom, France, Canada, and the United Arab Emirates, which are believed to be viable new markets for the products.

To achieve these goals, the company plans to strengthen its position in the Nigerian market, focusing on increasing market share, sales growth, and profitability. Recently, it expanded its product range by introducing Instant Plantain Powder, Instant Soya Beans Powder, and Garri Ijebu. The table below shows current market and sales growth for each product:

*Products introduced into the market in 2021

The company’s current market growth rate for each product is over 10%, largely due to population growth and concerns about food hygiene in open markets. Oyinbo Industries seeks to leverage this opportunity to become a leader in processed and packaged foods in Nigeria.

However, competitors are mainly cottage industries and small-scale producers who, despite limited resources, control substantial market share. These firms primarily depend on small rural farmers for raw materials, which are abundant but lack regulation.

As part of its growth plan, Oyinbo Industries intends to secure a raw material supply by acquiring farmland in Kwara State. It also aims to collaborate with a local fabricator for its processing equipment. In the next phase, the firm plans to leverage its distribution network and internal capabilities to expand market share in Nigeria and increase sales of new products. However, challenges such as frequent power outages and equipment breakdowns remain.

Required:

(a) Advise on strategies for each product that align with the company’s strategic direction using Ansoff Growth Vector Analysis. (13 Marks)
(b) Explain how to achieve sustainable competitive advantage using Michael Porter’s Six Principles. (6 Marks)
(c) Describe key business environment elements using the PESTEL framework. (6 Marks)
(d) Identify the type of integration strategy being pursued and discuss potential drawbacks. (5 Marks)

Answer

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Tags: Ansoff Matrix, Competitive Advantage, Integration Strategy, Market Growth, PESTEL Analysis, Strategic Planning, Sustainable Development
Level: Level 2

Topic: Strategic Implementation
Series: MAY 2023

CSME – May 2022 – L2 – SA – Q1 – Corporate Strategy Formulation

Analyze Abiodun Farms' growth strategy using SOAR and PESTEL, and suggest strategic directions for growth.

Question

Abiodun Farms Limited is a company established to engage in poultry farming. Currently, it owns and runs a poultry farm located at Ota, Ogun State. With five years of experience in egg production, the company produces 700 crates of eggs per day, all of which are sold in Ota. The current demand for eggs in Ota is estimated at 2,000 crates per day. The company’s vision is to become the country’s biggest egg producer within the next ten years.

As a growth strategy, Abiodun Farms Limited plans to expand production to 10,000 crates of eggs per day through the installation of more cages and pens on its premises at Ota, acquisition of more chickens, and other required inputs. The focus is to serve the market for eggs in selected towns in Southwestern Nigeria, all of which have an estimated daily demand of 50,000 crates of eggs. The production capacity of all competitors of Abiodun Farms Limited in the market for eggs in the Southwest was estimated at 32,000 crates per day. The company hopes to take advantage of this demand gap through the establishment of distribution outlets across major cities in the region for effective marketing. Aggressive advertisement campaigns to stimulate demand for its products will also be embarked upon.

The establishment of a new poultry or expansion of the production capacity of an existing one has no legal requirements except for making adequate arrangements for waste management. Capital requirements are high. However, the Central Bank of Nigeria (CBN) recently approved the release of soft loans to all interested poultry farmers as part of the government’s agri-loan scheme aimed at promoting farming. Abiodun Farms Limited intends to fund 60% of its growth plan through the agri-loans scheme which the CBN has approved and is currently awaiting disbursement.

For the success of the proposed growth strategy, it hopes to leverage the following:

Knowledge and experience of poultry business acquired in the company’s 5 years of operation
Size of land owned by the company, where current production takes place, is adequate for the proposed expansion
Strong business relationships with the biggest and most reliable suppliers of poultry inputs, such as point-of-lay chickens, cages, feeds, medicines, egg crates, etc.
Growth rate of demand for eggs is currently in line with that of the population of the country, which is estimated at 3%
The company has access to current technology in egg production, which has not changed in decades. It hopes to install automatic solid chicken waste flushers, egg pickers, and sorters. There are also plans to employ two in-house veterinarians
The problem of kidnapping has become worrisome in the area where the company operates. Recently, it had to pay a huge ransom to kidnappers for the release of one of its kidnapped marketers. To mitigate this risk, the company plans to engage five local hunters to provide security for its employees in addition to those securing the farm premises currently
There is currently no public water supply to the farm location. Hence, the company provides its own water, using a huge borehole it drilled three years ago, which has the capacity to generate adequate water to meet current and future needs. In the same vein, the company relies mostly on its generating sets for its electricity needs, due to the unreliable and epileptic public electricity supply
With the increase in egg production comes an increase in solid waste generation and air pollution. Therefore, it is envisaged that the increased air pollution could attract some negative reactions from people in the Ota community. However, the company has an existing waste disposal system which it hopes to expand to properly dispose of all poultry waste
Required human resources are available within the Ota community

Required:

a. Use the SOAR model to analyze the strategic position of Abiodun Farms Limited. (12 Marks)

b. Using the PESTEL analysis, assess the business environment of Abiodun Farms Limited, explaining how each component will impact the company’s growth strategy. (12 Marks)

c. Suggest strategies for Abiodun Farms Limited to achieve its goal of becoming the biggest poultry products producer and seller in Nigeria under the following strategic directions:

i. Market development (2 Marks)
ii. Market penetration (2 Marks)
iii. Diversification (2 Marks)

Answer

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Tags: Diversification, Market Development, Market Penetration, PESTEL Analysis, SOAR Model
Level: Level 2

Topic: Corporate Strategy Formulation
Series: MAY 2022

SCS – Nov 2020 – L3 – Q2 – Environment analysis

Discuss how GGOH might fail to honor its financial obligations using a PESTEL analysis.

Question

The external environment within which GGOH operates has an influence on its financial position and financial performance both now and in the future. Using PESTEL analysis, discuss the view that GGOH might fail to honor its financial obligations. (10 marks)

Answer

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Tags: External Environment, Financial obligations, Financial Performance, PESTEL Analysis, Risk Assessment
Level: Level 3

Topic: Environment analysis
Series: NOV 2020

SCS – Nov 2021 – L3 – Q2 – Environment Analysis

Analyze and present factors negatively impacting the strategic position of COM from both external and internal perspectives.

Question

The board members discussed the future of the BRIGHT strategy of the company in the context that the strategic position of the company continues to evolve at a rather unpredictable rate. The board is interested in gaining a thorough insight into the factors that will pose material downside and upside risk to the strategic position of the company. The chairman of the board would like to discuss the draft memorandum of the company’s strategic position with the CEO prior to the next plenary board meeting.

Required:
Prepare a draft presentation explaining to the Board Chairman the current factors that are negatively impacting the strategic position of the company from the general external environment and internal perspectives.

Answer

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Tags: BRIGHT Strategy, Competitive Advantage, External Environment, Internal Environment, PESTEL Analysis, Risk Assessment, Strategy, Threats
Level: Level 3

Topic: Environment analysis
Series: NOV 2021

SCS – Apr 2022 – L3 – Q2 – Environment analysis

Discuss HPC’s external business environment using PESTEL and evaluate limitations of PESTEL.

Question

favourable or unfavourable to its present survival and future success. The influences (current influences and possible future influences) of the business environment of HPC need to be analysed to ensure that none are over-looked.

Required:

a) Using PESTEL analysis, discuss HPC’s external business environment that appears to be either favourable or unfavourable to its present survival and future success. (8 marks)

b) Discuss TWO (2) limitations of PESTEL as a technique in analysing the environmental influences of HPC. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Environment, External factors, PESTEL Analysis, Strategy Analysis
Level: Level 3

Topic: Environment analysis
Series: APR 2022

CSME – May 2023 – L1 – SA – Q1 – Strategic Implementation

Strategies for market expansion, sustainable advantage, and industry environment for a medium-scale food processing firm.

Question

*Products introduced into the market in 2021

Required:

(a) Advise on strategies for each product that align with the company’s strategic direction using Ansoff Growth Vector Analysis. (13 Marks)
(b) Explain how to achieve sustainable competitive advantage using Michael Porter’s Six Principles. (6 Marks)
(c) Describe key business environment elements using the PESTEL framework. (6 Marks)
(d) Identify the type of integration strategy being pursued and discuss potential drawbacks. (5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Ansoff Matrix, Competitive Advantage, Integration Strategy, Market Growth, PESTEL Analysis, Strategic Planning, Sustainable Development
Level: Level 2

Topic: Strategic Implementation
Series: MAY 2023

CSME – May 2022 – L2 – SA – Q1 – Corporate Strategy Formulation

Analyze Abiodun Farms' growth strategy using SOAR and PESTEL, and suggest strategic directions for growth.

Question

For the success of the proposed growth strategy, it hopes to leverage the following:

Knowledge and experience of poultry business acquired in the company’s 5 years of operation
Size of land owned by the company, where current production takes place, is adequate for the proposed expansion
Strong business relationships with the biggest and most reliable suppliers of poultry inputs, such as point-of-lay chickens, cages, feeds, medicines, egg crates, etc.
Growth rate of demand for eggs is currently in line with that of the population of the country, which is estimated at 3%
The company has access to current technology in egg production, which has not changed in decades. It hopes to install automatic solid chicken waste flushers, egg pickers, and sorters. There are also plans to employ two in-house veterinarians
The problem of kidnapping has become worrisome in the area where the company operates. Recently, it had to pay a huge ransom to kidnappers for the release of one of its kidnapped marketers. To mitigate this risk, the company plans to engage five local hunters to provide security for its employees in addition to those securing the farm premises currently
There is currently no public water supply to the farm location. Hence, the company provides its own water, using a huge borehole it drilled three years ago, which has the capacity to generate adequate water to meet current and future needs. In the same vein, the company relies mostly on its generating sets for its electricity needs, due to the unreliable and epileptic public electricity supply
With the increase in egg production comes an increase in solid waste generation and air pollution. Therefore, it is envisaged that the increased air pollution could attract some negative reactions from people in the Ota community. However, the company has an existing waste disposal system which it hopes to expand to properly dispose of all poultry waste
Required human resources are available within the Ota community

Required:

a. Use the SOAR model to analyze the strategic position of Abiodun Farms Limited. (12 Marks)

b. Using the PESTEL analysis, assess the business environment of Abiodun Farms Limited, explaining how each component will impact the company’s growth strategy. (12 Marks)

c. Suggest strategies for Abiodun Farms Limited to achieve its goal of becoming the biggest poultry products producer and seller in Nigeria under the following strategic directions:

i. Market development (2 Marks)
ii. Market penetration (2 Marks)
iii. Diversification (2 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Diversification, Market Development, Market Penetration, PESTEL Analysis, SOAR Model
Level: Level 2

Topic: Corporate Strategy Formulation
Series: MAY 2022

SCS – Nov 2020 – L3 – Q2 – Environment analysis

Discuss how GGOH might fail to honor its financial obligations using a PESTEL analysis.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: External Environment, Financial obligations, Financial Performance, PESTEL Analysis, Risk Assessment
Level: Level 3

Topic: Environment analysis
Series: NOV 2020

SCS – Nov 2021 – L3 – Q2 – Environment Analysis

Analyze and present factors negatively impacting the strategic position of COM from both external and internal perspectives.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: BRIGHT Strategy, Competitive Advantage, External Environment, Internal Environment, PESTEL Analysis, Risk Assessment, Strategy, Threats
Level: Level 3

Topic: Environment analysis
Series: NOV 2021

SCS – Apr 2022 – L3 – Q2 – Environment analysis

Discuss HPC’s external business environment using PESTEL and evaluate limitations of PESTEL.

Question

Required:

a) Using PESTEL analysis, discuss HPC’s external business environment that appears to be either favourable or unfavourable to its present survival and future success. (8 marks)

b) Discuss TWO (2) limitations of PESTEL as a technique in analysing the environmental influences of HPC. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Environment, External factors, PESTEL Analysis, Strategy Analysis
Level: Level 3

Topic: Environment analysis
Series: APR 2022

Question Tag: PESTEL Analysis

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CSME – May 2023 – L1 – SA – Q1 – Strategic Implementation

Strategies for market expansion, sustainable advantage, and industry environment for a medium-scale food processing firm.

CSME – May 2022 – L2 – SA – Q1 – Corporate Strategy Formulation

Analyze Abiodun Farms' growth strategy using SOAR and PESTEL, and suggest strategic directions for growth.

SCS – Nov 2020 – L3 – Q2 – Environment analysis

Discuss how GGOH might fail to honor its financial obligations using a PESTEL analysis.

SCS – Nov 2021 – L3 – Q2 – Environment Analysis

Analyze and present factors negatively impacting the strategic position of COM from both external and internal perspectives.

SCS – Apr 2022 – L3 – Q2 – Environment analysis

Discuss HPC’s external business environment using PESTEL and evaluate limitations of PESTEL.

CSME – May 2023 – L1 – SA – Q1 – Strategic Implementation

Strategies for market expansion, sustainable advantage, and industry environment for a medium-scale food processing firm.

CSME – May 2022 – L2 – SA – Q1 – Corporate Strategy Formulation

Analyze Abiodun Farms' growth strategy using SOAR and PESTEL, and suggest strategic directions for growth.

SCS – Nov 2020 – L3 – Q2 – Environment analysis

Discuss how GGOH might fail to honor its financial obligations using a PESTEL analysis.

SCS – Nov 2021 – L3 – Q2 – Environment Analysis

Analyze and present factors negatively impacting the strategic position of COM from both external and internal perspectives.

SCS – Apr 2022 – L3 – Q2 – Environment analysis

Discuss HPC’s external business environment using PESTEL and evaluate limitations of PESTEL.

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CSME – May 2023 – L1 – SA – Q1 – Strategic Implementation

Strategies for market expansion, sustainable advantage, and industry environment for a medium-scale food processing firm.

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CSME – May 2022 – L2 – SA – Q1 – Corporate Strategy Formulation

Analyze Abiodun Farms' growth strategy using SOAR and PESTEL, and suggest strategic directions for growth.

You're reporting an error for "CSME – May 2022 – L2 – SA – Q1 – Corporate Strategy Formulation"

SCS – Nov 2020 – L3 – Q2 – Environment analysis

Discuss how GGOH might fail to honor its financial obligations using a PESTEL analysis.

You're reporting an error for "SCS – Nov 2020 – L3 – Q2 – Environment analysis"

SCS – Nov 2021 – L3 – Q2 – Environment Analysis

Analyze and present factors negatively impacting the strategic position of COM from both external and internal perspectives.

You're reporting an error for "SCS – Nov 2021 – L3 – Q2 – Environment Analysis"

SCS – Apr 2022 – L3 – Q2 – Environment analysis

Discuss HPC’s external business environment using PESTEL and evaluate limitations of PESTEL.

You're reporting an error for "SCS – Apr 2022 – L3 – Q2 – Environment analysis"

CSME – May 2023 – L1 – SA – Q1 – Strategic Implementation

Strategies for market expansion, sustainable advantage, and industry environment for a medium-scale food processing firm.

You're reporting an error for "CSME – May 2023 – L1 – SA – Q1 – Strategic Implementation"

CSME – May 2022 – L2 – SA – Q1 – Corporate Strategy Formulation

Analyze Abiodun Farms' growth strategy using SOAR and PESTEL, and suggest strategic directions for growth.

You're reporting an error for "CSME – May 2022 – L2 – SA – Q1 – Corporate Strategy Formulation"

SCS – Nov 2020 – L3 – Q2 – Environment analysis

Discuss how GGOH might fail to honor its financial obligations using a PESTEL analysis.

You're reporting an error for "SCS – Nov 2020 – L3 – Q2 – Environment analysis"

SCS – Nov 2021 – L3 – Q2 – Environment Analysis

Analyze and present factors negatively impacting the strategic position of COM from both external and internal perspectives.

You're reporting an error for "SCS – Nov 2021 – L3 – Q2 – Environment Analysis"

SCS – Apr 2022 – L3 – Q2 – Environment analysis

Discuss HPC’s external business environment using PESTEL and evaluate limitations of PESTEL.

You're reporting an error for "SCS – Apr 2022 – L3 – Q2 – Environment analysis"

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