Week 7

WEEK 7

PESTEL Analysis of Big Mart Supermarket

Introduction to Big mart Supermarket

Big Mart Supermarket started operating in Nepal from July 10th 2009 at City-Centre mall. It is one of the well known departmental stores which provide wide variety of grocery items of good quality as well as cosmetics. Currently it has 2 stores in the Kathmandu and is planning to open more outlets in other places in Nepal. Big Mart has been successfully providing range of quality products at an affordable price and along with it they have been providing customer friendly environment and quality services.

PESTEL Analysis of Big mart Supermarket

POLITICAL

Political instability affects the operation of the organization. Nepal is instable in terms of political situation and this has been affecting most of the firms including Big Mart as well. Here we are going to discuss some of the political factors that have been affecting the operations of Big Mart:

Ø  Political instability

Ø  Demands of the political parties in the name donation.

Ø  Insecurity

Ø  Strikes

Ø  Labour union which is also the small form of politics.

Ø  Tax policy for imported products

Ø  Of all most important, the political parties are not able to form constitution.

ECONOMIC

Economic factors directly affect the business. Here we are going to discuss some of the economic factors which is affecting the operation of Big Mart:

Ø  The economic trend of Nepal is rising and improving from 1950s, which is very good for Big Mart. There was not any effect of the recent recession in Nepal, its one of the motivating and important indicator to Big Mart that its business wouldn't be affected even if recession occurs in overseas economies.

Ø  Big Mart management seemed to be a bit miffed by the government’s tax policies. They have the complain that the government imposes higher tax on their imported products, which results in high pricing of those products ultimately affecting their sales. 

Ø  As for weather issues, they said that during winter season and rainy season it is very difficult to import goods. They said that in winter season, they have to face many delayed cargo shipments to be imported due to bad weather (fog) and, in rainy season they have to face the delay from within the country due to landslides and road blocks resulted from heavy rain.  

Ø  The increment in labour cost has also affected Big Mart.

Ø  Globalization has a good impact on Big Mart because due to globalization they are being able to offer products which are found in United States, England and other countries. 

Ø  Rapid change in the exchange rates is also giving problems to Big Mart.      

SOCIO-CULTURAL

Social environment covers the cultural and social factors of the country. It also affects the operation of the business. Here we are going to discuss some of the social factors that are affecting the operation of Big Mart:

Ø  These days consumers shopping behavior are changing. They prefer to shop at department stores rather than on retail stores which is obviously plus point for Big Mart.

Ø  Big Mart has been organizing social programs like blood donation programs, providing donation for victims of natural disaster.

TECHNOLOGY

Technology is the fastest changing external environmental factor. Every organization has to get updated with new technologies, in order to get competitive advantage over others.  Big mart is also updating with the technological changes. Big mart currently possess following technologies:

Ø  CCTV installation

Ø  Electronic counters

Ø  Digital membership cards

Ø  Product information on its website

ENVIRONMENT

People have become conscious about the environment these days so try to avoid things that are not environment friendly. In order to be competitive in terms of environmental factors Big mart has planned to use solar power for lighting purpose at the time of loadsheding.

Other environmental factors to be considered are                             

Ø     Use of paper bags.

Ø     Environment protection campaign. 

LEGAL

Organizations have to follow legal obligation of the country in which they operate. Below are some of the legal obligation Big Mart is following to carry out its operation:

Ø  They have registration certificate from the register office

Ø  Since they have the registration certificate, they have the legal authority to sell goods and services

Ø  They sell their products at reasonable price

Ø  They sell products of good quality

References:
Ovidijus Jurevicius. (2013). PEST & PESTEL Analysis. Available: http://www.strategicmanagementinsight.com/tools/pest-pestel-analysis.html. Last accessed 22/04/2013.

cipd. (2013). What is PESTLE analysis?. Available: http://www.cipd.co.uk/hr-resources/factsheets/pestle-analysis.aspx. Last accessed 22/04/2013.

Thapaliya, B.. (2013). Nepal’s business environment: stained by political uncertainties.. Available: http://www.globalpolitician.com/print.asp?id=5019. Last accessed 22/04/2013.

Paudyal, R.. (2009). Environmental issues in Nepal.. Available: http://rajib-paudyal.blogspot.com/2009/02/environmental-issues-in-nepal.html > . Last accessed 22/04/2013.

bigmart. (2013). Big mart supermarket.. Available: http://www.bigmart.com.np/. Last accessed 22/04/2013.