Lays PESTLE Analysis

Published by MBA Skool Team, Last Updated: February 24, 2020

PESTLE Analysis of Lays analyses the brand on its business tactics. Lays PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand.

PESTLE analysis is a framework which is imperative for companies such as Lays, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.

Let us start the Lays PESTLE Analysis:

Political Factors:

The political factors in the Lays PESTLE Analysis can be explained as follows:

Political factors pertaining to a particular area and region will affect the company’s business and its functioning in that area. Lays has to take into consideration the various political factors that may affect the company’s business while penetrating a particular market or even trying to sustain in it in the long run. The company needs to abide to various food laws that have been introduced in the market and needs to alter the manufacturing process if needed for smoother functioning of the business whereabouts. Labour laws as well as the labour unions in that region needs to be appeased for flourishing the business in the area. The trade policies expected to be followed by the company in the market needs to be thus revised and revisited by the company in order to sell the lays product in the market.


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Economic Factors:

Below are the economic factors in the PESTLE Analysis of Lays:

Economic factors that are faced by Lays are majorly pertaining to the competitors existing in the market. These competitors need to be recognized by Lays as it will hamper the growth of the business if not penetrated well. Before penetrating the particular market, Lays need to address the barriers in the market. The economies of scale that Lays currently has is also vast thus enabling it to function at a much better rate. The market stability is also an important factor that needs to be considered by Lays while conducting business in that area. The area being volatile to instability may lead to future unrecoverable losses for the company that may affect the business adversely.


Social Factors:

Following are the social factors impacting Lays PESTLE Analysis:

Since Lays is in the food business, it needs to consider the various taste preferences of that region it is conducting its business in. With the rise in the consumption of health food in the market, there may be some difficulties that Lays may face however to overcome this short coming of the same, Lays needs to segment the market its functioning in and thus target the respective audience accordingly. Lays can also adopt and propagate environment friendly practices by adopting environment friendly packaging. This will contribute towards the environment as well develop the brand value of the company with a positive connotation to it.


Technological Factors:

The technological factors in the PESTLE Analysis of Lays are mentioned below:

With the progress of technology in the industry, adoption of the same is essential. Lays should ideally adopt the latest technology in its production process that will facilitate costs cutting options for the company. This will lead to even battling the competitor’s question and also enabling faster and effective work process. Application of these developments will always provide and impetus to the business, thus reaping future profits. The technological factors can also be exploited to the maximum by enabling better marketing strategies and brand awareness through social media and also other media platforms.


Legal Factors:

Following are the legal factors in the Lays PESTLE Analysis:

Lays falls under the snack industry thus there are stringent laws pertaining to carrying of business in various regions. Laws being dynamic from region to region, need to be taken into consideration while carrying out the business. Various health laws and production policies that are levied on the consumable goods needs to be abided by the company for hassle free functioning in the markets. Since the product is a consumable product, adhering to the health laws and quality of packaging is a major factor that needs to be considered while entering the market. Any faltering on these grounds may affect the company adversely leading to worsened conditions in the market and affecting the company’s business. There exist various trade policies for import and export of ingredients in the market and those need to be also accounted for while functioning in the market.


Environmental Factors:

In the Lays PESTLE Analysis, the environmental elements affecting its business are as below:

Environmental factors are essential when it comes to sustainable business development of a particular brand in the economy. Since Frito Lays raw material is potato, harvesting of the same in an ethical way is essential. The waste disposition of the excess produce needs to be effective to avoid any major issues pertaining the carrying out of the business. Environment conservation can be promoted by the company by provide environment friendly packaging for the product. This will also reduce the products footprint on the environment and enable the company to be environmentally sustainable in the market.

To conclude, the above Lays PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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