Published by MBA Skool Team, Last Updated: April 27, 2020
PESTLE Analysis of KitKat analyses the brand on its business tactics. KitKat 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 KitKat, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.
The political factors in the KitKat PESTLE Analysis can be explained as follows:
KitKat chocolate brand is available all over the world. The effect of political decision on the brand differ from country to country. if the government of a country is concerned with the increasing obesity among the population, it can take policy decisions like increasing tax or put some regulations over company so that people will consume less sugary items especially chocolates. If the labour laws of the countries in which t is producing KitKat is rigid, it becomes very costly and difficult for the company to sustain in that country. The government decision of demonetisation has impacted the business of KitKat as many MSME has been shut down and many jobs which lead to economic slowdown and the consumption of KitKat has decreased.
Below are the economic factors in the PESTLE Analysis of KitKat:
Economic factors like inflation, purchasing power, wages rate plays a very important role in context of business.
Any problem in the country from where it is sourcing the cocoa can cause a great distress to the company. The increase in the prices of cocoa will negatively affect the business of KitKat. Moreover, rising labour cost is also a cause of concern for the company. KitKat has a lot opportunity if growth in the developing countries where the income of the people is rising and moreover their consumption habits are changing. Like people in India are very cost conscious, but now with increasing income they give somewhat little thought before purchasing chocolates.
Following are the social factors impacting KitKat PESTLE Analysis:
KitKat is very popular among people everywhere in the world. people knew this brand by heart and its four fingered bars are very famous among the people. But nowadays with the increasing concern of people about their health, they started avoiding sugary products. Now KitKat brand want to know the ingredients and nutrition of the products before purchasing it. Any deviation from the ratio in which nutrition is mixed or any adulteration can put company into great danger just like what happened in case of Maggi.
The technological factors in the PESTLE Analysis of KitKat are mentioned below:
As the world is making great progress day by day and taking great leap in technology advancement, it became very necessary for the company to keep itself technologically updated. Technology upgradation helps the company in working more efficiently and with less wastage of time, efforts and money. KitKat is regularly engaging itself with the customers through social media and advertise on different media platforms to marks its presence everywhere.
Promoting its brand on social media saves a lot of money for the company while ensuring that its promotions reach to large number of people.
Following are the legal factors in the KitKat PESTLE Analysis:
The whole chocolate industry has been under allegations that it is sourcing cocoa from the countries where child labour is prevalent. Specially it met major chunk of its cocoa requirement from Ivory Coast which is very infamous for child labour abuses and inhuman worker treatment. This has created a negative image for the company as people now are becoming very conscious regarding these matters. KitKat has proved itself by achieving the target to source 100% cocoa from certified and sustainable sources only. For a company, its trademark is its very valuable asset, but the company in 2018 lost its trademark case. The company was engaged in a decade year-long battle to protect its four fingered shape chocolate which is copied by the Kvikk Lunsj. Now the company doesn’t have the exclusive right over it Four fingered bar.
In the KitKat PESTLE Analysis, the environmental elements affecting its business are as below:
When nearly every major companies are making great progress towards sustainability, how KitKat can fall behind. In fact, KitKat is the front runner in achieving sustainability in its operations. It has become the world’s first brand that source 100% certified sustainable cocoa.
It not only helps in making the environment sustainable but also it improves the lives of the farmers from whom cocoa is sourced and at the same time get quality seeds. In one attempt it is doing three good things. It also started using foil covering instead of plastic covering in an attempt to reduce the environmental pollution.
To conclude, the above KitKat 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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