Kellogg’s PESTLE Analysis

Published by MBA Skool Team, Last Updated: January 26, 2021

PESTLE Analysis of Kellogg’s analyses the brand on its business tactics. Kellogg’s 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 Kellogg’s, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.

Let us start the Kellogg’s PESTLE Analysis:

Political Factors:

The political factors in the Kellogg’s PESTLE Analysis can be explained as follows:

Political stability, instability, any changes in the current government or any form of takeover of power can drastically change the business situation in a country. Kellogg’s being a multinational, it can get affected by multiple political variables. It can be of the country in which Kellogg’s operates or any country which help in the operations of Kellogg’s. To evaluate the political variables which can affect the we can consider the following. The degree to which political stability the nation has as of late. Peoples trust in the legislators and their probability to participate in demonstrations of defilement. The boundaries which the host nation shares and what are the boundary exchange conditions. The tax system which is prevalent in the country of operation can also affect the overall sales of the company. The danger of military intrusion by unfriendly nations may cause divestment from adventures.

Image: Wikimedia

Economic Factors:

Below are the economic factors in the PESTLE Analysis of Kellogg’s:

Financial parameters of each nation in which the company operates for example, changes in the expansion rate, the outside swapping scale, the loan rate, the National GDP, Per Capita GDP and the present phase of the financial monetary cycle.

Along with this parameter, the total interests rate prevalent in the country and the overall business atmosphere, can possibly make an organization exceptionally beneficial, or amazingly liable to acquire a misfortune. The growth of GDP will influence how quick Kellogg’s is relied upon. The loan rate will affect how the people spend and it also will affect whether people are happy are not. Higher rates will bring in more noteworthy projects and development which would mean higher development for Kellogg’s. If we consider the situation of jobs in the country, higher joblessness means individual would work for a lower wage, which would bring down the expenses of Kellogg Company.

Social Factors:

Following are the social factors impacting Kellogg’s PESTLE Analysis:

The social factors that affect Kellogg Company are an immediate impression of the general public that Kellogg Company works in, and includes culture, conviction, frames of mind and qualities that most of the population may hold as a network. The socioeconomic population spread which means their particular ages and sexual orientations, limitlessly sway whether a specific item might be advertised to them. For example, the sale of cosmetic products is mostly related to the female population, so focusing on a major part on male population would be a wrong strategy. Class dynamics is also an important issue considering that if majority of population is a lower class; Kellogg’s product will be difficult sale.

Technological Factors:

The technological factors in the PESTLE Analysis of Kellogg’s are mentioned below:

Technology can change industry dynamics in a short amount of time. Consider any industry in which the company operates, a small change or innovation can lead to a competitive advantage for the firm and can change the leading position in the industry. There are no examples where we can see that a simple innovative idea can abruptly change the industry. Uber and Lyft overwhelm the taxi business; cell phones have left different telephones an unviable alternative for most and so on. The technological advancement that may affect Kellogg's is as previously explained. Kellogg should keep a mark on the technological advancement that has been made by the competitive firms in the food and agriculture industry since that is the area in which Kellogg's operates. For example, any innovative method for cost-efficient methods of producing corn can significantly reduce the cost in the overall production of corn flakes. Kellogg's should keep a tab on the degree of the effectiveness of the innovation by the competitive firm and check how rapidly it is developing and disturbing its rival's incomes. To react to the situation Kellogg's should either incorporate the innovation or should find new innovative methods to counter the rival company. When a company makes a significant advancement in particular technology or innovation it leads to higher monetary benefits for the company. These monetary benefits can be reinvested in the R&D department of the company e to develop future mechanical advancement.

This would further increase the Profits for the company and would ensure a significant stretch of competitive edge over the industry.

Legal Factors:

Following are the legal factors in the Kellogg’s PESTLE Analysis:

The functioning depends upon various legal factors prevalent in the country in which it operates. the wellbeing of the employees of Kellogg's cannot be guaranteed only by the company policies as it depends upon the rules and regulations of the local government hence to develop Kellogg's as a desirable place for employment for its employees, various legal aspects should be taken into consideration such that it can retain skillful and trained employees for the company's operations. various legal factors that can specifically, affect the functioning of its areas follows. The Intellectual Property Rights that are present in the country which it operates is important such that it will ensure the safety of patents and other information that has helped Kellogg's maintain a competitive edge over other firms in the market. To ensure that employees are treated equally regardless of the age caste gender or qualification there are discrimination laws being placed by various governments according to the country in which it exists. other legal restrictions are also placed to protect the health and safety of the employees who are working under Kellogg's or any other company for that matter. Kellogg's operates in a food manufacturing industry the food and safety Association places various quality standards so as to safeguard the consumers.

Environmental Factors:

In the Kellogg’s PESTLE Analysis, the environmental elements affecting its business are as below:

Since it is a food manufacturing industry it has its own norms to protect the environment. These norms are such that it protects the company from any pressure or potential boycott due to a lack of environmental awareness.

various environmental factors that that should be taken into consideration by a company like Kellogg's are: the environmental conditions that card affect the storage and transportation of the goods being manufactured by Kellogg's for example if a country is facing extreme drought or extreme rainfall it would become difficult for Kellogg's to continue its operation for a short span of time. Kellogg's requires a large quantity of water for the food processing laws concerning safe disposal of water and other Waste food resources should be taken care of. if it has set up any plant in such the area that would affect or lead to endangerment of already endangered species of animals or any natural flora and fauna can lead to serious retaliation from the local groups.

To conclude, the above Kellogg’s 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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