Published by MBA Skool Team, Last Updated: March 05, 2021
PESTLE Analysis of Grofers analyses the brand on its business tactics. Grofers 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 Grofers, 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 Grofers PESTLE Analysis can be explained as follows:
Political stability in a country please made a role in the efficient working of a company and ends Grofers should analyze and be aware of all the political macroeconomic factors that could affect his operation at regular intervals. Though political decisions Are outside the companies control, governments around the world could make decisions that could have direct impact on the operations of the business. Some of these could be regulating competition in the industry, change in taxation policies, announcing subsidies to certain industries, corruption and any modifications in the business policies. People have been switching to the online mode for grocery shopping and government may take any measures to protect the local vendors. such measures could also have great impact on Grofers’ operations. There might also be decisions which requires proper strategy to be developed in order to take it advantage. this is what makes analyzing the political environment very important for every business.
Image: company website
Below are the economic factors in the PESTLE Analysis of Grofers:
Interest rates, employment, inflation, recession could be some of the economic factors that could impact Grofers’ operations in an economy.
Though low unemployment rates could be a great indicator of an healthy economy. But higher unemployment in an economy would be Beneficial for the company as it would be able to get cheaper labor which will there by increase its profits. It could need a lot of employees to deliver their product and hence this would save them a lot. Recession could affect its business to a large extent and hence measures should be taken well in advance to reduce its impact. This is because consumers will have less disposable income to spend on non- essentials. The measures that businesses could take to do so is reduce the costs of nonessentials. By identifying such economic factors, the business has more chance of being successful in future.
Following are the social factors impacting Grofers PESTLE Analysis:
Social factors like acceptance in the society for the online medium had been a great challenge for companies like Grofers as people refrained from switching from their traditional methods of grocery purchasing. Other social factors that affect the companies decisions may include demographics, pressure groups , consumer trends and health and safety awareness in the society. The make of the society affects the disposable income per person and the buying behaviour. If consumers have common traits business can target them much more easily. Analytics plays an important role in online platforms like Grofers and consumer trends adds onto this. The trends must be identified and be acted upon by formulating the best strategies well ahead of the industry competitors. Such factors help the company to attain competitive advantage by fulfilling the market demand and taking the first mover advantage.
The technological factors in the PESTLE Analysis of Grofers are mentioned below:
Technology is fast moving and has changes drastically since years. Grofers should assess the technological environment and strategize over how technological changes impact the future of the business. Some of the developing areas may be artificial intelligence. Many people think of this as humanized robot. However, the future of AI impacts on its busines may just be improvements in algorithms. They can highly target users by using machine learning to recommend products that they will like and in turn purchase. It need to keep on top of search improvements in AI. And this is why they may employee the best people in the world to improve the machine learning capabilities. Another areas they could investigate is cyber-crime, big data and robotics. Robotics has a major impact on the future efficiency of the business. If Grofers manage to keep on top of improvements in robotics it could provide better services in future and improve its delivery services to a great extent.
This superior performance could help them gain competitive advantage.
Following are the legal factors in the Grofers PESTLE Analysis:
The legal factors tend to focus on the laws that the business needs to abide by. Minimum wage is a legal requirement that the minimum wage law ensures that the company abides by. The company has no control over any changes in this rate, but it directly impacts Grofers’ operating cost. The unemployment rate in a country also plays a major role here as lower and employment leads to expensive labour and higher unemployment leads to cheaper labour which thereby increases the company’s profits. Health and safety laws are also in place to protect the consumers from being delivered any bad quality products. A company should focus on its customers after sale services as goodwill is of fundamental importance to them. There might be another loss differing from one country to another and awareness of the same is of fundamental importance. Abiding by the laws helps the company to save their time and cost from being spent on legal proceedings.
In the Grofers PESTLE Analysis, the environmental elements affecting its business are as below:
Common environmental factors Include A move towards more sustainable methods of doing business. A lack of sustainable packaging may lead to various allegations on the company and may be perceived as a lack of sense of Environmental Protection. As Grofers delivers door to door it invests a lot on delivery services and supply chains and their entire operation is based around logistics. Hence it must take care about the levels of pollution in a country by using new and greener delivery methods that would ensure much lesser pollution as compared to the current ones.
This would ensure sustainability in the long term and add onto its growth prospects. It needs to take care about ethical sourcing that is from where it is acquiring its products. Through this it could also contribute to corporate social responsibility by dealing with the unprivileged sections of the society.
To conclude, the above Grofers 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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