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Industry Sector Analysis

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Report on Industry Sector Analysis

Introduction

In UK the dairy enterprise is developing to a extra quantity as they're having know-how for processing and dispensing with the dairy merchandise. They are known for there freshly pasteurised milk that's healthful for the humans (Gould, 2012). Thus, the enterprise pretty specializes in the growing with excessive requirements of manufacturing and developing with new merchandise to be served. Further, on this report special evaluation of dairy enterprise is been completed which help consists of the dedication of aggressive demanding situations and the possibilities which can be confronted via way of means of the enterprise.

Macro-environment factors

PESTLE Analysis

It is a good version that's incredibly been used to assess the outside elements that have a brilliant affect at the operations of the dairy enterprise (Industry Overview. 2015). Further, this enterprise is a sub-set of agricultural enterprise which way it entails the sports including production, sale of milk merchandise including cheese, milk, cream, cheese etc. which affords with excessive pride stage to the customers. Further, there are range of things which influences the dairy enterprise. Thus, following elements are as follows:

  • Political- Government policies and regulations related to dairy products have a significant impact on farmers’ decisions on how to raise animals and produce products. Farmer will slaughter a cow rather than mistake it for milk (Ismail and Nielsen , 2010).

  • Economic- The factor that has the greatest impact on the dairy industry is people’s purchasing power in the economy. According to observations, milk is regarded as the main thing. Everyone buys regardless of the purchasing power. , We can conclude that when the income is low, the sales of this will not be affected.

  • Sociological- In the current scenario, people are vegans, which has a negative impact on the sales of dairy products. People are worried about their weight, so they avoid food because they contain more fat . Therefore, the industry must develop low-fat products to maintain market sales.

  • Technological- TThis is an important factor that helps milk producers sell products to customers and increase sales. In addition, farmers have recently started to use various technical equipment, which ultimately added value to products.

  • Legal- At the same time, manufacturers must abide by all laws for the manufacture and sale of products on the market. It is important to determine the composition and shelf life of products so that they will not harm anyone.

  • Environmental- It is been clear that the whole dairy industry is dependent on health and availability of livestock (Law, Harvey and Reay, 2013). Thus, it is important for the farmers to take several measures to keep there livestock away from diseases so that it do not effect there quality products. Moreover, the products must be stored in a proper manner so that they do not loose there effectiveness

Micro-environmental factors

Porter’s five forces

It is an important model which is used to analyse the different parameters of the industry which assist in developing the strategy for the business. Thus, under this there are mainly five factors which which affects the dairy industry. The following are been determined as under:

  • Threat of new entrants- In this industry it requires with high amount of capital for making the investments. Thus, it is not possible for people to start with this and attain the economies of scale. So there low degree of new entrants in the industry.

  • Threat of substitutes- It is having a medium degree of substitutes products in the industry. As in the market there are large number of other substitutes for the milk, thus it is important to focus on other dairy products which will help to retain the competitiveness in the industry (Papademas and Bintsis, 2010). This will also result in increasing the profitability of the industry. Moreover, the cost price of the products also vary from time to time and as per the brand. This increases the degree to substituting the products with others.

  • Bargaining power of buyer- In this industry, there are large number of firms which are serving with the similar products with different brands. Thus, it is crucial for the organization to develop high quality and unique products to gather the customers. Further, it is clear that the bargaining power of customers is very high as they are having number of options available with them.

  • Bargaining power of suppliers- As in this industry the suppliers are mainly the farmer which are serving with the milk to the companies for the final products. Thus, the bargaining power is low in this case (Robinson, 2012).

  • Rivalry among competitors- In the industry there are large number of competitors which includes big companies as well as the local people which are serving with the same products to the customers. Thus, for this industry there is high degree of competition level in the market. Thus, it become important to maintain the quality of the products so as to provide the customers with efficient products which satisfy them to a greater extent.

Conclusion

From the above report it can be concluded that the dairy industry is growing with the time but the needs and preferences of the people are changing on the regular basis. Thus, it becomes important for the organizations to evaluate there demands and develop with the products accordingly. Further, the micro as well as macro environmental factors have a great impact on the operations and sales of the dairy industry.

Recommendations

By developing with the proper analysis of the market it is been recommended that the dairy industry must evaluate the different factors which mainly includes the micro and macro before developing with the strategies of the organization. Moreover, the policies which are followed by the competitors must also to be seen on regular basis so as to maintain image in the market. Further, they must evaluate with the opportunities which will help them to grow the industry to a greater level.

References

  • Gould, G. W., 2012. New methods of food preservation. Springer Science & Business Media.

  • Ismail, B. and Nielsen, S. S., 2010. Invited review: plasmin protease in milk: current knowledge and relevance to dairy industry. Journal of dairy science.93(11). pp.4999-5009.

  • Law, R., Harvey, A. and Reay, D., 2013. Opportunities for low-grade heat recovery in the UK food processing industry. Applied thermal engineering.53(2). pp.188-196.

  • Papademas, P. and Bintsis, T., 2010. Food safety management systems (FSMS) in the dairy industry: A review. International journal of dairy technology.63(4). pp.489-503.

  • Robinson, R. K., 2012. Modern Dairy Technology: Volume 2 Advances in Milk Products. Springer Science & Business