Mother Dairy PESTLE Analysis
Detailed PESTLE analysis of Mother Dairy examining political, economic, social, technological, legal & environmental factors.
Political Factors:
Mother Dairy is affected by not just the regulations change in the dairy sector, but also by regulations that change in the allied sector such as livestock breeding. Mother dairy is a private and fully owned subsidy of NDDB and gets good support from the Indian government. It has a good relationship with the political parties, and thus gets an upper hand, when new policies are being designed, as they can put in their ideologies, regarding the policies that might affect the industry and the company itself. The government policies have a huge role to play which benefit Mother Dairy. It Is through these policies and incentives that the farmers get motivated to rear livestock or to breed chickens and goats, for the mutton and eggs. Since dairy is a subset of agricultural products, there happens to be no tax on the sale of fresh milk, which benefits both the customers and the sellers. This segment of dairy is deregulated by the government of India, and there is 100% FDI approval, which makes it even more lucrative option.
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This concludes the political factors in the Mother Dairy PESTLE Analysis.
Economic Factors:
Below are the economic factors in the PESTLE Analysis of Mother Dairy:
Milk is a product that most consumers buy, irrespective of the cost associated with it. An increase in the cost of milk and its products might reduce the quantity but will not lead to complete stoppage.
The reduction in prices will again uplift the sale of the product, thus more the need as well as disposable income, more will be the sale. Since milk and its products are perishable products the amount for which it is sold, should be relevant to the product. A random hike or drop in price might cause intense competition in the market, which will further lead to adverse consequences for all the players in the long run. A recent example is the price increase in the cost of milk, by Rs.2 started by Amul, has caught on, and Mother Dairy has followed its steps and increased its cost by Rs. 2. This was done by the company to help the livestock rears get a better price for their product.
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Social Factors:
Following are the social factors impacting Mother Dairy PESTLE Analysis:
There is a brand value that is associated with Mother Dairy. The consumers believe it is a brand that creates good products and helps them live a healthier life. This belief of the consumer needs to be fulfilled at all times to stay in competition. To stay relevant in the competition, it is important to stay ahead by keeping up with the changing trends. The introduction of new products and services as per the requirement if the consumer is of prime importance. The consumption of packaged foods has been increasing, and by working on increasing its capacity to produce packaged foods, the dairy can increase its profitability while satisfying the consumers. Since there is an increase in the need for low fat products, lactose free products, flavored yogurts and other healthy products, the company must plan on expanding in these areas to satisfy the growing customer demands. Mother Dairy has been instrumental in employing a majority of local people in areas of its operations, thus helping in upliftment if the society.
Technological Factors:
The technological factors in the PESTLE Analysis of Mother Dairy are mentioned below:
Mother Dairy has utilized various technologies, over the past few years, to ease its operations. It has made sure that there is judicious deployment of technology. These is integration between the various IT departments of the company, and it was the first company in the milk industry to actually implement and fully utilize SAP. The company utilizes the cloud service to store all its data, and to keep a track of other activities that occur during the daily operations. They have developed a mobile app that can be used to detect, and GPS track all their tankers, monitor the temperatures of their warehouses and dispatch vehicles through the use of IOT. Analytics is being used to recognize the changing trends, and to modify their products according to the changing taste of the consumer. The company has been utilizing vending machines to sell lose milk.
With these advancements and many more to come in the field of IOT and Machine learning, Mother Dairy is going on the right track.
Legal Factors:
Following are the legal factors in the Mother Dairy PESTLE Analysis:
Mother Dairy is bound by several legal factors. There are various legal regulations that the company needs to follow. It may include the labor laws, compensation laws, related to the environment, benefits to the employees, taxes, quality of the products etc. All these are set by various institutions of government and have to be complied with, in order to continue service across the country. A team of experts needs to be in constant check for compliance related to the changes brought about. The laws related to health and safety of the employees, quality and hygiene of its products need to be followed. Apart from these, the company also needs to make sure, that it does not infringe the intellectual property rights of any individual or organisation, while creating new and advanced products.
Environmental Factors:
In the Mother Dairy PESTLE Analysis, the environmental elements affecting its business are as below:
Mother Dairy has undertaken various social aspects of concern and has worked on them through various projects to create an impact. The inclination Of Mother Dairy’s sub brand safal, towards organic products, has helped create a market where the farmers who produce such kinds of products can come and sell it for good prices.
Mother Dairy under the head of its green initiative, will be recycling approximately 830 tons of plastic in 2019.This is in addition to the 1073 tons of plastic it had collected during the previous year. Its efforts to reduce the pollution and save the environment seem to be working, but there is much more the company needs to undertake in the field of sustainability before it can make a mark. Its only through innovation and continued efforts the organization will be able to achieve success.
To conclude, the above Mother Dairy 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.
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