PEST ANALYSIS OF THE WINERY TIKVEŠ

PEST analysis is a process of evaluating and interpreting information obtained through the
investigation of political and legal (P), Economic (E), socio-cultural, environmental and media (S) and
technological-scientific (T) factors of the company's environment. The main goal of the analysis is to
identify and point out critical factors that substantially affect the present and future of the company.
In addition to categorization of factors, the task of PEST analysis is to establish their mutual influence
and interactions in order to identify opportunities and threats of the company.

POLITICAL

OPPORTUNITIES

 By joining the EU, laws will be enhanced that will only help regulated companies to continue
improving and better functioning on the market
 Support of the State through lower taxes on alcohol thus increasing sales of products.
 Future entry into the EU opens the doors of new markets, more open cooperation without
customs.
 Protect the market by introducing tariffs for foreign manufacturers to protect domestic
 Support from domestic producers through various investments with which they will improve
their company and become more competitive

THREATS

 The future of Macedonia's entry into the EU, where the legislation on alcoholic beverages is
elaborated and the more complex regulations on informing consumers about the
composition of related activities such as trade, HORECA Channel...
 Mixing power into company business – extracting money from companies, buying stocks,
changing ownership structure.
 Possible corrupt behavior in State institutions – bribery by other companies, subvention to
large companies on the market
 Black sales meaning that one part of the wine producers is not registered and performs its
activities illegal.
 Negative perception of alcohol – it leads to many countries introducing higher excise duties
on alcohol and cigarettes due to health aspects of the population.

ECONOMIC

OPPORTUNITIES

 By joining the EU, the winery Tikveš will open a lot more markets, with whom will have a
freer trade
 Wine is a seasonal product and much depends on the quality of raw materials and
production that again depends on the yield.
  Macedonia is slowly becoming an important place on the tourist map which will certainly
contribute to the growth of tourism, and thus creates an opportunity to promote local tastes
and varieties of wine
 The region where the Tikveš winery can be found through quality tourist communication and
promotion is developed into one interesting tourist destination. An example is the Tuscany
region in Italy.

THREATS

 Recession and stagnation in Macedonia and Europe will certainly lead to a decline in
consumption and production and the decline in purchasing power of consumers themselves
 Price increase of raw materials, collects production, raises wages – all this leads to an
increase in the production chain and therefore a more expensive product
 Price pressures from foreign manufacturers that are cheaper
 More private label products are appearing on the market that are much cheaper
 Introducing the tax on alcohol is certainly one of the main problems faced by producers

SOCIAL

OPPORTUNITIES

 Consumers are increasingly turning to hedonism and enjoying wines

 In some countries (Islamic) there is a growing demand for products that have KOSHER
certificate, this is an opportunity for a winery in business expansion
 Consumers are increasingly educated about the quality of the product and its origins, which
definitely goes in favor of the winery Tikveš.
 Macedonians have preferences for domestic products

THREATS

 Changing eating habits – a healthy way that comes from the West, includes life without
alcohol
 Consumers are increasingly turning to BIO products or non-GMO products
 The population is getting older or more people are retired who cannot afford the luxury
 Quick acceptance of world trends (people feed in fast food restaurants, do not have time for
themselves).
 In some countries the Macedonian product doesn`t have a good image yet.

TECHNOLOGICAL
OPPORTUNITIES

 Investing in the technological production process reduces the cost in the production and
distribution chain
 Monitoring the world trends in wine production – new flavor, new and more attractive
bottles, new wine varieties
 Investing in BIO production as well
 Investment in return and ECO packaging – recyclable bottles, new materials (from Eco
paper).
 Online Wine Order – which will simplify the distribution of wine

THREATS

 Low investment in technological development – State and companies invest very small
amount of money in technological development
 Low-level technological development in Macedonia is very low or almost does not exist at all
 Most companies in Macedonia still don`t have developed environmental and eco-packaging
technology
 Find you way how to irrigation the fields because temperature is rising ( climate is changing).

ECOLOGICAL

OPPORTUNITIES

 By joining the EU, most companies will have to increase their environmental standards,
which will result in higher brand awareness for consumers in western countries.
 Use resources in non-polluting production – means for spraying and protection
 Building a marketing communication or brand Tikveš with a story of environmental
protection.

THREATS

 Authorities still do not have a developed strategy in Macedonia, with consideration to waste
disposal and its recycling
 Ecological awareness of consumers is at relatively low level
 Climate is changing – temperature is rising

STRATEGY FOR THE NEXT FEW YEARS

A growing number of consumers are turning to green oriented companies and caring for the
environment.

LEGAL

OPPORTUNITIES

 The company Tikveš is a company with a long tradition which proves that they are certainly
concerned about their workers and their rights
 They use their communication and marketing campaigns in a legal and competitive way that
many consumers and competitors have recognized
 The level of product quality is according to all technological and manufacturing standards
and many prizes proves that fact.

THREATS

 Expanding sales to other markets can get possible problems with the law in other countries –
customs, quotas, the possibility of registering products
 High level of corruption in Macedonia leading to uneven market competitiveness
 There are no quality regulations on informing consumers about food that allows individual
competitors to import and produce low-quality and cheaper goods.

Winery Tikveš will certainly have a lot of challenging years ahead. First of all, Macedonia's entry into
the EU is likely to happen in a few years. Joining the EU will open many new markets, where Tikveš
will have easier way to enter, while on the other hand competition will enter at domestic market
cheaper products. The Tikveš definitely at that moment have to build a brand of awareness at the
domestic market to preserve the leadership position in the domestic market. The monitoring of
world trends in technology, production and ecology, which is increasingly represented in all Western
markets will help Tikvešu to set one of the serious players in foreign markets.

Strategy for the next few years:

 Together with the government, build a tourist story with a region that is special for wines
 Investing in the modernization to reduce production costs and increase the capacity of
production
 To direct strategy towards exports
 New flavors and types of wine create to the needs of customers. Also, they have to create
wines by the specific region/country.
 New models of consumption, going beyond the trends to cater to new diets (vegan and
organic wines)
 Direct your business towards millennials – New/More attractive packaging, new flavors
 Ordering products through online stores and mobile applications are growing year by year.