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PESTEL ANALYSIS ON FMCG INDUSTRY:

Political factors-
All of this has to do with how and to what extent the government intervenes in the
economy. Government policy, political stability or instability in foreign markets, foreign
trade policy, tax policy, labour legislation, environmental law, trade restrictions, and so on
are all examples of this.
Political issues will have a stronger impact on organisations and industries, and it will be the
companies' responsibility to comply with them. Organizations must comply with the laws that have
been enacted; failure to do so could result in negative consequences for the organisation.
Certain import policies have been imposed by the government. Small-scale industries, on
the other hand, are exempt from sales and excise taxes. This will allow SMEs to boost their
investment and the number of new recruits. Transportation and infrastructural facilities are
developing in both urban and rural areas, which will benefit the distribution network.

Economic factors:
The current global economic slump has impacted practically every industry on the world.
Unemployment is on the rise, and consumer spending power is low. As a result, consumers
are less likely to purchase pricey goods or services. This puts pressure on RMCG firms to
lower their product and service pricing.
Organizations will have to assess the current economic situation and respond accordingly. A
successful business will adapt to shifting economic situations, as well as consumer and
stakeholder behaviour. An effective organisation must be aware of the changing economic
conditions in the United States and around the world, and it must apply a proper strategy to
remain competitive.
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Social cultural factors:

 Income distribution: This diagram depicts how income is allocated throughout the
economy. It has a direct impact on the buyers' purchasing power. And this, in turn,
leads to an increase or decrease in product consumption.
 Changes in lifestyle: Changes in lifestyle can result in an increase or decrease in
demand for certain goods. For example, LCD and LED televisions have mostly
supplanted digitally displayed televisions, indicating a shift in consumer lifestyle.
 Education levels: Education is one of the most essential factors that determine a
consumer's purchasing power; when choosing a product, a buyer should be aware of
all its aspects so that they can distinguish it from competing items.
 Law has an impact on social behaviour: The government enacts various laws to
protect consumer rights. For example, under the Consumer Protection Act, a
consumer can bring a claim against a merchant if he believes he has been duped.

Technological factors:
Technology advancements raise output while also improving the quality of products and
services provided to clients. Companies began to use e-business to boost brand
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communication and market share. Technological advancements have simplified the supply
chain and the transactions that occur within it. Organizations cut costs and boosted the rate
of information transactions by implementing effective IT technology. By producing novel
packaging, enhancing production, and extending the shelf life of food goods, technology is
playing an increasingly important role in the FMCG business.
All manufacturers in this industry strive for better, stronger, more effective, and faster
products since they boost sales. The advancement boosts sales by allowing manufacturers
to create better items with more appealing packaging and improved communication. With
advancements in communication technology and the growth of social media networks,
businesses may better engage with their customers through improved marketing strategies.

Environmental factors:
Environment Demographics the FMCG business benefits from population growth since it
increases demand for the industry's products. Because India has one of the world's largest
populations, there are several chances for FMCG items. 2. The Age Distribution of the
Population The age distribution of the population has an impact on the range of items that
FMCG companies can provide. Companies in the FMCG industry might diversify their
products based on the market's demographic and age mix. Because more than 40% of
India's population is made up of young people from various socioeconomic backgrounds,
there are more prospects for Personal Care and Packaged Food Environment Expansion.

Legal factors :
Employment law: Employment law ensures that every citizen has an equal opportunity to
work and earn a living. It ensures that all citizens have the same opportunity. Consumer
protection: This law serves to protect customers' rights by allowing them to initiate a lawsuit
against a vendor if they believe they have been defrauded.
Industry-specific regulations: These rules govern industries. For example, no industry can be
established between cities; instead, it must be located outside of them.
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BCG MATRIX OF ITC LIMITED:

The preliminary information for our BCG matrix will come from a detailed examination of
the predicted growth rate and the subsequent market rate. Because there are so many
brands, we'll just focus on ITC's businesses and create an ITC BCG matrix for the sake of
simplicity.
STAR PRODUCTS :

 Paperboards, Specialty Paper and Packaging; Hotels and Agri-Business are the three
stars of ITC Ltd.
 Among the paper and paperboards businesses, the Paperboards and Specialty Paper
business is India's largest in terms of sales. By 2024, the industry is expected to
increase at a 7.8% compound annual growth rate (CAGR).
 ITC Hotels is one of India's most rapidly expanding hotel chains. The hospitality
industry's growth rate qualifies it as a Star industry.
 ITC Agri is the country's largest exporter and one of the country's major integrated
Agri business groups. By 2040, the agricultural industry is predicted to grow at a rate
of 10.70 percent.
 Each of the three companies has a high growth rate and a large market share. This
puts them in the category of a star.
CASH COW PRODUCTS :

 With its extensive selection of brands, ITC Cigarette and Cigar Business is India's
market leader. It is the market leader in every segment of the Indian cigarette and
cigar market. In India, growth in this area is predicted to be barely 3% by 2021.
 Cigarettes and cigars have a large market share in the FMCG industry. Despite this,
the industry's growth is modest, indicating that the product is in a low-growth
market with a large market share.
 Marketers will have to keep their portion of the market. The extra cash gained can
be put towards other products in the portfolio that need substantial investments.
QUESTION MARK PRODUCTS :

 The food market in the FMCG sector is predicted to develop at a CAGR of 23.15
percent by 2021, putting ITC foods in the question mark category. ITC FMCG
products, particularly foods, are rising, although at barely 7.3 percent per year.
 The product is in a fast-growing market, yet it has a small market share. As a result,
it's a question mark, indicating quick expansion but smaller profit margins. To gain
market share, it will require a large sum of money.
 Marketers can either invest extensively in acquiring market share, buy competitors,
or completely eliminate the SBU (strategic business unit). To turn the question mark
into a star, they'll have to put in a lot of effort.
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DOG PRODUCTS :

 Competitors like as Infosys, TCS, Accenture, and HCL put a lot of pressure on ITC
Information Technology under the brand name ITC Infotech. The market share is
shrinking due to the advent of multinational firms.
 In a low-growth market, ITC Infotech has a small market share. ITC Infotech's future
survival is in doubt, as most dogs eventually exit the market.
 Marketers have the option of either divesting or harvesting the company. The
technique of shutting down the SBU is known as divesting. Harvesting, on the other
hand, is the practise of reducing all investment to maximise profits, even if it means
losing all market share.