Symbiosis Institute of Management Studies, Khadki, Pune

 
EVALUATION SHEET 
(COVER PAGE)
 
INTERNAL EVALUATION/ ASSIGNMENT NAME & No:       

(Internal)
[Compulsory Submission for Internal Evaluation]
 

Subject Code : 20448101                   Subject: Essentials of Marketing Management

Prof. Name:  Prof. Rohitesh Gidwani

Course/ Program and Batch: Executive MBA

PRN: 21020448__018___________                         _          Student Name: Anisha Dutta

Date of submission:     20/ 09/21    

Submitted to: _Digital Run book/__________________________ Signature of Student_ A.Dutta_

Evaluation:

TOTAL
Question 1 2 3 4 5
(Out of 30)
Marks
Allotted

Evaluated by: _________________________________________ Signature of Faculty ___________________

Date: _______________2021
PESTEL Analysis is a strategic framework which is used to evaluate the external environment of a business by
breaking down the opportunities and risks into Political, Economic, Social, Technological, Environmental, and Legal
factors. It can be an effective framework to use in Corporate Strategy Planning and for identifying the pros and
cons of a Business Strategy. By understanding the impact these external factors can have on an organization, it
becomes handy for organizations to plan better.

How it fit in the marketing canvas It is important to understand the macroenvironment to ensure that their
strategy is aligned with the forces of change affecting their business landscape. PESTEL analysis helps managers
gain a better understanding of the opportunities and threats they face; consequently, the analysis aids in building a
better vision of the future business landscape and how the firm might compete profitably. When a firm is
considering entry into new markets, these factors are of considerable importance. It provides insight into the
status of key market flatteners, both in terms of their present state and future trends.

Select a product and do the analysis

Oreo is a sandwich cookie consisting of two wafers or biscuits with a sweet crème filling. The consumers relate the
brand mainly to dunk and dip cookies with reach cream and strong flavor. Also, the distinguished packing in terms
of design also helps the consumer in identifying the brand easily.

Political Factors:

Mondelez, the company which produces Oreo, came out with a statement showing its concerns for the political
uncertainties in the areas where it operates. The company pointed out that the increased trade tariffs, United
Kingdom’s pending decision of an exit from the EU, the global economic slowdown, Demonetization in India among
others factors can have an adverse impact on Mondelez as well as its product Oreo. After its parent company
shifted one of its facilities from U.S.A. to Mexico, President Donald Trump came out with a statement saying that
he has stopped eating Oreos now. U.S.A.’s decision of having a border adjusted tax with Mexico had a little effect
on its sales. Moreover, the anti-globalization measures taken by the U.S. government can also cause other nations
to introduce trade barriers which can further affect Oreo’s revenues

Economic Factors:

One of the most important factors which affect Oreo’s performance is the price fluctuations in the raw materials
like Cocoa, wheat, sugar etc. The company said that Cocoa which is one of the most primary inputs required for
making the Oreo cookies is fluctuating since sometime now. Any increase in its cost can cause Oreo to either
increase or decrease margins. Both ways, it’s profits can decrease significantly. Also, a significant chunk of Oreo’s
revenues is generated from the UK’s market. So, in case of a Brexit, the new trade tariffs and the much vulnerable
supply chain can have a severe impact on Oreo’s revenues and profits.

Social Factors:
Oreo has a huge line of products. Till date, it has more than 180+ products. The huge portfolio helps it in reaching
out to a bigger audience. The primary buyers of Oreo cookies are Children and teens aged between 6 to 18 years.
So, while launching any of its new products or making changes in the existing products too; Oreo needs to take
care of the preferences of these children. Most of these school going children prefer eating cookies with high
cocoa and sugar content in it. But since the consumer’s eating habits change very rapidly people may start shifting
from this sugar loaded cookies to healthier cookies. In such situation either the sugar content needs to be reduced
or a healthier version of the cookies needs to be introduced.

Technological Factors:

Since a major part of Oreo’s IT and operational activities are managed by the third-party leaving it vulnerable to
cyber-attacks. In case such a situation arises, then Oreo might have to coordinate with its system providers which
might further increase its costs. Any malware attacks on the systems can cause a complete standstill. In the year
2017, one such incident took place in which the systems got infected with virus due to which Oreo’s sales were
affected. With the introduction of the e-Commerce, companies are selling across the big e-commerce platforms.
This opens up new opportunities for Oreo to increase its customer base but also compels it to maintain more client
critical information which can make them vulnerable to cyber-attacks.

Legal Factors:

Since being a product in the food industry, Oreo needs to adhere to the FDA regulations. In the past, a case was
filed against it by a public lawyer claiming that Oreo uses a lot of trans fat in making its cookies which is very
harmful to human health. He wanted that children should not be allowed to purchase Oreo from the retailer. In
September 2018, its biggest competitor, Hydrox, came out with an allegation that it is using predatory and
unethical practices to cannibalize its market share. Hydrox shared a post from its official Facebook account
claiming that its salespersons are trying to hide their Cookies from the Supermarket shelves to remove the
competitor from the market. Although allegations have been made, but there has not been any evidence in
support of them. So, Oreo has been able to maintain a good brand image.

Environmental Factors:

Mondelez, the company which produces Oreo, has been responsible for clearing up of more than 700 square kms.
of forest land in the rainforests of Indonesia.

The company has been using these forests for the sourcing of palm oil for its products. Although, the company
took measures to undo the damage by removing 12 of the companies from its supply chain. The company should
start finding alternatives for palm oil.

To conclude, the above Oreo 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.