ASSESSMENT TASK 2

WRITTEN ASSESSMENT: ENVIRONMENTAL ANALYSIS

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Executive Summary
Almo-Milk is the Australian grown company producing high quality Almond milk and
delivering it in every state of Australia. The company has also expanded its business in
New Zealand, Hongkong and Singapore. Now the company has planned to enter UK. This
report has analysed the environmental factors that can influence the decisions of the company
related to international marketing. From the analyse, it has been observed that High
purchasing power of people of UK and increased per capita income would make the people
able to pay premium prices and the company can adopt premium pricing strategy. A large
number of youngsters in the population and their health- conscious approach would increase
the demand of Almond milk in future. E-marketing facility would also help the company to
cover a large segment of the population. Employment act and equality act would maintain
fairness to the employees working with the firm and it would increase their potential. The
packaging and distribution of the products according to the rules and regulations of the
country would reduce the legal threats to the company in UK. In short, Almo-Milk has great
opportunities to expand its business in UK, because environmental factors have positive
influence on the decisions of the company related to marketing.
Table of Contents
Executive Summary...............................................................................................................................2
1. Introduction.......................................................................................................................................3
2. Environmental factors influencing international marketing decisions...............................................3
3. Identification of Opportunities and threats for Almo Milk In UK.......................................................7
4. Conclusion.........................................................................................................................................8
5. References.........................................................................................................................................9
1. Introduction
Almo Milk is the first Australian grown Almond milk company that is supporting 140
Australian Almond Growers. The company came into existence in 2015 and started launch of
its products in march 2016. The objective of Almo Milk is to provide premium quality
almond milk which consists of pure almonds and no questionable additives. The word Almo
itself means simplicity and quality. The founder of Almo Milk Linda Monique was aimed at
providing clean and sustainability focused food to an adulterated health food industry.
Therefore, she started Almo milk with the vision “to produce the most nutritious and
delicious plant-based products and beverages in the world” (Almo, 2021). The mission of
Almo Milk is “to help nourish and sustain our consumers, communities and environment”
(Almo, 2021). The main philosophy of Almo milk is to centre around one belief that is
Meliorism. The company beliefs that it is through human efforts that the world can be
made better.

The product “Almo” offered by the company is 100% Australian owned made and grown
almond milk. The taste of this almond milk is exceptionally delicious. This award-winning
almond milk is produced in partnership with Almond Co-op of Australia. In this way, the
company Almo-milk is supporting 85% Almond growers in Australia. The targeted segments
of the company for the sale of its products are independent retail, health food grocers, cafés,
restaurants, hotels and online (Agarwal, et al., 2020). This Almond milk produced by
company is stocked in almost 400 outlets in all over the world. This Almo milk is available
in every state of Australia and now it has expanded its business in New Zealand, Singapore
and Europe. The company has planned to expand its business in other countries of the
world. This report has thrown light on the identification and explanation of environmental
factors that may have impacts on international marketing decisions of the company and
can create opportunities/threats for Almo milk in UK.

2. Environmental factors influencing international marketing

decisions
In past four decades, it is due to advancement of technology and growth of economies, level
of global trade has increased. This growth of trade has motivated various companies to
involve in international marketing. But the implications of international marketing are
completely different from domestic marketing. The difference arouses due to differences in
cultures, economic conditions, political stability and various other environmental factors. The
marketers need to understand these environmental thoroughly before carrying out marketing
activities at international level. This section of the report has analysed the environmental
factors which can affect the decision of Almo Milk for its marketing activities in UK. The
main environmental factors considered in this analysis are socio-cultural, economic, legal and
political factors.

 Socio- Cultural factors

According to Fletcher (1979), culture is the way of life in a society and helps in binding the
groups together. The main elements of a culture that influence business environment in an
economy are material culture, social institutions, relation with universe, aesthetics and
language (Berthon, et al., 2018). A culture consists of all the elements of marketing mix;
therefore, it is essential for international marketers to consider knowledge, sensitivity,
collectivism, social conventions and cognitive styles. Social factors, on the other hand,
consists of the behaviour and attitude of the society. The consumer market of UK is very
large. According to National statistics report, 2019 of UK, the population of UK in 2018 was
66.4 million and it is expected that the population will reach 74 million by 2039. The birth
rate in the country is exceeding which is creating new opportunities for the businesses to fill
the needs of people.

18% population of UK is aged more than 65. That means a large segment of the population
consists of youngsters. The population of UK is multicultural, but there is a high influence of
social class. Therefore, various companies are entering this market with new products to cater
with the needs of the different cultures and races. This multicultural environment of UK
explores various new opportunities for the businesses (Brown, 2017). UK is among top 10
countries of the world with highly educated population. The country has also ranked third
among the best countries of the world. There is high cost of living and education in this
country.

The official language of UK is English. But Irish and Scottish are widely used languages in
UK. People in this country are health conscious. It would increase the demand of almond
milk in future. Moreover, health care system in the country is also very strong. British health
care system is known as the best healthcare system in all over the world. Education system in
the economy is based on updating new knowledge, therefore, it is also preferred by people
from all over the world (Cooper, 2018). Low level of unemployment in the economy and
reasonable inflation has increased per capita income of the people in the economy. This
factor is a great opportunity for the new businesses to expect high demand of their products in
the economy.

 Political factors

The government of an economy plays an important role in international marketing by

participating in commercial activities such as transport, infrastructure, defence, health,
education and public welfare and by being a sole customer of the products offered by the
business. The government also acts as a facilitator at micro as well as macro level (Salam,
2018). At micro level, the government facilitates the businesses through export incentives,
tax incentives, subsidies, concessions and loans (Crowther, 2019). At macro level, industrial
policies formulated and implemented by government facilitates the businesses through
national industrial policies, national economic plans, harnessing the resources of the private
sector and provision of external sources through bilateral and multinational aid.

UK is known as politically stable country. There is not only a single factor that determine the
stability of the government. The main factors associated with stability of the government are
rule of law, level of corruption in the country and governmental policies. Effective
performance of the government in all these aspects would not only make the country
politically stable but it would also be known as the successful government (Elsayed, 2017).
This political stability of UK attracts various businesses to invest in this country.
UK is known as the most powerful country of the world. It consists of a governmental system
with constitutional monarchy and parliamentary democracy. The head of the government in
the country is prime minister and head of the state is monarch. Four main political parties
which dominates the whole country are Scottish national party, labour, libel democrats and
conservative
UK is a permanent member of United Nations. Therefore, it has strong influence of global
political, economic, social, cultural, military and scientific issues. There are various social
and cultural values in common between USA and UK (Sukhwant, 2018). These common
values make them strong allies. From long past, these two countries have maintained friendly
relations. But exit of British from European union has created a situation of uncertainty in the
country (Fanning, 2018). Many investors also believe that this exit from European Union
would enhance the economic prosperity of the Nation and would generate new employment
opportunity. It would be a beneficial opportunity for the business to launch new products
because increased purchasing power of the people would let them purchase the new products
as well.

 Economic factors

According to 2019 statistics, GDP of UK was 2.744 trillion US dollars. The country ranked
6th at global GDP. The per capita income of the country was 41030 US dollars. It was among
top 20 countries with the highest per capita income. The main reason behind the success of
UK economy is diversity of the economy. The diverse markets of UK provide equal
opportunities for growth of all the businesses. In this way, it adds values to the lives of the
customers by providing them which further increases the demand of products in the market.

Multicultural economies make it easy for the foreign investors to set up their business in the
economies. UK has diverse culture; foreign investors can easily live and grow in this
economy. Various foreign investors have invested in different sectors such as real estate,
science, technology, food, clothing, grocery, entertainment, and sports (Grebitus & Bruhn,
2018). There is a long history of cultural exchange between UK and Australia. Therefore,
Almo can easily adjust in the culture of UK and would be able to attract a large segment of
customers.

Current rate of corporate tax in the economy is 19%. It is expected that this rate of tax would
reduce in the coming years. It would prove beneficial for the investors to invest in this
economy in such a situation. The inflation rate in the economy is almost stable. Current rate
of inflation is 1.94% (UK, 2018). Only a slight increase in the inflation rate has been
observed in the economy from past few years. It is a good indicator for the investors. It is also
expected that there would not be high variation in the rate of inflation in economy.

According to statistics of February 2020, the rate of unemployment in UK was 3.8%. This
rate has decreased as compared to the rate of unemployment in the previous years. This
indicates that per capita income of people in UK is increasing (Guardian, 2018). It is a great
opportunity for the new companies to enter this economy with their products, because with
high purchasing power, people would be able to afford the products and they would be
attracted towards the quality products offered by the company.

 Technological factors
There are world’s leading research and development institutes in UK. These institutes are
continually making efforts for breaking the barriers in every field. Therefore, UK is providing
great opportunities for the entrepreneurs. E-marketing is a unique concept that helps the
business for marketing of their products. This electronic market provides a wide platform for
the businesses and overcome all the barriers such as cultural differences and other
environmental factors (Kim & Ko, 2018). The main focus of the e-marketing is to reduce cost
and to enhance the reach for the product for the customers. The cost of marketing through
this platform is quite low as compared to other methods. E-commerce has also made it
possible for the businesses to remain open 24/7. These digital marketing strategies through
use of technology have made it easy to deliver the product to the customer in short span of
time, made the prices of the products transparent to the customers, made it easy to promote
and advertise the products through internet and provided an online place to sell any kind of
products to the people from all over the world. UK has adopted refined form of this
technology very fast and has become a source of attraction for the investors to invest in their
markets.

 Legal factors

Some unfavourable outcomes due to legal uncertainties can arouse legal risks for the new
organisations investing the country (Kotler, et al., 2019). The main factors associated with the
legal risks are non-compliance with laws and regulations, changes in laws and regulation,
failure of the protection of legal rights and interests of the company, contractual and non-
contractual liabilities, disputes and litigations

Legal risks in international marketing

 In case of a new product, the legal risks can occur due to physical and chemical
aspects and packaging and labelling requirement of the product. Therefore, it is
essential for the new companies entering UK to be aware about the legal requirements
regarding packaging and labelling.
 Legal risks in terms of price can be related to price control policies, taxation, size of
profit margin, dumping and transfer pricing (Kriger & Zhovtobryukh, 2018).

The companies operating in UK and the new companies which want to enter the country they
are required to follow rules and regulations according to Employment Act 1996. Equality act
2010 also protects the employees from being discriminated on the basis of race, gender and
colour. The marketing decisions of new companies investing in the economy can highly be
influenced from these legal factors because these acts would help in increasing the potential
of the company for making decisions.

3. Identification of Opportunities and threats for Almo Milk In UK

From the above discussed environmental factors, it can be analysed that Almo-Milk has
various opportunities as well as threats if it enters in UK because there are various factors that
would influence the marketing decisions of the company. The opportunities and threats for
Almo-Milk in UK are as follows.

Opportunities

 A large segment of the population in UK is youngsters. Thus, digital marketing

strategies would best help the company to attract the attention of these customers in
UK (Marquardt, 2017).
 The company has a great opportunity to enter UK with the joint venture strategy by
joining hands with the already established company. It would help the company to
make its name in the market and soon the customers would start recognizing the
products of the company from its quality.
 High purchasing power of the people in UK and diverse culture of the economy are
great opportunities for the company to set premium pricing strategy to sell its
products in the market because the customers would be able to pay high price for the
quality products.

Threats

 There are various other companies already supplying Almond milk in UK. The main
competitors of the company in UK would be Winner, Runner-up, Aldi ACTi leaf,
plenish, blue diamond and Morrison. Therefore, the company would have to plan for
unique marketing strategy so that it can attract the attention of a large segment of
customers.

4. Conclusion
The report concludes that Almo Milk has great opportunities to expand its business in UK.
The situation of environmental factors in the economy also indicates that there would be
positive influence on the decisions of the company related to marketing strategies. The
company would be able to attract a large segment of the customers in UK because people are
more health conscious and high purchasing power of people would also make them pay
premium prices. But the company need to adopt unique marketing strategies to differentiate
from the existing competitors in the market.
5. References
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Brown, 2017. Developing a Strategic Marketing Orientation in a Large Industrial Firm.. Industrial
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Cooper, P., 2018. Decline in the status of household decision making. European Journal of
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Elsayed, A. N. M. E., 2017. 'The Key Determinants of the Voluntary Adoption of Corporate Internet
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Salam, A. E., 2018. ’The Introduction and Application of International Accounting Standard to
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