Sample Solution

the milk turning bad. Also, climate will cause the production and delivery to delay.

Legal

Legal Factor may often be overlap with political, however it involves more specifics laws such as health and safety law or consumer protection law. Organizations should know what is legal and what is not in order to run businesses ethically (B2U – Business-to-you.com, 2019). Health and safety law is needed so that the company will hold responsibility for the workers. It is the company’s responsibility to ensure that the workers are treated ethically. In addition, consumer protection law is to protect consumers from buying milk that are of low quality or other aspects that A2 Milk guaranteed but not fulfilled. Furthermore, Food standard codes is required for to comply with the laws of standard in operation.

Conclusion on PESTEL Analysis

In conclusion, PESTEL seeks to address opportunities and threat which A2 milk may face from external environment. It is crucial to note that all factor from this analysis would have a huge impact to A2 milk. This will allow A2 Milk to make better choices for the company in the future.

INDUSTRY ANALYSIS (PORTER’S FIVE FORCES FRAMEWORK)

The industry analysis is a framework that helps to determine the attractiveness of an industry that highlights five competitive forcers including threat of entry, threat of substitutes, bargaining power of buyers, bargaining power of suppliers and the extend of rivalry between competitors. Furthermore, it can help organizations to build sustainable competive advantage in the milk industry.

The threat of entry

This determines how easy it is for new companies to enter a particular industry. When the barriers of entry into an industry is high, there are lesser businesses entering the market due to strong competition and vice versa (My Accounting Course, 2019). In this industry, it is hard to enter because the threat of entry is low, hence causing the barrier to entry is high. The following factors are some reason that justify the low threat of entry.