Competition is the performance challenge between businesses to increase sales and acquire more customers by regularly adjusting to market needs and demands. The more the consumers, the higher the market share; the more the sales the higher the chances of making more profit. It is, therefore importance to stay ahead of your competitors. Competition is also a tool for innovation. Innovation is vital if any business is going to excel. It brings about new ideas and sees them getting effectively tested in a relatively short amount of time. If things were going well for any business, it probably would take the businesses longer to brainstorm and implement new ideas.
purchasing power means consumers have more income to purchase more milk to adjust to their healthy lifestyle. This will create an opportunity for A2 to earn more. However, Australia economy is experiencing a slow growth, this will cause the profitability to decrease. In addition, some parents prefers to breastfeed their child therefore, this creates a threat to the demand of infant milk.
Social
Social factors are general environment that represents the demographic characteristics, norms, customs and values of the population within which the organization operates (B2U – Business-to-you.com, 2019). Infant milk industry, the targeted audience would be babies, however some parents prefer to breastfeed their child.
Technological
Technological factors are revolution in technology that may affect the operations of the industry and the market favourably or unfavourably. It also affects the decision of the company whether to enter certain industries or to launch a product (B2U – Business-to-you.com, 2019). Factors that affects the operations could be one of the few followings impact on cost production, impact on product offer and technological development. If all the technology implemented by A2 Milk benefits the company, other competitors will try to copy their ideas. All the mentioned factors are all interconnected in technology because if the innovation is popular and it affects competitors revenue, others wills try to copy the idea. These are factors that needs to be monitored at all times, causing it to be a threat. However, with technology, it will still help to generate great profit to the company and the earning can be used for research and development to enhance their profitability.
Environment
Environment factors has surfaced due to increasing scarcity of raw materials, pollution targets and carbon footprint targets set by governments (B2U – Business-to-you.com, 2019). In the milk industry, it is heavily dependent on the health and availability of livestock. There are several factors that could affect the livestock, such as diseases or climate change. Diseases will have impact on the cows and this will cause a decline in quality of the milk and supply if cows are being slaughtered. In addition, climate change will affect the quality of the milk cause manufacture needs to find ways to preserve the milk under the weather conditions without the milk
