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PESTEL Analysis of Craft Beer Industry

Pestle Analysis
pestel analysis craft beer industry

PESTEL analysis stands for Political, Economical, Social, Technological, Environmental, and Legal factors. This analysis framework is used to get a complete detail about the challenges faced by an organisation. In this blog, we are going to talk about the PESTEL analysis of craft beer industry, where our experts have discussed all the challenging factors of Craft Brew Alliance, Inc. 

Craft Brew Alliance, Inc. PESTLE analysis is a tool which is used to analyse the organisation’s macro environment. Changes in macro environment may directly affect not only the Craft Brew Alliance Inc. but also the other players of the Beverages – Brewers. The macro-environment factors also affect the PORTER’s 5 forces which shape competitive landscape and strategy. Also, it affects the overall profit of the Consumer Goods industry and individual’s firm’s competitive advantage. 

Now, let’s begin the PESTEL analysis factors that affect Craft Brew Alliance, Inc. 

Political Factors

Political factors has an important role in identifying factors which effect the Craft Brew organisation’s long term profit in few market or country. Craft Brew Alliance is operating its business in more than 10 countries and reveals itself in different political systems and political environment risks. Thus, it becomes important to diversify the political environment systematic risks. You are required to closely analyse the below-given factors before investing or entering in a market-

  • Political stability and beverages importance 
  • Military invasion risk
  • Corruption level 
  • Bureaucracy and beverages interference 
  • Legal framework enforcement
  • Protection for intellectual property 
  • Consumer Goods trade regulations & tariffs 
  • Favouring trading partners
  • Anti-trust laws that are concerned to Beverages – Brewers
  • Pricing regulations 
  • Taxation and incentives
  • Wage legislation 
  • Work week regulations 
  • Employee benefits
  • Industrial safety regulations 
  • Product labelling 

Economic Factors

The Macro environment factors like savings rate, inflation rate, foreign exchange rate, interest rate, and economic cycle identify the collective investment and aggregative demand in an economy. Whereas micro environment factors like competition norms affect the organisation’s competitive advantage. The Craft Brew Alliance, Inc. might use the country’s economic factors like inflation, growth rate, and industry’s economic indicators like consumer spending etc. in order to predict the growth trajectory. Some of the economic factors are illustrated under – 

  • Economic system types in term of operation within the country
  • Government intervention and concerned consumer goods
  • Exchange rates 
  • Stability of host country currency
  • Financial market efficiency 
  • Infrastructure quality 
  • Comparative advantages of consumer  
  • Workforce skill level 
  • Education level 
  • Labour costs and productivity cost
  • Business cycle stage including recession, prosperity, recovery
  • Discretionary income
  • Unemployment rate
  • Interest rates
  • Economic growth rate
  • Inflation rate

Social Factors

The way in which we do things or society’s culture are another factors that affect the organisation’s culture in an environment. Population attitudes and beliefs have an important role in the ways in which marketers at Craft beer industry understands the customers. Here are the few highlights of the social factors analysed in PESTEL analysis: 

  • Skills and demographics level of the population
  • Power structure hierarchy and class structure in the society.
  • Education level and education standard 
  • Attitudes 
  • Culture such as social conventions, gender roles, and more
  • Leisure interests
  • Broader nature and entrepreneurial spirit within the society

Technological Factors

Technology is one of the fastest disrupting factors that impact the industry. Transportation industry can be the best fit example for this. Taxi industry has now been controlled by players like Lyft and Uber. Similarly, car industry has too moved forward rapidly toward automation that is being led by technology firms like Google & few manufacturing is discontinuous by Tesla. Thus, an organisation needs not only to analyse the industry by technology but also the speed through which it is affecting the industry. However, the factors concerned to technology –

  • Recent development in the field of technology
  • The impact of technology in product offering
  • Effect in cost structure 
  • Effect on value chain structure 
  • Impact on technological diffusion

Environmental Factors

Being a marketing student, you may be aware that each market has different environmental standards and norms that can affect the organisation’s profitability level in a specific market. Even different states of a country may have different liability and environmental laws. Thus, it is important to carefully and clearly analyse and evaluate the environmental standards of the market in which a new business is about to operate. Here are the certain environmental factors to be considered –

  • Climate change
  • Weather
  • Laws regulating environment pollution
  • Recycling
  • Waste management 
  • Water and air pollution regulations
  • Endangered species
  • Attitudes toward ecological products
  • Renewable energy support

Legal Factors 

In several countries, the legal institutions and framework are not burly to protect the organization’s intellectual property rights. An organisation should clearly analyse before entering markets as it leads to theft within the organization. Few of the legal factors are –

  • Anti-trust law
  • Copyright, patents / Intellectual property law
  • E-commerce and consumer protection 
  • Health and safety law
  • Discrimination law
  • Employment law
  • Data Protection

If you are a student and assigned with PESTEL analysis of craft beer industry, then you might be aware with all the factors that have been discussed above. 

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Author: Mike

I am a subject matter expert in assignment writing and have been associated with http://www.onlineassignmentexpert.com for a few months now. I believe that students should get professional help with their assignments and I am here to help. Contact me on contact@onlineassignmentexpert.com

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