Macro-Environmental Analysis PESTLE

The strategic analysis process begins with a macro environmental study, which

also serves as a prelude to the strategic management process. PEST analysis or

PESTLE analysis refers to the study of the microenvironment.

1. Political Factors

More than any other processed product, Zest-O is a sugar-sweetened beverage

that is linked to increased energy consumption and weight gain. Age-related increases

in both the population's consumption of these drinks and their per-capital consumption

were observed in the Philippines. Over the past 10 years, there has also been a 44%

increase in the percentage of sugar consumed from drinks with added sugar. Filipinos

exclusively drank sugary beverages in 2005, consuming 14.9 grams of sugar per

person per day. 2015 had a 21.4g increase. Along with the rise in health issues, the

government is also raising taxes through the TRAIN Bill Act (Republic Act 10963

Section 47). It was created as a health precaution to address food market

characteristics linked to rising obesity and diabetes rates. Above all, it affects how

customers behave in terms of shopping and spending. proprietor of Zest O Corp. In an

interview, Alfredo Yao said that sales volume had decreased by around 30%. They had

to increase pricing, cut drink servings, and adjust for the tax burden in order to make up

for the loss.

These factors are all about how and to what degree a government intervenes

in the economy or a certain industry. Basically, all the influences that a government

has on your business could be classified here. This can include government policy,
political stability or instability, corruption, foreign trade policy, tax policy, labor

law, environmental law, and trade restrictions. Furthermore, the government may

have a profound impact on a nation’s education system, infrastructure, and health

regulations. These are all factors that need to be considered when assessing the

attractiveness of a potential market.

2. Economic Factors

Companies have had to dramatically alter their sales and marketing campaigns

as a result of the recent recession (COVID 19) that is wreaking havoc on the economy.

We had to shrink our business and reconsider how we entered the market as a result of

the sharp decline in profits. However, the economic slump that began in 2020 has

increased beverage sales for Zest-O, primarily as a result of job losses, time spent with

friends and family, or individuals staying at home. Philippine Business Bank (PBB), the

banking division of Zest-O Group, reported that although the company experienced

double-digit profit growth in the first quarter, its loan loss reserves decreased as the

economy coped with potential threats from financial stress. His bank account has

doubled. caused by early January's natural and medical tragedies.

Economic factors are determinants of a certain economy’s performance.

Factors include economic growth, exchange rates, inflation rates, interest rates,

disposable income of consumers and unemployment rates. These factors may

have a direct or indirect long-term impact on a company since it affects the purchasing
power of consumers and could possibly change demand/supply models in the economy.

Consequently, it also affects the way companies price their products and services.

3. Social Factors

The way people buy Zest-O goods is heavily influenced by sociocultural

influences. This entails, among other things, a greater awareness of one's health.

consumers' commitment to high-quality products and their hectic lifestyles as the effects

of ingesting sweetened sugar are more widely understood by consumers beverages,

they'll probably lean toward choosing healthier options choice. Even if sweetened

beverages are not, this is still true affected immediately. A healthy lifestyle, for instance,

results in less consumption of fast-food items, frequently combined with sugary

beverages. Though this might happen, especially among metropolitan customers, due

to hectic lifestyles. They consume fast food. Therefore, the sum of these two

components results in Zest-O can now choose to strategically concentrate on product

quality with this in mind. The sophistication of consumer tastes is rising.

This dimension of the general environment represents the demographic

characteristics, norms, customs, and values of the population within which the

organization operates. This includes population trends such as the population

growth rate, age distribution, income distribution, career attitudes, safety

emphasis, health consciousness, lifestyle attitudes and cultural barriers. These

factors are especially important for marketers when targeting certain customers. In
addition, it also says something about the local workforce and its willingness to work

under certain conditions.

4. Technological Factors

Companies are embracing new technologies as a result of nicely fits in with all of

your most recent adjustments occur mentioning the greatly rising trend that is now

occurring nearly all companies are using social media or social media's exponential

growth has made interactive participation possible on a larger scale. Zest-O needs to be

a step ahead of the competition in order to offer customers real-time results. The

changes people are going through now using technology and how Zest-O does it to

further boost brand engagement and remember.

These factors pertain to innovations in technology that may affect the operations

of the industry and the market favorably or unfavorably. This refers to technology

incentives, the level of innovation, automation, research, and development (R&D)

activity, technological change, and the amount of technological awareness that a

market possesses. These factors may influence decisions to enter or not enter certain

industries, to launch or not launch certain products or to outsource production activities

abroad. By knowing what is going on technology-wise, you may be able to prevent your

company from spending a lot of money on developing a technology that would become

obsolete very soon due to disruptive technological changes elsewhere.

5. Environmental Factors

Access to water affects Zest-O. I want water beverages are produced by the

beverage industry. Although, if unexpected occurrences like climate change might

cause businesses to catch fire. As a result, this also has an impact on rivals. Then

again, Zest-O the item is a main juice drink with problems accessing water. The

business will suffer a loss. Additionally, we have adopted a "zero waste" strategy.

Politics in their use of water the company Zest-O recycles dedication to environmental

preservation as stated by Yao. The corporation is making more of an effort to recycle

juice packs that are exported abroad and used as waste bags. They reuse their product

packaging after recycling it, but they only use it once another objective.

Environmental factors have come to the forefront only relatively recently. They

have become important due to the increasing scarcity of raw materials, pollution targets

and carbon footprint targets set by governments. These factors include ecological and

environmental aspects such as weather, climate, environmental offsets, and

climate change which may especially affect industries such as tourism, farming,

agriculture, and insurance. Furthermore, growing awareness of the potential impacts

of climate change is affecting how companies operate and the products they offer. This

has led to many companies getting more and more involved in practices such as

corporate social responsibility (CSR) and sustainability.

6. Legal Factors

One of the businesses impacted by goods with added sugar is Zest-O. Drink tax

is a component of the first round of tax reform. Law of inclusion and acceleration. Yao

described how the sector continued tax increases following TRAIN 1 implementation.

The recovery of the industry might take another two years, according to him he added

as well although sales have been weak, the corporation has avoided cutting staff.

Numerous members of our staff have had to contend with the recent reduction in
overtime hours. Their policy as an organization. Zest-O maintains full ownership. Any

relation to their company, including previous and upcoming products patented method.

Although these factors may have some overlap with the political factors, they

include more specific laws such as discrimination laws, antitrust laws, employment

laws, consumer protection laws, copyright and patent laws, and health and safety

laws. It is clear that companies need to know what is and what is not legal in order to

trade successfully and ethically. If an organization trades globally this becomes

especially tricky since each country has its own set of rules and regulations. In addition,

you want to be aware of any potential changes in legislation and the impact it may have

on your business in the future. Recommended is to have a legal advisor or attorney to

help you with these kinds of things.

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Zest-O Corporation planted its humble beginnings as a privately owned family

enterprise founded in May 1981 primarily to engage in the manufacture, marketing and

distribution of food and beverage products in the Philippines. Led by its Chairman Mr.

Alfredo M. Yao, Zest-O was initially known as Semexco Marketing Corporation.

An entrepreneur par excellence, Alfredo Yao has carved a name in Philippine business

through his trailblazing endeavors in various fields such as printing, packaging, food and

beverage manufacturing, real estate development and banking. He holds the

chairmanship of various other companies including Semexo Marketing Inc, Philippine

Business Bank, Asia Wide Refreshments Corporation and AMY Holdings Inc, to name a

few. Concurrently, he is the president of Solmac Marketing, Inc, and SMI Development

Corporation and acts as director for Export & Industry Bank. His most notable awards

include the Ernst & Young 2005 Master Entrepreneur of the Year Award, the Most

Admired Asian Enterprise Award for Innovation Category given by the Singapore

Business Federation, and most recently, one of the recipients of the 7th Annual Tourism

Awards given by the Tourism Committee of Rotary Club Manila.

Zest-O Corporation posted enormous growth over the years. With total company assets

in 1987 of only Php 10 million after 6 ½ years of operation, the company continued its

expansion into different food and beverage products, consolidated sales managed to

post double digit growth bringing total assets up to Php 850 million with annual gross

sales of Php 2.9B in the year 2000.

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A PESTEL analysis or PESTLE analysis (formerly known as PEST analysis) is a

framework or tool used to analyze and monitor the macro-environmental factors that
may have a profound impact on an organization’s performance. This tool is especially

useful when starting a new business or entering a foreign market. It is often used in

collaboration with other analytical business tools such as the SWOT analysis and

Porter’s Five Forces to give a clear understanding of a situation and related internal and

external factors. PESTEL is an acronym that stand for Political, Economic, Social,

Technological, Environmental and Legal factors.