Essay Sample: McCain PEST Analysis

PEST analysis includes political, environmental, socio-economic, and technological factors that play a critical role in determining a firm's future. Businesses conduct a PEST analysis to identify threats and opportunities posed by various elements in the industry. Notably, McCain Foods utilizes opportunities in the market to increase its competitiveness and enhance its growth.

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Political Factors

Political forces affecting McCain Foods include the Healthy Schools food and beverage policy in the United States and the United Kingdom. For instance, the state of Ontario introduced the plan to ensure that all consumable products sold in schools meet the countries nutritional standards (Ontario Ministry of Education 2019). In this case, companies providing foodstuffs to schools in the state must follow the regulation. As a result, McCain Foods has partnered with various institutions such as the Clinton Foundation top provide American schools with low-calorie foods at a reduced price (Clinton Foundation 2019).

Additionally, McCain Foods observes legal food packaging standards to enhance its domestic and international sales. For instance, the Foods Standards Agency and Guideline Daily Amounts mandate food companies to label their products with 'traffic lights', which display ingredients to enable people to make informed choices concerning their purchases (Smith 2006). All of McCain British and US products have been labelled in response to the regulations.

Economic Factors

Buying patterns, consumer preference, and market demand for frozen ready prepared foods have increased tremendously with the increase in consumer income levels. In this case, customers prefer to purchase top quality ready made products to save on time. Moreover, as people gain more money with limited time due to their work schedules, they shift to foodstuffs, which are easy to prepare. The situation creates a market opportunity for firms in the food industry. The company's product portfolio aims at exploiting the opportunity as many countries such as the United States are facing high employment rates and an increase in the income levels (Trading Economics 2019). Notably, McCain Foods responds to these trends by the provision of a variety of superior ready prepared consumables such as frozen French fries, potatoes wedges, and straight cut chips.

Social Factors

In the past few years, people have changed their lifestyles to natural and healthy foodstuffs to avoid diseases such as cancer. The shift has caused a significant transformation in the ready-to-eat market since people avoid foods with chemical elements. McCain Foods has been in the frontline to ensure it supplies its customers with organic and healthy products. In this case, the company has extended its product line to provide vegetables in the foodservice and retail industries. Moreover, the firm has reduced the amount of salt in its mashed potatoes and improved its products nutritional value (McCain Foodservice 2019). For example, the firm pre-cooks all its potato products in sunflower oil to reduce calorific and added salt values. The situation makes its foods popular among most people around the world.

Technological Factors

Food technology is one of the most dynamic technologies across the world. As a result, companies strive to develop modern techniques for the production and storage of products. For instance, there is an increased demand for freezing technologies that preserve the foods taste and maximize foods nutritional value during production. For example, in 2009, the company was the first to adopt 'perfect chip' technology in Africa, which ensures that oven bake chips retained their taste and texture (Food Stuff 2009). Additionally, the organization adopted the use of drones to collect information about its potato fields (CTV Atlantic 2014). The new technology allows it to maintain a high quality of its products through smart farming.

Overall, the PEST environment provides both threats and opportunities for McCain Foods. Notably, the firm aims at meeting all government regulations in its countries of operations. It also keeps a close watch on consumer preferences and technological advancements to improve its market position.

References

Clinton Foundation 2019, School Meals Agreement. Available from https://www.clintonfoundation.org/our-work/alliance-healthier-generation/programs/school-meals-agreement [16 February 2019].

CTV Atlantic 2014, McCain Foods turns to drone technology to monitor potato crops. Available from https://atlantic.ctvnews.ca/mccain-foods-turns-to-drone-technology-to-monitor-potato-crops-1.1882521 [16 February 2019].

Food Stuff 2009, McCain introduces the 'perfect chip'- thanks to ingredient technology. Available from https://www.foodstuffsa.co.za/mccain-introduces-the-perfect-chip-thanks-to-ingredient-technology/ [16 February 2019].

McCain Foodservice 2019, McCain reduced sodium skin-off Homestyle mashed potatoes. Available from http://www.mccainusafoodservice.com/Product/Detail/McCainReducedSodiumSkin-OffHomestyleMashedPotatoes?backUrl=%2FProduct%2FList%3FCurrentSiteSectionID%3D10 [16 February 2019].

Ontario Ministry of Education 2019, Healthy schools: New School food and beverage policy. Available from http://www.edu.gov.on.ca/eng/healthyschools/policy.html [16 February 2019].

Smith, L 2006, FSA backs 'traffic light' food labelling. Available from https://www.theguardian.com/news/2006/mar/09/food.foodanddrink [16 February 2019].

Trading Economics 2019, United States employment rates. Available from https://tradingeconomics.com/united-states/employment-rate [16 February 2019].