Environmental and Industrial Analysis of UK Food Manufacturing Companies

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Table of Contents

Tasty Bake Food Company – Overview
PESTEL analysis of the Tasty Bake Company
Industry Analysis
References

Tasty Bake Food Company – Overview

Tasty Bake is a company in the UK which is under the food manufacturing sector. It started its operations in 1981 in Birmingham and has over the years provided its clientele with high quality products. Some of its products include pitta bread, sausages, fruit juices, saveloys and chicken nuggets among other foods (Free Index, 2011).

PESTEL analysis of the Tasty Bake Company

Political Analysis

PESTEL analysis focuses on the external factors that determine the growth or decline of an industry. It focuses on the political, economic, social and technical factors that impact on an industry either positively or negatively. It also focuses on whether the aforementioned factors pose threats or opportunities to the sector.

The UK politics has just recently welcomed a new government whose priorities bend towards reviving the ailing economy and this includes reawakening the manufacturing industry. The positive attribute is that the UK coalition government recognises the need for manufacturing companies and has thus gone into initiating the low carbon economy.

Notably, the manufacturing industries are performing better now and the government is keen on working with the private sector. For a prolific manufacturing industry, the UK government will have to change its policies on spending cuts as well as the tax increments. The political environment thus seems to favour the manufacturing industries that include food production companies such as Tasty Bake in an effort to salvage the economy (Hopley, 2010).

Economic Analysis

The economic factor has threatened the Tasty Bake Company in the UK due to the declining importance accorded to such industries. The UK has prioritised the insurance, business and banking sectors as they provide it with a huge GDP as compared to other sectors. The economic global recession has further pushed the Tasty Bake Company into decline and it is only lately that the government is working hard to stabilise the economy (Report Linker, 2011).

Socio/ Cultural Analysis

A myriad of changes have taken place in the social environment in regard to the food manufacturing companies in the UK. In the recent past, the number of female workers has increased and this means that home meals preparation has gone down. The Tasty Bake Company has therefore embarked on ensuring that they meet the growing demand of precooked supplies which do not require a lot of preparations.

The company also ensures that the products it manufactures meet the required health and nutritional value as people become more aware of such issues. Their customers have also demanded for a variety of products and that is why the company has introduced juices and chicken nuggets to its menu (Tasty Bake, 2011).

Technological Analysis

The technological analysis has affected the Tasty Bake Company positively in that the global transport infrastructure has greatly improved in the recent past and this has enabled it to market its products widely. In addition, information and communication technologies have greatly advanced and this has also broadened its market base. The elimination of both tariff and non tariff barriers has also contributed to the growth of this company in that it is now able to reach a wider market base as it can trade in various geographical locations (BIS, 2010).

Environmental Analysis

The Tasty Bake Company behaves in a socially responsible way when it comes to meeting the laid down obligations. This it manages through corporate governance and regulations as stipulated by the UK laws on manufacturing products. The company thus ensures that it minimises its damage to the environment and also cuts on production waste. In addition, the company generates a sustainable consumption and has embarked on a project aimed at cutting on the consumption of resources (Tasty Bake, 2011).

Legal Analysis

Tasty Bake has been affected greatly by the government legislations and policies which include the Code of Practice which is imposed by the Food Retailing Commission (FRC). This code has led to an overhaul of how the system works and this has affected the output. The government also introduced monopoly policies and this affects its access to raw materials which in turn affects its production (Tasty Bake, 2011).

Industry Analysis

Threat of New Entrants

The UK food manufacturing industry has several competitors some of them being Dominos, Fresh Food, Baking Boys, Greys Teas and Wensleydale among others (British Companies, 2011). In the recent past, this sector has grown drastically as operating efficiency increases and more people result to buying processed and easy to prepare meals.

However, new entrants have a hard time trying to venture into the UK food manufacturing sector due to high start up capital and huge fixed running costs. They are also bound to suffer stiff competition presented by the existing companies which have better distribution and experience in product development (Porter, 1998).

Bargaining power of Suppliers

The Tasty Bake Limited and other food manufacturing companies in the UK greatly influence the power of suppliers. Suppliers have the fear of loosing some of their larger clients and this is the chief reason why they supply them with goods and services at a reasonable cost. This puts the smaller companies at a disadvantage since they are not able to negotiate for fairer supply prices. Suppliers are also threatened by the fact that their clients can source these products from abroad and this prompts them to supply them cheaply.

Competitive Rivalry

The UK food manufacturing industry is highly competitive and that is why the likes of Tasty Bake have had to become more innovative to maintain their clientele. They have to keep abreast with changing consumer behaviour and in the long run refocus on their services; the value and price of their products which has enabled them rebuild their market share.

Bargaining power of buyers

The various brands available in the market empower the buyers by providing them with a large variety to choose from. The manufacturing companies thus have to come up with practical customer retention strategies which ensure loyalty to their products according to Porter (1998).

Tasty Bake limited and other food companies in the UK have therefore been forced to customise their services by offering their clients better choices and low prices. They have also had to conduct promotional activities which ensure that their products remain relevant to the consumers. The products manufactured must also meet high standards if they are to compete both locally and internationally with a customer base which is more enlightened on what is best.

Substitutes

There are many alternatives in the market and this often leads to a drop in the demand of particular products as consumers make switches to those that best suit their needs. This general substitution is occasioned by the availability of new trends in the market which may appeal more to the consumers. This trend has prompted the Tasty Bake Limited to become more innovative and flexible in the packaging and pricing of their products to ensure that they survive the threat (Porter, 1998).

Impact of this analysis to the short-term and long-term sustainability of Tasty Bake Company

Both PESTEL and Industrial analysis of Tasty Bake Limited have highlighted key factors that the company needs to address as they have either a short term or long term impact on the company. This company has a strong brand image and must ensure that it upholds its market share.

It must therefore manage its products lifecycles and at the same time provide its consumer base with a variety of products to meet their changing needs. On the other hand, Tasty Bake Limited must remain innovative and enhance its delivery of top of range products. Social responsibility is of essence and the company must ensure that it keeps the environment safe even as it seeks to expand.

It must remain flexible to match the constantly changing environment and also be aggressive enough to handle the growing competition in the market. The internet is a growing market for its products and it must therefore embrace the new technology to ensure that it reaches a wider market.

In the long run, Tasty Bake Limited must concentrate more on issues that affect its competitive advantage if it is to gain an edge in the market. These issues include remaining unique to ensure that it is hard for their competitors to imitate them. The company must also seek to be more beneficial to the customer by implementing an efficient customer interface (Porter, 1998).

References

BIS (2010) Manufacturing in the UK: An economic analysis of the sector. Department for Business Innovation & Skills, 10(1), 5.

British Companies (2011) Food and Drink Companies. Web.

Free Index (2011) Tasty Bake: Company Description. Food Manufacturing Companies, Birmingham. Web.

Hopley, L. (2010) What will a new form of politics mean to UK manufacturing? Manufacturing Company Reports, 1(10), 2-7.

Porter, M. E. (1998) Competitive strategy: techniques for analyzing industries and competitors. New York, The Free Press.

Report Linker (2011) United Kingdom: Economy statistics and industry reports. Web.

Tasty Bake (2011) Tasty Bake Limited – Food Manufacturer, UK. Web.

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