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PESTEL Analysis: Political Factors

PESTEL analysis is the framework that categorizes external environmental influences on an organization

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Nudrat niaz
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117 views

PESTEL Analysis: Political Factors

PESTEL analysis is the framework that categorizes external environmental influences on an organization

Uploaded by

Nudrat niaz
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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PESTEL Analysis

PESTEL analysis is the framework that categorizes external environmental influences on an


organization into six main types: Political, Economic, Social, Technological, Environmental,
and Legal. As any of these factors changes, it affects the competitive environment in which
organizations operate. Hence, it is important to understand how PESTEL factors might
impact on and drive change in the industry, market, or individual organizations.

PESTEL Analysis of Murree Brewery:

I. Political Factors:
The country elections were held as planned on 25th July, 2018 when Pakistan
Tehreek-e-Insaaf (PTI) won. The new government imposed high taxation policies
due to which production cost increased significantly that, ultimately, led to
increasing the prices of final products to consumers. The price per tray increased
from 250 to 330 per tray. The Supreme Court of Pakistan taking suo moto action
announced his intention to tax the beverage industry Re. 1 per litre of surface and
underground water which would not be passed onto the consumers. The order
issued effective from December 2018 applies to all industries consuming water in
Pakistan, the rules for which have not yet been issued. The company has installed
meters to calculate the water consumption and like the beverage industry has
lodged a review petition, which is pending in the Supreme Court.
II. Economic Factors:
Weak economic conditions have led to devaluation of Pakistani rupee in
international markets, due to which cost of raw materials being imported by
Murree Brewery have increased. Murree Brewery division’s gross profit
decreased by 24 million and operating profit by 21 million in 2019 as compared to
2018, due to these increases in cost of raw material, depreciation and distribution
cost. The government has had to curtail subsidies as part of IMF conditions,
resulting in substantial increases in the cost of the electricity and gas. This
together with devaluation of rupee has resulted in double digit inflation. Foreign
Direct Investment has reduced drastically.
III. Social Factors:
Murree Brewery contribution to CSR (Corporate Social Responsibility) as the
company continues to give the use of its property to Association for Page 6 of 16
special persons (DARAKHSHAN). Presently, 75 disabled women are getting
training in this vocational school for helping destitute handicap women, located in
the Rawalpindi area, to be self reliant, computer literate and contributing member
of the society. The above property has been provided free of charge buy the
company with furniture and fittings, and also bears the cost of utilities and
maintenance. The company also donated Rs. 4.9 million towards various charities
and hospitals. Country wide tree plantation is encouraged by the government. The
company has planted many trees on its property. Murree Brewery ensures an
equal opportunity and harassment free environment for its employees and also
provides health and safety precautions around the plant.
IV. Technological Factors:
All packaging and production machinery is provided by Tetra Pak to Murree
Brewery, including storage, homogenizer, pasteurization, blending plants,
conveyor belts along with packaging, cartons, straw patching glue. All of these
machineries are serviced quarterly.
V. Environmental Factors:
Murree Brewery is strongly committed to sustainable environmental and quality
management, which has been recognized by the society and independent
certification authorities. The company supports environmental issues and
promotes greater environmental responsibilities and has achieved certification of
ISO-14001:2015, for fulfilling environmental standards and ISO-9001:2008, for
fulfilling quality standards. The company continues to test the emissions and
effluents to laboratories approved by Pakistan Environment Protection Agency.
Murree Brewery is in contract with a local company that picks up waste daily
from the manufacturing plant. The company ensures in-time service of Page 7 of
16 machinery and is in plan to producing one flavour per day to reduce
manufacturing waste.
VI. Legal Factors:
The company has fully complied with the requirements of the Listed Companies
(Code of Corporate Governance) Regulations, 2017. Proper books of account have
been kept by the company as required by the Companies Act, 2017. Zakat
deductible at source under the Zakat and Ushr Ordinance, 1980, is deducted and
deposited in the Central Zakat Fund, established under section 7 of that ordinance.
Murree Brewery is a Halal certified company and is also OHSAS-18001:2007
certified (OHSAS: Occupational Health and Safety Assessment Specification),
Food Safety Management ISO-22000:2005 certified. Shelf life of Murree
Brewery products are certified by Pakistan Scientific and Industry Research
Division.

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