Dilmah Tea is a tea and beverage Sri Lankan multinational company. Merrill J. Fernando founded the tea and beverage company in 1985. Dilmah Tea is the world’s 10th largest tea manufacturing brand. Today, we’ll discuss the PESTLE analysis of Dilmah Tea; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Dilmah Tea
Some of the main political factors in the Dilmah Tea PESTLE analysis are as follows;
I-Import Export Tariff
The government regulations of different countries keep changing relevant to the type of political government that comes into power. They introduce import-export tariffs on the brands and companies from the particular countries. However, the objective of tariffs is to either increase or decrease the inflow and outflow of tea. Dilmah Tea is a Sri Lankan tea brand and the government increased the taxes, which negatively impacted the company’s sales and revenue.
II-Trade Alliance
The international trade alliance among different countries like the EU, NAFTA, ASEAN, and others is to promote free trade among the member countries. The objective of free trade alliance member countries is to procure products and goods from the other member countries to take advantage of tax benefits. However, the trade alliance among countries is impacting the business operation of Dilmah Tea, because they don’t buy tea directly from the brand, but rather from the trade member countries.
III-Political Stability
A stable political environment plays a key role in smoothly performing team production, processing, and distribution operations. In case of roadblocks, political riots, procession, and other political upheaval would jeopardize the cultivation, production, and distribution of Dilmah Tea in various countries worldwide. An unstable political environment causes delays and disruption in the supply chain and the distribution network.
Economic Factors Affecting Dilmah Tea
Some of the main economic factors in the Dilmah Tea PESTLE analysis are as follows;
I-Economic Recession
The global economy has been going through an economic recession for the past few years. It has negatively impacted the sale of almost all types of businesses and companies including the sale of Dilmah Tea. When people have limited disposable income, they would spend it carefully, rather than lavishly.
II-Currency Exchange Rate
The currency exchange rate market is highly fragile and it keeps fluctuating daily due to various political and economic factors. Dilmah Tea is a Sri Lankan tea brand operating its business worldwide. A small change in currency exchange negatively impacts the company’s sales, logistics, and distribution costs, marketing expenses, and another operational costs. Collectively, it decreases the company’s sales, revenue, and profitability.
III-Inflation and Interest Rate
Inflation and interest rates are the two main economic indicators and they directly impact the sale of Dilmah Tea. For instance, the higher inflation rate of the country would increase retail prices and make the product unaffordable to many people. Higher interest rates would increase the saving and discourage spending. Dilmah Tea should keep in mind the inflation and interest rates of different countries while launching its business there.
Social Factors Impacting Dilmah Tea
Some of the main social factors in the Dilmah Tea PESTEL analysis are as follows;
I-Team Popular Drink
Tea is a very popular drink in India, China, Japan, Britain, Canada, and other countries. It presents a great opportunity for Dilmah Tea to learn the tastes and preferences of different countries and markets and offers them similar types of tea based on their needs and requirements. Precise targeting would help the tea brand to target various segments of the customer and amplify its market reach.
II-Refreshing Taste
The refreshing taste of tea requires and compels tea users to demand tea multiple times throughout the day. It contains a small quantity of caffeine which boosts their energy level and makes them fresh and energetic. However, it is still popular among various age groups of people.
Technological Factors Affecting Dilmah Tea
Some of the main technological factors in the Dilmah Tea PESTEL analysis are as follows;
I-Advanced Technology
The cultivation, harvesting, and production of tea is highly labor-intensive work. Dilmah Tea should employ the latest technological tools, equipment, and machinery to automate various production and cultivation processes. It allows the company to achieve efficiency, and reduce time, and waste of resources; it amplifies the company’s overall productivity.
II-Digital Platform
Dilmah Tea has established a very large market network and operates its tea business worldwide. The team brand should develop an e-commerce platform or a team-lover platform to connect with the company’s users. It allows the company to directly connect with the end consumers and become familiar with their views and feedback.
Legal Factors Impacting Dilmah Tea
Some of the main legal factors in the Dilmah Tea PESTEL analysis are as follows;
Regulatory Compliance
Dilmah Tea should comply with the legal and regulatory requirements of different countries. They consist of trade policies, tariff and tax rates, import and export policies, IPR and patents of the company’s team, and other legal requirements. Regulatory compliance would help the company to smoothly perform its various operations without delays and disruption.
Environmental Factors Affecting Dilmah Tea
Some of the main environmental factors in the Dilmah Tea PESTEL analysis are as follows;
Environmental Sustainability
Dilmah Tea has made a strong commitment to environmental sustainability. It comprises employing sustainable methods of production, renewable sources of energy, and responsible practices. Compliance with environmental sustainability initiatives would help the company to keep up with the growing customer market trends.
Conclusion: Dilmah Tea PESTLE Analysis |PESTEL Analysis of Dilmah Tea |External Environmental Analysis of Dilmah Tea | Strategic Analysis of Dilmah Tea
After an in-depth study of the Pestle analysis of Dilmah Tea; we have realized that Dilmah Tea is the world’s leading tea and beverage manufacturing brand. If you are learning about the Dilmah Tea PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
