Packaging is the method of art and science of protecting and enclosing products and goods for use, sale, storage, and distribution. Packaging outlines the method of designing, producing, and evaluating packages. However, the objective of packaging is to preserve, protect, inform, transport, and sell products and goods. Today, we’ll discuss the PESTLE analysis of Packaging Industry; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Packaging Industry
Some of the main political factors in the Packaging Industry PESTLE analysis are as follows;
I-Government Regulations
The consumer protection government regulations and policies are very strict and tight for the packaging companies. They comprise printed ingredient disclosure, labeling and packaging laws, protection of the enclosed material, licensing, packaging material requirements, and others. However, the objective of strict government regulations is to ensure the protection and preservation of enclosed material inside packaging.
II-Trade Policies
Businesses and companies procure packaging materials from various countries all over the world. The government trade policies of different countries are variable due to their different diplomatic relations and foreign policy. For instance, if the supplier country doesn’t have good trade and political relations with the procuring country; they would impose high tariffs to reduce the trade with the country.
III-Political Stability
The stable political environment plays a crucial role in the growth of Packaging companies. For instance, if the supplier country is going through a political crisis, roadblocks, and violent processions; then it causes delays in the delivery of packaging material to the production and manufacturing companies for further use.
Economic Factors Affecting Packaging Industry
Some of the main economic factors in the Packaging Industry PESTLE analysis are as follows;
I-Expensive Material
The cost of packaging material has increased a lot in recent years. It is due to the increasing labor wages, fuel prices, import and export taxes, legal and regulatory compliances, tariffs, and other regulatory requirements. Collectively, these all factors have increased the material cost of the Packaging companies, and it negatively impacts the retail sales and profitability.
II-Consumer Spending Trends
Consumer spending habits play a critical role in impacting the retail sales of businesses and companies. The consumer market has shown a great interest in packaged products because it implies that it is new and hasn’t been opened before; it ensures quality and transparency.
III-Economic Growth
The economic growth of the country directly impacts the retail sales of Packaging companies. When a country’s economy is growing and proliferating, people have multiple employment opportunities and they have stable income, and businesses are growing. Higher disposable income allows companies to spend on packaging and offer packaged products to customers.
Social Factors Impacting the Packaging Industry
Some of the main social factors in the Packaging Industry PESTEL analysis are as follows;
I-Sustainable Packaging
The consumer market has become highly cautious about the nature and environment. It is compelling businesses and companies to implement limited packaging to enclose the product or item. However, the minimalistic quantity of packaging would help them to keep up with the growing sustainability trends.
II-Recyclable Material
Speaking of environmental sustainability trends, Packaging companies are also employing recyclable material that is strong, durable, and sustainable to the environment. The biodegradable packaging material is a bit expensive, but it has the trait of self-decomposing and becoming part of nature again.
III-Community Development Programs
Packaging companies are investing a significant amount of capital resources in community development programs. It comprises creating employment opportunities, protecting and preserving nature with biodegradable packaging, and others.
Technological Factors Affecting Packaging Industry
Some of the main technological factors in the Packaging Industry PESTEL analysis are as follows;
I-Packaging Technology
Packaging companies are investing a significant amount of capital resources in advanced technology like AI, ML, 3D printing, and others. It allows them to design and develop efficient packaging material for various types of products and goods. Most importantly, it has allowed them to achieve efficiency by reducing costs.
II-Automation and Robotics
Packaging companies are also implementing automation and robotics technology in their production and manufacturing processes. It allows them to increase the production volume and the total number of produced items with a limited workforce. However, it helps them to reduce the overall production and manufacturing with limited wastage of resources.
Legal Factors Impacting Packaging Industry
Some of the main legal factors in the Packaging Industry PESTEL analysis are as follows;
Regulatory Compliance
Packaging companies should comply with the government regulations of various countries. It comprises labeling and packaging laws, consumer protection laws, product safety laws, packaging material, labor laws, and others. Regulatory compliance would help them to smoothly perform their production and manufacturing operations without any disruption and delays.
Environmental Factors Affecting Packaging Industry
Some of the main environmental factors in the Packaging Industry PESTEL analysis are as follows;
Sustainability Initiative
Packaging companies should make a strong commitment to the environmental sustainability initiative. It comprises investing in renewable sources of energy, biodegradable packaging, and ethical sources to reduce the carbon emission rate.
Conclusion: Packaging Industry PESTLE Analysis |PESTEL Analysis of Packaging Industry |External Environmental Analysis of Packaging Industry | Strategic Analysis of Packaging Industry
After an in-depth study of the pestle analysis of Packaging Industry; we have realized that Packaging is the world’s leading business venture. If you are learning about the Packaging Industry 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.
