Pestel Analysis: Pest Analysis Of Sri Lanka

ENVIRONMENTAL ANALYSIS
PESTEL Analysis

Analysis of Political Factors
Cinnamon is one of Sri Lanka’s main exports. In the year 2015, Sri Lanka has exported approximately 467 Million U.S dollars’ worth of Cinnamon. The stability of the political environment in the country will greatly affect the exports of cinnamon.
Political stability will encourage new investors and international buyers giving them a positive image of the Political situation in Sri Lanka.
Establishing good political relations with other countries will ensure the identification of prospective markets. Currently there are sound relationships with a number of countries with regard to the export of Cinnamon, however no proper mechanism is in place specifically
This will directly affect the GDP of Sri Lanka.
Both the Domestic buying power of customers as well as the international buying power will affect the GDP.
Dealing with a lot of International markets, the currency fluctuations will have an impact on the export income. Factors such as taxes should also be considered.
The Cost of production will also affect the final cost of the product.
Another factor to consider with regard to the impact of cinnamon production in the international market is the price elasticity of the product.
The limited involvement of the Private sector due to internal policies, institutions such as banks and other financial institutes.
Cinnamon is commonly a home grown spice. This promotes the participation of women in the cultivation of cinnamon and home employment. This will improve the total economy of the country.
Direct peelers and planters promote the bulk purchase of cinnamon for a higher profit margin to retailers.
Recession and other factors that affect the Global economy will affect the industry supply as
This may be due to lack of awareness or the reluctance to substitute cinnamon for various other commonly used substances.
Analysis of Technological Factors
The Cinnamon Industry has failed to adapt the available technology and improve the production efficiency. This has resulted in the failure to reach the expected outcome.
Sri Lanka has failed to set up relevant Research and Development facilities to improve the production of Cinnamon.
Other global cinnamon producers have adapted the various technologies to improve the speed and quality of the production of cinnamon. This has resulted in them been able to cater to the Global demand for Cinnamon and gain a competitive edge over Sri Lanka.
Sri Lanka has failed to use these global standards as a benchmark and to pair the research finding in the global market to improve the production in Sri Lanka.
New Innovations that have been identified should be used to increase productivity. The fining should be practical and positive.
The application of the findings and support in technological aspects found by bodies like the Department of Export Agriculture (DEA), Sri Lanka Standards Institution (SLSI) and Cinnamon Research