Pestlied on Lays

PESTLIED ANALYSIS

WORKER BEES 106

[pic 1]

[pic 2][pic 3]

Content

Background of the problem        3

Problem analysis        4

Problem statement        4

Scope        5

Place        5

Limitations        5

Theoretical scope        6

Research questions        7

Research question        7

Sub questions        7

Research objectives        7

Methodology        8

Political factors        9

The stability of the political system        9

Taxation policy/ fiscal policy        9

Currency        10

Economic factors        11

Social(-cultural) factors        14

The lifestyle patterns in Switzerland and France        14

Social-Cultural analysis (Hofstede and Hall theories)        14

Switzerland        14

Internal stakeholders        14

External stakeholders        14

France        15

Internal stakeholders        15

External stakeholders        15

Conclusion        16

Technological factors        17

Legal factors        18

International factors        19

Trade associations        19

Trade tariffs        19

Exchange rate developments        19

        20

Conclusion        20

Environmental and ecological factors        21

Demographic factors        22

Argument map        23

Conclusion        24

Bibliography        25

Sources of research        26

Background of the problem

Frito Co was founded in 1932 in the U.S by C.E Doolin. Herman Lay started up his potato chip company. In 1945, Lay and Doolin began a business relationship named Frito Co: Lay’s potato chips in the Southwest, and H.W Lay & Co Fritos corn chips in the Southeast. In 1961, they merged into Frito-Lay, Inc: Rold Gold acquired. In 1965, Frito-Lay , merged with Pepsi-Cola to form Pepsi-Co. Since then, the brand has been owned by PepsiCo. In 1979, Frito-Lay exceed $1 billion with their annual sales for the first time. Today, there are 55000 Frito-Lay associations across the U.S.

Lay’s, also known as Frito-Lay, has its markets worldwide and sells its products worldwide. Lay’s is well known because of its unique flavors and therefore it's much different flavors which differ from country to country. This is also a reason why Lay’s, or Frito-Lay, exists in all the 5 continents. Lay’s does a lot of research to define the proper flavor for the country where they want to introduce their new flavor.

As Lay’s wants to expand their product line, they have got the choice to place their new market in France or Switzerland. In order to make a well-thought decision and to provide as much information about Lay’s and their relationship with France or Switzerland, Lay’s first needs to take the PESTLIED into consideration. Enlargement to France or Switzerland needs to be promising to increase revenue with entering the new market. Firstly, France and Switzerland are high-economical countries in which the citizens have a high buying power. Switzerland is encircled by Europe’s major economies: Italy, France, Germany and Austria. Switzerland its infrastructure is very good. Secondly, Switzerland has free trade agreements, which makes transportation a lot more efficient. France is the eighth largest economy in the world and Lay’s a key role in the European market. With its developed transport and technology infrastructure, it is an excellent destination to expand our business in France.

To define the market in France we researched the selling behavior of the French citizens to know what flavors they prefer the most. French citizens are known for their sophistication from fashion to language to etiquettes. And the Lay’s chips flavors are no exception. In France and Switzerland, Lay’s is already established in the market for potato chips. A lot substitutes for Lay’s are in Switzerland and France, like Pringles, Ruffles, Tostitos and Popchips. The substitutes increase the competition between Lay’s and these other Chip Brands.

Problem analysis

Lay’s is working on expanding their business by increasing their market in either France or Switzerland. To make a proper decision in whether to enter a new market in France or in Switzerland, we use the PESTLIED analysis in order to do so. Lay’s is responsible for researching a solution for this situation. This certain problem occurred when Lay’s decides to enter a new market. Lay’s wants to launch new flavors and a new product which will reach a broader audience so they can increase their revenue. The choice of which country is the right one to expand the business, is crucial for the company’s future. Every aspect and exterior influence has to be taken into account, before a final decision is made. Choosing the wrong country can cause a loss of revenue,  people’s job would be endangered and all the work will not be rewarded. Lay’s is bringing new flavors to their existing product-line, which are the products potato chips. Lay’s is also introducing the ‘vegan chip’. Since Lay’s decides to expand their business by entering a new market in France or Switzerland, they face many difficulties. The problem occurs mainly at eight different points. Each of the PESTLIED letters, that also contains an aspect we are going to analyze, is a place where the problem occurs. These are the factors from which Lay’s is going to choose the country and solve the problem. Lay’s may have not enough information provided regarding the many possibilities in the two countries for Lay’s, or it may have not enough brand recognition with the new flavors there are added to the potato chips or with the vegan chips. As Lay’s wants to enter a new market in France or Switzerland, they will encounter some issues in changing their corporate identity. Therefore, Lay’s has to understand the new or changed wants and needs of their target group to preserving relationships with them.