Competitive Strategy for Agriculture Industry: SWOT, PESTLE and Porter Five Forces Analysis

This paper outlines the SWOT analysis, pestle analysis and porter five forces analysis of agriculture industry. The industry uses these models to overcome the competitors worldwide.

Running head: Competitive strategy
Competitive strategy

Competitive strategy
Table of Contents
Introduction.................................................................................................................................................3
Agriculture industry....................................................................................................................................3
Pestle analysis.............................................................................................................................................4
Porter five forces analysis............................................................................................................................6
Conclusion...................................................................................................................................................7
References...................................................................................................................................................8
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Competitive strategy
Introduction
The main objective of this paper is to outline the SWOT analysis, pestle analysis and porter five
forces analysis of agriculture industry. The industry uses these models to overcome the
competitors worldwide. Furthermore detail of this task stated below.
Agriculture industry
One of the most significant industries is agriculture industry that helps to increase and enhance
the profitability of the country (Isman et al, 2011). Agriculture is cultivation and breeding of
plants and animals to render food, fiber, medicinal plants and other products to enhance and
sustain life (Uchegbu et al, 2011). SWOT analysis of agriculture industry has been detailed
below.
Strengths
 It provides food security at national level.
 Good Irrigation works
 The industry maintains a top ranking in export of agriculture products.
 Hardworking farmers.
 Unique and latest technologies are available for major crops. Furthermore, worldwide
network is available for agriculture industry.
 Farmers are adaptive and innovative.
 Sufficient and experienced workforce is available
Weaknesses
 Low efficiency and effectiveness
 Quantitative production, Low relative competiveness
 Quality and food safety issue
 Low percentage of deep processing
 Weak and poor quality control mechanism
 Absence of farmers training
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Competitive strategy
 Due to lack of involvements, various issues are faced by agriculture industry (Reij and
Waters-Bayer, 2014).
 Low private sector investment
 Fertilizers and water use efficiency is low
Opportunities
 Global integration can be possible
 New land policy and rural development
 Better condition for medium and enterprises development
 Strong commitment is done by the government for agriculture development
 Technological know-how is available for dissemination
 Proper and dynamic utilization of hilly areas
 Export potential is high and effective
 Crop diversification can be possible and unique
Threats
 Small scale production
 Degradation and limitation of natural resources
 Food insecurity at household level
 There is less enterprises investing in agriculture
 High and immense competition in the global market
 Water resources issues and climate change
 Environmental vulnerability
 Uncertainty in fair prices
 Land transformation
 Declining budgetary allocation
Pestle analysis
Pestle analysis plays a vital and empirical role in each and every industry to know and evaluate
the competitive strengths and weaknesses in the marketplace. Also, it is a structure used by the
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Competitive strategy
marketers to monitor and measure the macro environment factors that have direct affect on the
industry (Altieri, 2018). Pestle analysis has been stated below.
Political factors: These factors play a significant role in determining and evaluating the factors
that have direct impact on the long term profitability and revenue of agriculture industry. There
are various political factors existed in the market which includes political steadiness, risk of
military invasion, level of fraud, intellectual property protection, trade and legislations, wage
legislations, work week regulations and rules in agricultural industry, and mandatory employee
benefits. All these factors affect the growth and sustainability of the agriculture industry
therefore; the industry needs to focus on these factors to overcome the competitors in the market.
Economic factors: The economic factors include savings rate, interest rate, inflation rate,
foreign exchange rate and employment rate. These factors determine the choices and needs of the
consumers in the marketplace. The economic factors that agriculture industry must focus while
initiating PESTLE analysis are economic growth rate, inflation rate, stability of host country
currency, types of economic system in countries of operation and unemployment rate. These
factors have a direct impact on the profitability of the agriculture industry.
Social factors: Society culture and way of doing thing have a direct impact on the culture of
agriculture industry. Along with this, attitudes and shared beliefs of the population play a major
role in how marketers in agriculture industry will evaluate and understand the needs and
requirements of the customers. The social factors include customs, culture, beliefs, values,
religion, gender, age, and sex and class structure. In this way, success and growth of industry
depends on the attitudes and belief of the consumers. To overcome the competitors, the
agriculture industry looks after the social factors in the marketplace (Parisi, Vigani and
Rodríguez-Cerezo, 2015).
Technology factors: In today’s era, technology is fast distracting the various industries around
the world. The agriculture industry not only does technological analysis of the country but also
the speed at which technology and changes disrupt that industry. Agriculture industry uses new
and innovative technologies in today’s competitive world to beat the competitors globally. In this
way, technological factors can provide favorable benefits to the agriculture industry worldwide.
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Competitive strategy
Along with this, recent and latest technologies are developed by the industry to stay in the
competitive world (Carlsson, 2012).
Environmental factors: Different markets have different rules, regulations and standards which
can direct impact on the profitability and revenue of agriculture industry. Natural disaster and
mishaps also influences the progress of industry adversely. Before entering in new market, the
industry needs to analyze and evaluate the market conditions and risks factors to make a good
image in the minds of the customers across the world. Some of the environment factors include
weather, climate change, ecological products, recycling, endangered species and pollution that
should be considered by the industry while operating business activities and operations globally.
It will help to generate more revenue and returns worldwide (Knox et al, 2014).
Legal factors: Different countries follow different rules, regulations and norms and they have
their own legal framework. These legal frameworks protect the intellectual rights of every
industry. Agriculture industry should carefully evaluate and measure these frameworks before
entering in the foreign market. Some of the legal factors include the following:
 Discrimination law, copyright, patent and e-commerce
 Antitrust law in agriculture industry
 consumer protect act
 Employment law
 health and safety law
 Data protection
Porter five forces analysis
Porter five forces analysis is used by the agriculture industry to gain the competitive benefits in
the marketplace by analyzing and evaluating the tactics, procedures and strategies of the
competitors. The porter five forces analysis are discussed below.
Threats of new entry: New entrants and rivalries in agriculture brings innovation, and new
ways of doing things through reducing and eliminating the costs and providing the new value
propositions to the customers all over the world. The industry has to handle all these obstacles,
issues and build effective barriers to protect its competitive edge. By building economies of
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Competitive strategy
scales, the agriculture industry has been able to safeguard and handle the threats of new entrants
(Lee, Kim and Park, 2012).
Bargaining power of suppliers: The agriculture industry buys their raw material from suppliers.
In this way, the suppliers in dominant position that can reduce the profit margin of the industry.
The bargaining power of supplier is low in this industry. The industry controls on the bargaining
power of suppliers by developing the supply chain with multiple suppliers (Johnson, 2016).
Bargaining power of buyers: Buyer play a vital role in maximizing the profitability of the
industry. The bargaining power of buyer is high in this industry. The industry needs to building
and boosting a large base of consumers to attract more clients in the market.
Threats of substitute product and service: It is one of the significant forces of porter forces
analysis which could affect the profit margin of the firm. The threat of substitutes is high in
agriculture industry. The industry can tackle the threats of substitutes by maximizing the
switching cost for the consumers.
Rivalry among the existing competitors: There is immense and high competitors in this
industry which could affect the targets of the agriculture industry. The industry can beat the
competitors by producing sustainable and innovative products (Rothaermel, 2015).
Conclusion
Now it has been concluded that agriculture is one of effective and dynamic industries in the
world. Pestle analysis, SWOT analysis and porter five forces analysis are initiated by the
industry to gain competitive advantages.
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Competitive strategy
References
Altieri, M.A., 2018. Agroecology: the science of sustainable agriculture. CRC Press.
Carlsson, B. ed., 2012. Technological systems in the bio industries: An international study (Vol.
26). Springer Science & Business Media.
Isman, M.B., Miresmailli, S. and Machial, C., 2011. Commercial opportunities for pesticides
based on plant essential oils in agriculture, industry and consumer products. Phytochemistry
Reviews, 10(2), pp.197-204.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Knox, P., Agnew, J.A. and McCarthy, L., 2014. The geography of the world economy.
Routledge.
Lee, H., Kim, M.S. and Park, Y., 2012. An analytic network process approach to
operationalization of five forces model. Applied Mathematical Modelling, 36(4), pp.1783-1795.
Parisi, C., Vigani, M. and Rodríguez-Cerezo, E., 2015. Agricultural nanotechnologies: what are
the current possibilities?. Nano Today, 10(2), pp.124-127.
Reij, C. and Waters-Bayer, A. eds., 2014. Farmer innovation in Africa: a source of inspiration
for agricultural development. Routledge.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Uchegbu, M.C., Okoli, I.C., Esonu, B.O. and Iloeje, M.U., 2011. The Grovving Importance of
Neem (Azadirachta indica A. Juss) in Agriculture, Industry, Medicine and Environment: A
Review. Research Journal of Medicinal Plant, 5(3), pp.230-245.
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