BSB108 Report: PEST Analysis of the Australian Agricultural Sector

This report presents a PEST analysis of the Australian agricultural sector, examining the political, economic, social, and technological factors influencing the industry. It highlights the significance of the sector to Australia's GDP and employment, emphasizing its reliance on international trade, particularly with China, Japan, and the USA. The analysis delves into the impact of political stability, corruption levels, government regulations, and legal frameworks on the sector's operations. Furthermore, it explores economic factors such as inflation, interest rates, and the influence of different economic systems (free market, command, mixed) on the sector. Social factors, including cultural diversity, demographics, and workforce skills, are also discussed, alongside the transformative impact of technology on innovation and efficiency within the Australian agricultural sector. This report provides a comprehensive overview of the external environment affecting the sector.

BSB108
Assessment 1: PEST Analysis
Please ensure you have read the instruction in the Assessment 1 folder
STUDENT NAME:
STUDENT NUMBER:
ABSTRACT (approximately 200 words):
Business Environment is the aspect of the business enterprise which affects or influences the
operations and helps in the determination of the effectiveness. It can also be said as the aggregate
of all the conditions, events and influence which surrounds the business and affects it. The
environment of the business consists of the aspects of the business surroundings which affects and
influences the business for its operations and determination of the effectiveness. The business
environment is an always changing factor which is considered to be uncertain because of the
dynamism of the environment. It is the sum total of the factors outside of the control of
management of the company which carries opportunities as well as the risks. In the following project
current business environment of the Australian agricultural sector has been discussed. Australian
agricultural sector is one of the most significant industry in Australia in the production of both
domestic and exported products. Pest analysis is to be done for analyse the factors such as Political,
economic, social and technology for the Australian agricultural sector. There are many factors in the
business environment but with the help of Pest analysis specifically the project will be able to
understand the affects of external environmental factors on the business.

Political
The political factors of Australia plays a very important in the determination of the
influences which can impact the Australian agricultural company limited. The long term profitability
of the company can be influenced by the political factors. This organization is operating in Food,
beverages & tabacoo in multiple countries along with the domestic business. Due to its involvement
in the international business this organization exposes itself into different types of political
environment (Herold and et.al., 2018). For the achievement of the success in different countries
the business has chosen to diversify its products. The dynamics of Food, beverage and tobacco
industry has different system risk in various countries. There are different aspects through which the
political factors of the company effects the business of Australian agricultural sector.
In different countries the political stability is different due to which the products of this
organization get different environmental importance. China among all the other countries is by far
the largest importer of the agricultural products of this sector. It imports a total of 21% of all the
agricultural exports.
Source : Granwal, 2021
The following illustration shows the different countries in which the products of this
organization is exported. Thus, political conflicts between any of these countries specially China,
Japan and USA can be very damaging for the business of this sector. The influence of different
products is very different in different countries. In some countries exports different goods in
different quantities which is based on the availability of the resources.
The agricultural sector of Australia is spread all over the country, more specifically is certain
places more than other. The business of this company is very dependent on the land as it is required
for the food cultivation and rearing and other activities which is useful for the production of the
business. Due to these reasons the company face a huge risk of the army invasion which can result in
the loss of business resources. The invasion of the army is not a natural phenomenon however it can
Illustration 1: Australian agricultural export market

Political
be said due to some political issues the business might have to face such conditions (Ivanovski,
Churchill and Smyth, 2018).
The level of corruption in Australia is not too much. However, corruption is a feature is not
highlighted or identifiable so easily. Thus, due to corruption there are possibilities of the business
getting effected. Apart from Australia this organization also operates in other countries as well. The
level of corruption in these countries is very high due to which it can effect the business export of
Australian agricultural sector.
The business operations of this sector is effected a lot by the interference of the
government. This happens because of the large scale of this organization which has the ability to
change the organizational needs. The government of Australia changes every four years, different
government has different policies which can be effect the business both positively and negatively.
The governments of other countries can also effect the business export of Australian agricultural
sector as they can change the export limits which can be very demoralizing for the company.
The political factors of the organization also have the ability of changing the legal framework
that can directly influence the business operations and activities. Changes in the legal framework
forces an organization to change their policies and procedures in respect to the lawful change. These
laws can be towards the intellectual property protection which forces the business to which is
copyrights and patents. The aim of this political feature is to prevent other company's to profit from
the creation of the Agricultural sector in Australia. Political factors also influence organization to
select their trading partners due to the influence of the government (Berg, 2021).

Economic
The business environment of the Australian agricultural sector is effected to the economic
factors. This generally effects the company's level of production and decision-making of the
business. The macro economic factors of the country effects the business and its operations. These
factors include the rate of inflation, savings, interest and foreign exchange for the determination of
the aggregate demand and investment in the economy. The micro economic factors also effect the
business as they are related to the competition this sector faces in the international market. The
biggest issue faced by this organization is that it has operations in multiple countries due to which it
is affected from the economic factors of different countries.
The influence of the growth rate, inflation rate and the industrial economic factors indicate
the spends made by the consumer on the products of the company. The economic factors are very
important for the forecasting the future trajectory of the sector and help the business to plan
decision for the upcoming uncertainties. Australian agricultural sector is said to be responsible for
completing the supply chain of the affiliated food and fibre industry. It is considered to be providing
jobs to the 1.6 million people in the Australian economy. Due to which it has the 3% of the total
gross domestic product of the Australian economy. With the help of the following illustration the
contribution to the total GDP from this organization is shown for the last decade.
Source : Granwal, 2021
The economic system which the country utilized influences the operations of this business as
some exporter of this company are free market, command and mixed. In the free market economy
the private sector is prioritized and have almost equal rights to the that of the public sector. In the
command economy the presence of the private sector is nil. Most of the companies are owned by
the government for the regulations of the operations. Mixed economy is the mixture of the two
economies.
The economic factors also include the interventions made by the government with the
utilization of the fiscal policy. The products of this company of Food, beverage and Tobacco are
generally the products which notices the most interventions from the government. Government
intervention in the market as a competitor can be very bad for the business of this organization as it
increase the competition of this organization. The efficiency of the financial market of this country is
Illustration 2: Contribution of Austrian Agricultural Sector in GDP of Australia over the last
decade

Economic
totally dependent upon the economy of the country. Thus, due to the changes in the economy the
financial market rates are increased (Lovric, 2020).
Economy of a country also effects the infrastructural quality, which is very important for the
logistics of the products of the company. Most raw materials for the company comes from the rural
locations of Australia due to which it is essential for the infrastructure to be good for the transport of
the materials (Dufty, Martin and Zhao, 2019).
The economical factor of the country effects the skill level of the people which is important
for the production. The workforce is a very important aspect of all the businesses that helps the
organization in the measurement of the success. Educational levels in the organization is also very
important in the determination of the labour cost that is to be incurred by the organization. The
economic factors are considered to be directly affecting the prices of the business products and also
affect the demand of certain products and services.

Social
The culture of the society is also a very effective factor which influences the way the things
are done in the environment affecting the business. Different countries have different society which
shares different beliefs and attitudes of the population. This plays a great role in the towards the
marketing of the Australian Agricultural sector. For the marketing of the organization it is important
for the organization to understand the customers of the society and analyse the customer
preferences. The social factors are also very important towards the effectiveness of the leadership of
the company.
The social factors also include the demographics of the location. The demographical location
of this company is Australia, which is 2nd largest country but has a low population. Due to this the
Australian Market do not require the resources which they produce (Honcharyk and Kovalchuk,
2020). This is why most of the production of the Australian Agricultural sector is exported into other
countries. It can be said that demographics of the Australia creates the labour cost very high for the
Australian Agricultural sector. The skills level of the workforce is also effected as the social factor of
the organization.
Source : Granwal, 2021
Other factors such as the class structure, hierarchy and power structure of the society is also
a social influence which changes the organization. The culture of the society can be different in
different places. These changes happen because differences in the behaviour of the individual.
Regional culture is considered as one of the most effective factor in shaping the culture of the
organization. In Australia there culture is very diverse meaning that this country has the most
ethically diverse society. Due to the wide variety of backgrounds living together in this country that it
can be used for explaining the Australian culture (Hamilton ,and et.al., 2020). The diversification
of the society has happened because of the increase in immigration.
Illustration 3: Australian agricultural zones

Social
In Australia the presence of the diversified culture is considered to be the better for the
performance of the business. The increase in the competition of between multicultural people
create in crease in productivity of the employees. Due to this there is more creativity and innovation
in the though process of the staff in noticed. Having a diverse culture also decreases the risk of
discrimination and harassment in the workplace. The Australian Agricultural sector has also started
to increase the employment of the Aboriginal and Torres Strait islander people. These people are the
locals of Australia which provide this organization effectiveness in reduction of the cost.
Culture of the organization is also shaped from the power of the gender. For the most of the
Australian culture there is fair share of equality amongst the gender. However, in the rural areas of
the country there are places were female are less dominant than male and this is generally it is
noticed in Aboriginals and other tribal residents. The culture of a place impacts the entrepreneurial
spirit of the depending upon the broader nature of the society.

Technology
The impact of the technology on the Australian Agricultural Sector has been very influence
as it has allowed the organization to improve innovation in the organization. It can be said as the
ways with the help of which the organization can influence organization changes. The changes in the
organization is considered to be very important for its growth and effectiveness in the productivity.
Over the last 5 years the has been seen to be very effective for the performance of the organization.
Technological factor is such a factor which helps the business to improve the overall performance of
the organization. The changes in the technological trends can also change the customers preferences
which can effect the demand of the products of the company. It can be said that with the help of
better technology Australian Agricultural sector is able to improve its productivity and also develop
new process of doing things.
With the help of better technology the company is able to improve its business operations
which include transportations, logistics and also packaging of the products of the organization. New
and enhanced technology has been developing in this business for many years now and is said to be
providing the organization different ways of improving its activities. Technology has helped the
organization to improve the communication between the organization while providing the users of
the technology new ways of helping each other. Technological factors are considered to be one of
the most effective ways of improving the competitive advantage for the operations. This is said to be
a very effective way with the help of which the business can gain advantages in its market. The
technological innovation are considered to be the key tool which provides the business with
techniques of attracting the clients which can provide sustainability of improvement to the
operations of the organization.
The technological factors is said to provide the organization new ways for improving the
product offerings. It can help the business to provide the ways of new operations and also improve
the research and development procedures for the business. It allows the organization to build new
products and services and also develop and invent new process and procedures of production.
Technology has also helped the business in the management of the cattle and cultivation of the
crops. It allows the business to reduce the cost of production of the different operational cost which
are incurred (Alvarez Campos and Evanylo, 2019).‐ With the help of the technological
improvement in the organization an impact of the value chain has been seen on the organization,
which can provide the organization improvement in the different structure of the organization.
Improvement in the technological department the business operations can be developed into a
more efficient process. It can be said technological factors most of the times effect the organization
beneficially.
Technological factors can be damaging for the organization because it can be utilized by the
competitors, for the development of their products and services. This can increase the competition
in the organization which can also result in increase in competition. Competition can help the
competitors advantages related to the production, purpose and also the processing activities.
Technological factors also play very important role in the training and development of the workforce
of the organization. With new technologies and their implementation to the training and develop
the organization and improve the skill set of the individuals which will provide effectiveness to the
skill set of the workforce of the organization.

Technology

References
Books and Journals
Alvarez Campos, O. and Evanylo, G.K., 2019. Biosolids improve urban soil properties and‐
vegetable production in urban agriculture. Urban Agriculture & Regional Food
Systems. 4(1). pp.1-11.
Berg, S.K., 2021. Evaluating the efficacy of plant growth promoting rhizobacteria in
Australian agriculture.
Dufty, N., Martin, P. and Zhao, S., 2019. Demand for farm workers: ABARES farm survey
results 2018.
Hamilton, E.M.,and et.al., 2020. Reconnaissance sampling and determination of hexavalent
chromium in potentially-contaminated agricultural soils in Copperbelt Province,
Zambia. Chemosphere. 247. p.125984.
Herold, N., and et.al., 2018. Australian climate extremes in the 21st century according to a
regional climate model ensemble: Implications for health and agriculture. Weather
and climate extremes. 20. pp.54-68.
Honcharyk, I. and Kovalchuk, S., 2020. Agricultural Production Greening Management in the
Eastern Partnershipcountries with the EU. Publishing House “Baltija Publishing”.
Ivanovski, K., Churchill, S.A. and Smyth, R., 2018. A club convergence analysis of per capita
energy consumption across Australian regions and sectors. Energy Economics. 76.
pp.519-531.
Lovric, K.A., 2020. A mixed-method study of stem qualified professionals’ persistence
intentions within the Australian agriculture sector (Doctoral dissertation, University
of Southern Queensland).
Saragih, L.R.,and et.al., 2018, November. The industrial IoT for nusantara. In 2018 IEEE
International Conference on Internet of Things and Intelligence System
(IOTAIS) (pp. 73-79). IEEE.
Online
Granwal, L., 2021. Agricultural industry in Australia statistics & facts.[Online]. Available through:
<https://www.statista.com/topics/5303/agriculture-industry-in-australia/>