ECOLAB Situational Analysis Report: Marketing Management 1 - ZV

This report provides a comprehensive situational analysis of ECOLAB, a leading provider of cleaning, food safety, and health protection products and services. It includes an external analysis using the PESTLE framework, examining political, economic, social, technological, environmental, and legal factors affecting ECOLAB's operations in Australia and New Zealand. The report also analyzes ECOLAB's near environment, identifying key competitors such as ISS A/S, Diversey Inc., and Henkel, and outlines the company's key consumer base and market position. The analysis reveals that ECOLAB operates in a highly competitive business environment and needs to focus on customer satisfaction to enhance sales and profitability. The company maintains a strong market position through eco-friendly products, sustainable growth strategies, and a commitment to environmental safety.

Running head: MARKETING
Marketing
Name of the Student
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Author note

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Introduction
The report throws light on performing situational analysis of the ECOLAB organization
as to analyze the different factors which are affecting the growth of the company in competitive
business environment. Situational Analysis refers to collection of different techniques which can
be used by managers as to analyze the internal and external environmental factors of
organization. ECOLAB is the leading provider of the food safety, cleaning along with health
protection services and products for hospitality with $5 billion sales in the global market.
Answer to Question 1
External Situation Analysis of ECOLAB (PESTEL)
Political Factors helps in analyzing factors that can impact the marketing and operational
activities of Ecolab. Ecolab Inc is operating in cleaning products in more than 12 countries, and
there are various political risks and uncertainties (Baker and Saren 2016). In the Australian
market, the political economy is stable, and level of corruption is less which provides various
opportunities in managing the overall business efficiency (Bliss 2019). In New Zealand, the
labor laws are strict and the labor force is expensive in the government wherein the companies
have to pay more taxes and it reduces the overall profitability of the organization (The
Conversation 2019).
Economic Factors play a vital role in managing the different operations of ECOLAB in
different countries as the macro-environmental factors can determine the aggregate demand and
investment in the economy. In both the Australian and New Zealand economy, the skill level of
the workforce is sufficient, and this plays a significant role in managing the different operations

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successfully (Newzealandnow.govt.nz 2019). In the Australian economy, the rate of inflation is
healthy, and it is the broad service sector which will be beneficial for the overall growth of the
cleaning services of ECOLAB (Boeing.com.au. 2019). On the other hand, in NZ, the rate of
unemployment has been considerably low which shows positive sign for the economy along with
the company to generate profitability (Stats.govt.nz. 2019).
Social Factors plays a significant role as the culture of society and way of performing
things can impact the culture of the organization. As the government of NZ changes in every
three years, there will be strong political system for the country (Newzealandnow.govt.nz. 2019).
The rate of literacy is high which is the right sign for the growth of ECOLAB in the market
effectively. Furthermore, in the Australian economy, ECOLAB needs to struggle as the
employment rate if comparatively low which can affect the overall effectiveness.
Technological Factors plays a significant role as there are different competitors of
ECOLAB in both Australia and NZ economy which can disrupt their innovations negatively. The
cost structures of the countries are stable and these impacts on value chain structure and the rate
of diffusion in technology. However, in Australia, there are about 55% of the costs of R&D
which is being funded by government of Australia which affects the marketing of ECOLAB
(Missionaustralia.com.au. 2019). On the other hand, there is a considerable investment made by
the government of NZ on R&D which positively impacts the cleaning services companies
positively as there is no problem for the company to receive funding for introducing different
activities.
Environmental Factors play a vital role as the different markets have various norms of
environmental standards which impact overall profitability of organization in such markets. In

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the Australian economy, the weather condition is stable for ECOLAB, and there are different
environmental laws and regulations which are required to be followed by the companies. On the
other hand, in other markets, there is no such scope for marketing the different activities towards
support for renewable energy which can cause a negative impact on the same (Austrade.gov.au.
2019). In Australia, the weather condition is stable as there is usage of different hybrid cars
which play a major role in make the aspects environmentally friendly.
Legal Factors play a significant role as in different countries; there are various rules and
regulations which are robust enough, and this can impact the intellectual rights of the
organization. In the case of ECOLAB, in Australian and NZ economy, the territory and state
government legislations help in protecting the consumers along with community which will
promote fair trading and competition. Furthermore, NZ is free trade economy which will be
beneficial for the growth of ECOLAB (Slade et al. 2015).
Answer to Question 2
Near Environment of ECOLAB
ECOLAB is one of the world’s largest providers of cleaning, food safety along with
health protection products and services for hospitality and industrial markets (Bugshan 2015).
The near environment otherwise known as microenvironment comprises of the different
governing bodies and businesses which will be affecting the functioning of the ECOLAB in the
competitive market. ECOLAB prepares the various products and services for the multiple
customers. The micros near environments of ECOLAB are as follows:
 Competitors (Miles et al. 2015)
 Customers

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 Producers of the substitute and complementary goods
 Suppliers and Subcontractors
On the other hand, the macro near environment of ECOLAB includes the following:
 The threat from the substitutes
 The threat from new entrants
 Bargaining power of suppliers
 Bargaining power of buyers
 Competitive Rivalry
Marketing Insights
From the analysis of macro and micro near environment, this can be analyzed that
ECOLAB competes in a very competitive business environment which can be a threat for them.
Furthermore, the company needs to focus on satisfying the needs of the customers which will
increase their sales and profitability in the market. Henkel is one of the major competitors of
ECOLAB which are specialized in providing different kinds of hotels and other aluminium-
related industries which mainly affects the overall efficiency of ECOLAB in the competitive
business environment.
Closest Competitors
ECOLAB have different competitors in the market which can be a threat for them in the
competitive business environment. The closest competitors of ECOLAB are as follows:
 ISS A/S – https://www.us.issworld.com/- This is the first competitor as the company
provides the full range of services to the customers which include security along with
providing hygiene products to the customers. The company have their presence in over

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50 countries along with 530k employees who are being directly employed. The company
have different provisions through outsourcing trends and the costs stay low which have
provided them potential advantage.
 Diversey Inc. – https://www.diversey.com/- This is the second competitor which mainly
focuses on hygiene and cleaning related products. The company is the direct competitor
based upon financialization of buyout by sealed air (Hakansson 2015). In the respective
organization, the company have their presence in many countries in which there were
more than 53000 employees working.
 Henkel – https://www.henkel.com/- This is the other competitor which have their
worldwide presence with top hygiene brands such as Purex, and they try to provide the
hygiene and beauty care products in the market wherein they were ranked among top ten
companies amongst the competitors. The number of employees is 8600 and the revenue
earned by the company is $2.6 billion till 2017.
Key Consumer Base
The customer base of ECOLAB includes the following customers:
 Customers in the Chemical Manufacturing Industry- 26%
 Customers in Aluminum and Food Industry-42%
 Customers in Construction Raw Materials Industry-12%
 Customers in the Wholesale Industry-18%

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26%
42%
12%
18%
Consumer Data
· Customers in the Chemical Manufacturing Industry
· Customers in Aluminum and Food Industry
· Customers in Construction Raw Materials Industry
· Customers in the Wholesale Industry
Figure 1: Consumer Data
(Source: Created by author)
Market Position of Organization
The ECOLAB organisation is mainly focusing on eco-friendly products along with
cleaning chemicals which will be beneficial for the improvement of living conditions. The
market position is strong in the entire competitive market as the business is looking to achieve
sustainable growth and efficiency in different operations along with providing cleanliness along
with the safety of the environment. ECOLAB has more than 45.63% of the shares in the market
in comparison to the other competitors such as Henkel for delivering innovative services for
providing clean and safe utilities (RapidClean 2019). The company is the global leader in
hygiene, water along with energy technologies along with services.
On the behalf of the different customers, they prefer the different services of ECOLAB in
comparison to the other competitors which can be effective in managing the activities. Through
partnerships with customers, the company has been able to tackle the different challenges

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accurately. The customers have huge faith on providing healthy environment as demanded by
them which will be effective for their future avenues.

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