Pestel for Whisky

2349 Words Dec 2nd, 2011 10 Pages
PART A: PESTEL analysis on the external business environment of Malaysia based whisky industry.
Political factors • According to International Trade and Industry Minister Datuk Mustapa Mohamed (2010), there will be no tariff reduction on the export of alcohol from Malaysia. This will become a threat to the whisky industry in Malaysia as the price of the whisky will remain high in global market and thus they will lose the competitive advantage on it. The demand of their products will drop as the selling price is high compared to others.

• Based on the Budget 2011, Prime Minister Datuk Seri Najib Tun Razak (2010) said that the government will not further increase the excise duty on the alcoholic beverages for the coming year. This will
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GDP is the amount of goods and services produced in a year. The increase of GDP indicates the economic growth in Malaysia. When the economy is in a good condition, the standard of living of Malaysians will also increase and they tend to spend and consume more on luxury goods. In this case, the consumption of whisky will become more as the spending of Malaysians on luxury goods is getting higher as the indication of the growth in the value of GDP.

Social factors • Based on the statistics by Department of Statistic and Economic Planning Unit, the population of Malaysia has increased from 26.75miliions in 2005 to 28.96 millions in 2010 and 63.6% of the total population falls in the age between 15 and 64. The increase in population size in Malaysia will bring a better opportunity to whisky industry as the demand of the industry towards labour force can be fulfilled that will cause a higher development and expansion of the industry. The supply of industry will also increase with the workers available in the market of Malaysia. While more than half of population of Malaysia achieves the drinking age limit (above 18) and this will increase the potential consumers and demand for whisky in future.

• Dr. Jim Swan, an independent consultant to the worldwide drinks industry (2005) said that drinking whisky

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