The PEST Analysis of UK’s Food Producing Industry

1. Introduction

This report focuses on PEST analysis of UK’s food producing industry and giving some particularly essential ratios of some food producing companies. With the diversification of economic and geography environment, food producing companies, especially multinationals need to consider more about what situation they will be in and what barriers they will meet. The main work of this report is to identify what will influence the businesses, profits, and strategies of food producing industry throughout deeply analyzing these important board macro-environmental factors.

2. PEST Model
PEST is a model that being used to analyze the board macro-environmental of a company
That endless circle might damage or break many companies’ cash-flow chain and might cause a range of troubles. Besides, less exports of products would also influence the international development of companies. 2. Cost of labour
Cost of labour is directly related with cost of producing. Though the unemployment situation was becoming more gravely in Europe these years, still it will economize dramatic amount of capital to use labour in developing countries, such as China and India. It is really a dilemma to many companies, special for multinational companies. 3. Currency rate risk
Michael, H.M., Arthur, I, S., and David, K, E.(2011) have pointed out that Most world money centers have established foreign currency futures markets. A stabile currency rate is the guarantee of each transaction, however, after the financial crisis, most of the world’s currency showed their instabilities. The institution of exchange rate gave a broken line of British Pound to Euro exchange rate history in appendix, which showed great diversification of currency rate(ExchangeRates, 2012). Companies will take invisible loss due to each transaction of using foreign currency because of currency rate of instability. On the other aspect, depreciation of domestic currency will also bring lots of pressures to food producing industry, they must balance the currency rate risk and pay more attentions to foreign currency