Industry Environment Analysis Assignment Sample
| Identification of the industry in question | The sugar industry of Uganda | |
| Environmental analysis | Issues pertinent to the industry | Implications |
| Political factors | ● Government commitment regarding the transformation of the sugar industry with the national sugar policy framework (Uganda Trades, 2022)
● The Employment Act 2006
● Occupational Safety and Health Act 2006 (Uganda Laws, 2022) ● The National Environment Act 2019 (Nema, 2022) |
Potential players like Kakira sugar from the sugar industry of Uganda should be attentive to avoid by the national sugar policy as well as provided legislations as an integral part of empowering their infrastructure to ensure future growth. Moreover, the provision of fair employment opportunities along with occupational health and safety concerns can add a greater value to respective industrial players with operational flexibility and sustainability. |
| Economic factors | ● Governmental focus on the enhancement of economic growth
● GDP growth rate was 6.346% in 2021 (Statistics times, 2022) ● Unemployment rate of 2.44% ● Inflation rate was 2.16% during 2021, which is likely to stand at 5.01% by the end of this year (O’Neill, 2021) ● Existence of high-quality wealth and income inequality |
Potential sugar industrial companies might face a negative impact on their profitability due to rising inflation rate. However, stable growth of GDP along with government focus on economic growth can be supportive for industrial welfare. |
| Social factors | ● Current population of Uganda is 48,231,528 (Worldometers, 2022)
● Adequate concern for the environment and ethical practices ● Average work-life balance, and existence of socio-economic groupings |
The existence of environmental and ethical concern is highly encouraging factor for the sugar industry in terms of avoiding negative impact on the environment. Moreover, respective industrial players should look for improving work-life balance as well as targeting appropriate socio-economic groupings in the country. |
| Technology factors | ● Expansion of ICT infrastructure and integration through the national ICT policy (ICT, 2022)
● Empowerment of process automation software systems and video analytics for businesses operating in Uganda |
The inclusion of advanced ICT infrastructure can ensure future growth opportunities for the companies operating in the sugar industry of Uganda with advanced digitization. The company is should be attentive to ensure technology advancement in their operations as an integral part of ensuring process automation as well as analytical activities to evaluate the demand in the market. |
| Porter’s five forces | Strength | Justification |
| Competitive rivalry | High | The sugar industry of Uganda is notified to include a range of competitors such as Sugar Corporation of Uganda Limited, GM sugar Uganda Limited, Kiniyara sugar works Limited, Kakira sugar, and others. Among these, the Sugar Corporation of Uganda Limited is one of the leading manufacturers of quality sugar (Mehta group, 2022). The existence of these competitors is making intense rivalry in the market that has made the comparative rivalry in a higher stage. |
| Bargaining power of consumers | High | With the existence of intense market competition, potential buyers are noticed to have low switching costs in terms of availing sugar from other respective companies in the market. This factor has made the buyers’ purchasing power in a comparatively higher state. |
| Bargaining power of suppliers | Low | A range of different suppliers is associated with the Uganda sugar industry. The existence of different suppliers has been enhancing alternative options for potential industrial players. Moreover, low supplier switching cost has also been a significant concern due to which the suppliers’ bargaining power has been comparatively low in the Uganda sugar industry (Mugabira, 2017). |
| Threat of substitutes | Moderate | Adequate buyer propensity is notified in the Uganda sugar industry due to which the substitutes are also provided with adequate attention from the consumers’ perspective to some extent. This aspect has kept the threat of substitutes moderate in the Uganda sugar sector. |
| Threat of new entrants | Low | Potential new entrants trying to enter within the Uganda sugar industry should be attentive to ensure adequate capital requirements. Moreover, the analysis of absolute cost advantages along with the requirement of product differentiation, adequate access to the distribution channels and others might require sufficient time as well as financial support. Due to this reason, the thread of a new entrant has been low in this industry. |
| Stage in the industrial life cycle | Growth stage |
| Implications | Growth stage reflects the value of emerging of rings that are subsequently interrelated with the growth of demand within an industry. Similar consequences can be highlighted from the perspective of the Uganda sugar industry with subsequent growth in the recent past. The industry expected 11% growth in sugar output during 2019 (Forbes Africa, 2019). The production of sugar was standing at 450,000 metric tons during 2019 (Forbes Africa, 2019). With the growing demand of sugar across the market, the Uganda sugar industry is expected to experience distinctive future growth in the upcoming years with subsequent contribution from the leading and renowned industrial players. |
References
Forbes Africa, 2019. Uganda Sees 11% Growth In Sugar Output This Year [Online]. Available at: <https://www.forbesafrica.com/agriculture/2019/04/02/uganda-sees-11-growth-in-sugar-output-this-year/> [Accessed 25 March 2022]
ICT, 2022. National ICT Policy [Online]. Available at: <https://ict.go.ug/2018/11/23/national-ict-policy/#:~:text=Expand%20ICT%20infrastructure%20and%20its,governance%20and%20environment%20in%20Uganda> [Accessed 27 March 2022]
Mugabira, M.I., 2017. Value chain competitiveness analysis: entrepreneurial behavioural practices determining business success in Uganda’s commercial sugar and forestry industries.
Nema, 2022. THE NATIONAL ENVIRONMENT ACT, 2019 [Online]. Available at: <https://nema.go.ug/sites/all/themes/nema/docs/National%20Environment%20Act,%20No.%205%20of%202019.pdf> [Accessed 27 March 2022]
O’Neill, A., 2021. Uganda: Inflation rate from 1986 to 2026* [Online]. Available at: <https://www.statista.com/statistics/447810/inflation-rate-in-uganda/> [Accessed 27 March 2022]
Statistics times, 2022. GDP Growth of Uganda [Online]. Available at: <https://statisticstimes.com/economy/country/uganda-gdp-growth.php> [Accessed 27 March 2022]
Uganda Laws, 2022. OCCUPATIONAL SAFETY AND HEALTH ACT, 2006. [Online]. Available at: <https://www.ugandalaws.com/principal-legislation/occupational-safety-and-health-act-2006#:~:text=An%20Act%20to%20consolidate%2C%20harmonise,to%20provide%20for%20connected%20matters.> [Accessed 27 March 2022]
Uganda Trades, 2022. NATIONAL SUGAR POLICY [Online]. Available at: <https://ugandatrades.go.ug/media/National%20Sugar%20Policy-%202010.pdf> [Accessed 27 March 2022]
Worldometers, 2022. Uganda Population (LIVE) [Online]. Available at: <https://www.worldometers.info/world-population/uganda-population/> [Accessed 27 March 2022]
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