Pest Analysis Essay

The radical and ongoing changes occurring in society create an uncertain environment and have an impact on the function of the whole organization. A number of checklists have been developed as ways of cataloging the vast number of possible issues that might affect an industry. A PEST analysis is one of them that is merely a framework that categorizes environmental influences as political, economic, social and technological forces. The analysis examines the impact of each of these factors (and their interplay with each other) on the business. The results can then be used to take advantage of opportunities and to make contingency plans for threats when preparing business and strategic plans. PEST also ensures that company’s performance is aligned positively with the powerful forces of change that are affecting business environment. PEST is useful when a company decides to enter its business operations into new markets and new countries. i) Political As the government tightens the regulations on fast food advertising, MDD awaits further instructions from Malaysia’s Information Ministry. If its leading product, instant noodles, is to be classified as a â€Å"fast food†, the brand may be faced with an advertising ban and forced to explore alternative promotional channels once the mass media options are closed to it. However, this move towards greater health consciousness and nutritional awareness has been a gradual trend. As one of Malaysia’s largest food producers, we constantly manage and improve our material emission and waste standards. Independent verifications have been performed to ascertain that our emission levels are in compliance with the Malaysian Environmental Quality Act (Clean Air as well as Sewage ; Industrial Effluents) regulations. ii) Economic The global economy in the year 2009 began stabilising in the second half after governments worldwide intervened with stimulus plans. Some economies picked up earlier, particularly those within the Asian region; proving themselves to be more resilient to the downturn than initially feared. Likewise in Malaysia, the economy showed signs of recovery toward the end of FY2009, with Gross Domestic Product (â€Å"GDP†) rising by 4. 6% in the fourth quarter compared to the same quarter of the previous year. FY2009 was another record year for the MDD Group – a feat considering the challenging economic conditions. According to the 2009 Bank Negara Malaysia Annual Report, the food, beverages and tobacco industry helped sustain the domestic consumer demand, especially food products. The industry ended the year on a positive note as output picked up by year-end. iii) Social Corporate Social Responsibility (CSR) MDD are constantly striving to reach out to the community, and this goes beyond tailoring company’s products to consumer taste or ensuring offerings reach the farthest corners of the globe. MDD too engage in community building and the fostering of moral values. MDD also committed to protecting the environment for the benefit of the younger generations. MDD manage the usage of recyclable materials, energy, water, emissions, effluent and waste to the approval of independent bodies and conform to the Malaysian Environmental Quality Regulations. MDD reached out to the underprivileged communities that they felt deserved their immediate attention, especially those who require dialysis care and children in need. MDD are committed to being a socially responsible company that endeavours to give back to the communities that the company operates in. MDD constantly strive to be able to improve the lives of the less fortunate, while ncouraging all employees to take a ‘hands on’ approach to company social responsibility initiatives. Caring, committed employees are the hallmark of a holistically successful organization and as a Malaysian entity, MDD are proud to be able to provide for the underprivileged in the society. Yayasan Mamee On Jan 1 2010, MDD have set up the Yayasan Mamee, and have pledged an initial RM2 million to need the foundation. Yayasan Mamee is the main benefactor to Yayasan Toh Puan Zurina, which is a foundation that cares for the needs of underprivileged dialysis patients. In 2009, MDD set up Yayasan with an initial contribution of RM800,000 which went towards the construction and upkeep of the centre, 10 dialysis machines as well as maintenance of trained medical staff. So far, MDD have extended free dialysis treatment and medicines to 5 End Stage Renal Disease (ESRD) patients, and hope to extend to reach more patients in need in 2010. Caring for Children In 2009, the staff and management of MDD organized a series of visits to orphanages during festive periods, including Hari Raya, Chinese New Year and Deepavali. Gifts of hampers or ‘ang pows’ are handed out to children, and staff are encouraged to spend time with the children to bring them a little festive joy. There are also plans in the pipeline to set up a Scholarship Fund to look into the educational needs of deserving students from primary and secondary schools all over Malaysia. . Reduce, Recycle, Reuse In 2009, MDD led the way into the ‘green’ future by recycling emission gases from company production plants into viable sources of energy that were converted back into power for plants. This reduction of waste also translates into a more efficient way of conserving energy, and will form the basis for company commitment to environmental conservation and responsible manufacturing. iv) Technology The Group remains committed to R&D endeavour to develop new wellness products that are nutritious to appeal to the target consumers. Its R&D department is manned by 13 full-time staff and plays a crucial role in product improvement and new product development to achieve the company’s export objectives. MDD factories have received prestigious industry certifications such as ISO 9002, ISO 9001 and HACCP, while the company’s flagship brands such as Mister Potato Crisps and Nutrigen Liteyo have been honoured with local accolades. In 2004, its subsidiary, Pacific Food Products Sdn Bhd was awarded a Brand Promotion Grant of RM2 million by MATRADE to promote the Mamee brand in the export market. Being a fast growing organization with far-flung operational centre, multiple product lines and distribution channels, MDD have upgraded its IT implementation systems, in order to shorten decision making time and ensure better and more accurate decisions. MDD put its trust in SAP and credit the SAP ERP solution to a great extent with helping to quadruple revenues from 2002 till now. According to Pang, MDD achieved greater transparency of its internal processes in its day-to-day operations. This was crucial as the company became increasingly geographically diverse and its organizational size grew. This system improved the organization of MDD’s database, particularly in the areas of cost analysis, customer service and reporting transparency. MDD also plan to further implement an ERP and MRP solution to even better link up with suppliers and distributors.