Macro Environment Analysis for Parknshp

External Environment Analysis for ParknShop

Name: SUN Zhiyang

Student ID: 13412205

First for the demographic point of view, population has been steadily growing in recent years in Hong Kong to over seven million in the middle of 2013, and so does the number of domestic households in Hong Kong exceeding 2.4 million in the third quarter of 2013. As a grocery supermarket, these two figures are very important and in this case for Parknshop because they indicate the huge already and still growing market in Hong Kong.

The economic environment is a major factor in the strategies of discounts retailers. Hong Kong GDP has been growing steadily since 2009, reaching 263 billion in 2013. This is an optimistic figure for Parknshop because it simply means that people in Hong Kong are getting richer and thus are more capable of buying things including grocery. At the same time, however, rental costs reached new heights in 2012, affecting the operational costs of retailers in Hong Kong. This may throw a threat to Parknshop because location and space are vital winning point for mega chain supermarkets like Parknshop.

In terms of the political and legal environment, Hong Kong is a free market with almost zero import tariffs (with four category exceptions, including an 80% tariff on wine). With this policy, import regulations and standards, food labeling, organic certification and tariffs are relatively lenient in Hong Kong. Hong Kong is a net food importer, and a market opportunity for high value food and beverages. So again, Parknshop as a mega grocery supermarket can enjoy a lower cost when import food and beverage from abroad.

As for the social cultural perspective of the macro environment, there is a prominently increasing health as well as safety consciousness in Hong Kong. And people here are well known for their busy lifestyle. Both of these factors drive some significant emerging food consumption trends include organic food; functional food; chilled and frozen meat...