Semillero San Felipe

PESTEL Analysis
As the first step of the external analysis is important to determine the different factors that
influence the every day activities of the company, and beyond that, try to measure the
impact of each one of them.
To accomplish this process, is commonly used a tool called PESTEL Analysis, which
basically summaries the key factors regarding each important business’ scopes
represented by each letter: Political, Economic, Sociological, Technology, Legal and
Environmental.
Element Factor Business Impact
Uncertainty about the results of the next
elections. Notorious differences between tax
structure and economical politics of both
candidates.

Political instability that leads to social

conflicts and usually strikes and protests. Important impact on the
cost structure due to the
Trade conflict between China and USA that increasing tax pressure and
Political
increases the difficulties to export also reduction in margin
commodities to the Asian country. because of the decreasing
Increasing regulations for exports of prices of commodities.
derivatives of the agricultural industry to USA
and EU.

Increasing fiscal pressure for small and

medium size companies.

Volatility of international prices of soy, corn

and wheat with a clear decreasing tendency
due to the increase of the world production.

Exchange rate volatility influences an

Investments are difficult to
increase on consumables’ prices (most of
calculate and implement in
them are traded in USD) but also impacts
uncertain environment. The
positively on the fix structure in $.
impact of fixed costs are
Economic
reduced (since they are in
High interest rates reduce the viability of
dollars) but there’s more
several investment to improve quality and
uncertainty as variable
productivity, sometimes needed to stay in the
costs are in dollars.
market.

High inflation estimated 44% for the 2019

period.

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 Social unrest that leads to strikes and
different kinds of march, usually affecting This is an opportunity for the
transportation and logistics. business as trends move
towards less meat
Social trend against GMO’s, main kind of consumption and more
Sociological
seeds produced by the company. vegetables should the
company succeeds in
Social trend towards healthy alimentary finding the right products for
habits, may increase consumption of their needs
agricultural products.
Low investment in infrastructure from the
Government. New technologies can
provide an important
New technology innovations such as self- reduction in cost and an
driven machines were introduced in EU and improvement in quality but
Technological
USA. Also, data science and satellite images with high investment cost.
would revolutionize the industry. It will also take a lot of time
for these technologies to
Low transfer of knowledge from labs to arrive to Argentina.
producers.
Weak environmental policies but exist a
trend to develop restrictions on agrochemical
products. As the business is one step
ahead of the laws and
High switching to renewable energies, due to regulation, it may find itself
trends and to government policies. in the need to change its
Environmental
current production methods
No strong laws in favour of correct waste to adapt to new regulations.
management but huge social judgement if There’s a high cost related
any scandal occurs to this risk.

Strong workers unions.

Many provinces are devolving laws against

agrochemical products
Increase in regulations and
Uncertain legal framework laws could produce a higher
Legal administrative cost or even
Most transactions happen in the black pay fees should it need to
market (as most laws are outdated or do not adapt.
specify correctly, businesses choose to
ignore them). Even though there is an
attempt to change this, it has not been yet
implemented.

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5 Porter’s Forces.
The second step for the environmental analysis is the 5 forces study developed by Michael
Porter, that allows understanding the competitiveness of the business and identifying our
strategy’s potential profitability.
Forces Factors Influence
Seeds and chemical suppliers are big firms, most of them
international labs, that can change prices and conditions ---
as they please. (Concentrated oligopolies)

The knowhow transmission between seed suppliers --

(labs) and producers is limited.
Barging Power of
Suppliers As big firms, most of the suppliers define the financial
conditions and can charge big interest rates in case of --
(MEDIUM – HIGH) delayed payments.

Little and distributed suppliers for most of the agricultural +

services (logistics, harvesting, sowing, etc.)

Few and concentrated companies that can provide -

maintenance services for the facilities.
For seeds, there is a low cost of changing suppliers due --
to the importance of the black market.

The industry produces goods the first necessity, so there +

Barging Power of always be demand of them.
Buyers
For commodities, the buyers are concentrated (main --
(LOW – MEDIUM) exporters companies) and can set the conditions of
trading.

For seeds, the buyers are mostly small producers +

distributed in different parts of the area of influence.
Threat of Substitute
Products The continuous growing of the organic market and the -
trend towards the non-transgenic crops.
(LOW)
Exist several regulations in the seed reproduction
market, both from the labs and the government, that ++
represent an important barrier of entrances.
Threat of New
Entrances Market with low volume of sales, due to the
predominance of the cattle raising activity around the +
(LOW) area of influence.

Decreasing international prices of commodities may +

cause a reduction on the market volume.
In the seed reproduction business, there are no
competitors that are located in the same region. Most of
the competitors come from the province of Santa Fe and ++

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 Rivalry Among north of Buenos Aires, with low influence and higher
Existing Competitors costs. Inexistent influence over direct sales and low over
distribution centers.
(LOW)
Regarding the commodities production, the competence
is over prices, where buyers stablish the sales conditions
and the amount they are willing to buy. -

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