"STO today has become the vibrant business entity, with a diversity of business demanded byrapidly developing country. As the national leader in business, the STO group has subsidiaries,joint ventures and associates in its entity.The establishment of STO People’s Choice Supermart in July 1991, the first of its kind in theMaldives, came with the target to provide cheaper means of shopping experience. ThoughSupermart is not the largest supermart in the Maldives, situated at the ground floor of STO TradeCenter, its interior layout and arrangements are designed in such a way that it offers customerwith a better shopping experience. Supermart offers high quality items ranging from frozen foods, canned food, toiletries andhousehold items including other consumer goods. It also has a wide collection of health foodssuch as low calorie, sugar free, low fat and herbal products, available in it store serving the needsof the health conscious customers. 2.2 Environmental Analysis – PESTLEIn this section an impact based analysis has been provided, as per the model of Lewie Diasz(2013). Which provides for a detailed perspective into the aspects of PESTEL environment basisthe opportunity or threat, and also highlighting the impact on the businesses. This model is most appropriate considering the fact that the organisation will have a clearconsideration on the factor, and effectively determine if an environmental impact is anopportunity or a threat. The ratings are between +5 and -5.2.2.1 Political FactorsOpportunity ImpactFactoror threatMost of the essential items have been duty waived. The government policy of O 5controlling prices for essential items through STO is significant.Each year the government takes the initiative to import essential items for the month O 3of Ramadan through STO and they are sold at competitive prices. Page | 6 2.2.2 Economic FactorsOpportunity ImpactFactoror threatInflation- reducing consumer spending power. Inflation shows rising pattern, which O 3could be expected in a country like Maldives due to the heavy dependency on imports.Current inflation rates are at 0.5% (Trading Economics, 2016)Exchange rate – even though the exchange rate is controlled and the ceiling set by the T -2monetary authority, exchange rate management is a major challengeNo price control on essential items, the prices of food have risen by 25% from 2009 to T -12011, and housing, water & electricity prices have risen by 10% from 2009 to 2011,and the main CPI index of home appliances has risen from 16% from 2009 to 2011.th Effective from 11 April 2011, the Maldivian currency was devalued by 20 percent or T -2from 12.85MVR to 15.42MVR in comparision with 1 United States Dollar (USD).This may influence the access to foreign currency and the cost of finance increaseddramatically on foreign currency imports (Maldives Monetary Authority, 2015)2.2.3 Social/Cultural factorsOpportunity ImpactFactoror threatExpenditure on housing has been increasing gradually which has affected daily O 1consumer goods sales.Changes in lifestyle of people , influences of social preferences and the spending O 4power of Maldivians have led them to become much more conscious of purchasinghigh quality products (Maldives Monetary Authority, 2015)2.2.4 Technological FactorsOpportunity ImpactFactoror threatThough there is considerable technological advancement, improvements in areas such O 2Page | 7 as inventory and category management are required.Introduction to online shopping is an emerging trend in the Maldives, which would aid O 3in increasing sales and attracting more customers.2.2.5 Environmental FactorsOpportunity ImpactFactoror threatThe environment policy of STO promotes eco-friendly technology, which counters the O 1concerns of environmental friendly products and requirements for the brands to beenvironmentally friendly.Resources are used efficiently to minimize wastage while promoting cleanliness, O 1which abides by sustainability expectations in the community.2.2.6 Legal FactorsOpportunity ImpactFactoror threatSupermart’s performance has a direct influence by various policies by the government O 1Governance principles set out in the CMDA CG code is followed by STR, however O 4regulatory environment is positive for the organisation (ReportLinker, 2016)2.3 Industry Competitor Analysis1.1.1 Industry Analysis (Porter’s Five Forces)Threat of New Entrants – Low? Setting up a business on a large scale.? Enjoying the many benefits enjoyed by the big players will be intimidating task forany new entrant.Page | 8 ? However, establishing a business on a smaller scale and targeting on niche market iseasier.Bargaining Power of Buyers – High? Multiple options for buyers.? Information flow.? Shoppers are individuals or a household.Threat of Substitutes – Moderate ? A small business or competitor of STO Supermart could market a product thatbecomes a close substitute to STO’s products. ? Given this possibility, it is reasonable to expect a moderate threat of direct substitutes.Bargaining Power of Suppliers – High? Possibility of buying directly from a local manufacturer is low.? Foreign Procuring (Dependency on foreign sellers to purchase the many products) ishigh.? Foreign traders consider the Maldivian market as a tiny market relative to their largevolume traders.? Commanding favorable terms in purchases.? Bargaining power of suppliers is often very high.Competitive Rivalry- Overall Low? The supermarket industry of the Maldives has the characteristics of an oligopolisticmarket.? Small number of large players dominates the market followed by the smaller playersconcentrating on niche markets.? The main players such as, Agora, Red Wave has their own shipping line.Page | 9 ? Based on product differentiation and the non-existence of price competition, it couldbe said that the industry rivalry currently is low.? STO and many other competitors have to switch their focus to the resort F&B market.1.1.2 Competitor Analysis Agora Red Wave Fantasy VB BrothersHigh. Strong High. Known for Medium. LittleBrand Recognition Highmarketing its quality products advertisingBudget focus,smart shoppers, Gourmet focus, smart shoppers,Market Focus smart shoppers,variety seekers Resort market Fast and furiousvariety seekersLargest Main outlet Quality brands Have many yearssupermarket in located in the available. Friendly of experience inthe capital city heart of the city and attractive the supermartStrengths with 4 sub atmosphere. business.outlets situatedacross. CheapestproductsNumber of outlets 3 5 1 2Huge varieties of Huge varieties of Niche brands of Less varieties offood items, food items, food items and food items,Groceries, Groceries, groceries Groceries &Products availablehousehold household items household itemsitems& home & homeappliances appliancesPrice Average price Cheapest price High price Average priceFreebies and Seasonal Frequently Nil SeasonalPage | 10 "