DESTEP analysis

A common approach for examining the general business environment is doing a DESTEP analysis. To be able to manage the future opportunities and threats the demographical, economic, social, technological, ecological and political factors will be analyzed. In the following we will execute a DESTEP Analysis on the food sector of the Chinese market.

Demography
Urbanization has been of great influence on the consumption of nuts.
According to Yang and Gale (2015) per capita purchases of nuts by urban residents are 2.5 times higher compared to the rural residents.
The urban population in China has been increasing annually and is now 52 percent of the whole population. It is expected that urbanization will continue to rise due to the fact that authorities are reducing the barriers to rural-urban migration. By 2030, the UN expects the partitioning of rural and urban population to be 38% and 62%. It is also expected that the contribution of urbanization allows the GDP to grow from 75% to 95% in 2025. (Hefele and Bade 2011) Expansion of convenience stores, highway rest areas, and airport shops and the growth of e-commerce increase the number of marketing channels for nuts.
Chinese rural and urban population between 1985 and 2011 (Source: The National Bureau of Statistics of PRC)
Chinese rural and urban population between 1985 and 2011 (Source: The National Bureau of Statistics of PRC)

Economy
The growth of China’s emerging middle class has brought a sweeping economic change. Even though the GDP growth was ‘only’ 6.9% China’s consumption of tree nuts is growing as living standards rise. In 2015, the Chinese inflation dropped to 0.8%, the lowest level for more than five years. Because the inflation growth is much less than the GDP growth the consumers purchasing power will grow substantially. However China’s food prices rose 1.8 percent in