Aramark SWOT and PESTLE Analysis

Strength

1. Environmentally sustainable processes: Aramark has a strong base of reliable suppliers of raw material which enables the company to overcome any bottlenecks in the supply chain. Along with that, Aramark makes sure that the suppliers for its businesses minimize their environmental impact. “Green thread” – their sustainability initiative approaches to weave environmental sustainability in all facets of their business. In the food service business, suppliers source produce responsibly, minimize waste, optimize transportation and efficiency. They source locally grown and responsibly sourced produce and follow the reduce – reuse - recycle mantra of waste minimization. Their operations are efficiently designed to save water and energy thus reducing their environmental impact and their transportation fleets reduce fuel usage and emissions. Their animal welfare policy instituted in 2015 requires suppliers to provide animals with an environment consistent with the “five freedoms” of animal welfare as developed by FAWC (Farm Animals Welfare Committee).

2. Well established distribution channels: Aramark has a distribution agreement with Sysco, another food service provider. Sysco is the global leader in the marketing and sale, and distribution of food products. Its client base includes hospitals, restaurants, educational facilities, hotels, to name a few. Sysco also sells restaurant equipment and supplies. The company currently operates 193 distribution facilities that serve over 425,000 customers worldwide. Under the distribution agreement, Sysco is responsible for distributing Aramark’s food and related services within the United States of America. This agreement of two service giants gives rise to powerful distribution channels. Further acquisition of companies such as FilterFresh, an office coffee service, from Green Mountain Coffee Roasters and Masterplan, a clinical technology management and medical equipment maintenance company strengthens their capability to reach potential customers. The remaining section of “Strength” is available only in the 'Complete Report' on purchase.

Weakness

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Opportunity

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Threat

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Political

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Economic

1. Exchange rate fluctuations for host countries: The geographical spread of the company’s operations requires for it to work with various currencies including Argentine peso, Euro, Canadian Dollar, GBP, Czech koruna. In 2018, Argentine peso witnessed a weakening by over 100% against the US Dollar, indicating a severe decline in the value of the currency. Similarly, exchange rate fluctuations for different countries are a daily occurrence. With trade relations being tense between the US and China owing to the recent trade war situation between the superpowers, the exchange rates can be expected to be unstable for quite some time in the near future. In June 2019, US president Donal Trump has threatened to impose fresh tariffs on Mexican imports. Aramark has stakes in all these countries and needs to take such situations into consideration to monitor the exchange rate fluctuations which may impact their business.

Social

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Technological

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Legal

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Environmental

1. Use of Renewable Energy: Different markets have different norms or environmental standards which can affect the profitability of an organization in those markets. In recent times many countries encourage the use of renewable energy to reduce the dependency on fossil fuel. There are even tax breaks in place given to companies that follow sustainable environmental practices. Aramark being a company that focuses on reduction in fuel usage and emissions in their operations can make use of such norms to increase their profitability. Therefore expansion into emerging markets that provide such benefits will in turn help the company flourish.

2. Waste management in Service Sectors: Aramark has, across all its operations, systems in place to reduce the impact and cost of waste. As a global food service company, they have been recognized by the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Agriculture (USDA) as a Food Loss and Waste 2030 Champion For their commitment towards reducing food loss and waste in their overall operations by 50%. The excellent waste management policies followed by Aramark make it suitable for a profitable stint in a country that has strict waste management regulations.