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External Environment Analysis: Tilray Incorporation

Company Overview

Tilray Incorporation is a prominent firm that is associated with pharmaceutical products. The focal point of the company is the production and distribution of cannabis products. The entity was founded in 2013 under Privateer Holdings, which was the umbrella organization then (Reuters, 2019). Tilray is one of the pioneers in the industry that is associated with marijuana production and distribution. The primary headquarters of the company are based in Nainamo, Vancouver, Canada. It also has locations in New Zealand, US, Australia, Portugal, and Chile among other nations (Tilray, Inc., 2018).

Tilray inc. has been able to achieve different accolades from the status that it has established in the Canadian community and beyond. The purpose of the company is to provide medical cannabis that is safe and very reliable for consumption. Tilray cultivates and produces cannabis products that are essential for individuals with certain health conditions. The initiative is majorly supported by the developments in the lawful use of marijuana. In recent times there has been an uptick in decriminalization and legalization of the utilization of medical marijuana (Reuters, 2019).

Numerous researches have displayed the substantial benefits of cannabis in varied medical conditions. The product has evidently shown that it helps improve some of the effects of medical conditions that have impacted many lives across the globe. These changes have provided Tilray Inc. with the platform for its services. The potential of the market niche under cannabis products gave the founder of Tilray, Brendan Kennedy, the idea about getting into the business. Thus far, the move has proved to be lucrative as the organization has been able to accrue revenue worth $20 million as recently as the fiscal year 2017 (Tilray, Inc., 2018). The company has close to 1000 employees and has a management team that is skilled and proficient in directing the progress of Tilray Inc. The management group has expertise which ranges from scientists’, engineers, and advocates to agriculturalists (Reuters, 2019).

Industry Identification

The pharmaceutical industry is one of the most lucrative sectors in the current world. Generally, the industry encompasses the development, production, and distribution of medications. The significance of the industry is comprehensible from this elaboration. The global revenue of the industry reached north of $1.2 trillion in 2018. North America covers a large portion of the revenue with an emphasis on the role that the US plays. The US accounts for about a third of pharmaceutical revenue across the world. The North American region is responsible for approximately 50% of the share. The industry is expected to grow substantially in the near future. There are various factors that drive the development of the industry in varied areas (Leung & Jackson, 2019).

The core business of Tilray Inc. is in the cannabis industry. The industry comprises of organizations and parties that cultivate, produce, and distribute products that are solely based on cannabis. Other members of this industry are the consumers and regulatory bodies. Tilray participates in research production and sales of cannabis products. The cannabis industry has transformed into an essential part of the larger pharmaceutical industry to the tune of multibillion dollars. This shows just how much the industry contributes to economies around the world. The crucial aspect associated with this industry concerns the legalization of the use of marijuana. The status bears major implications on the outcomes of businesses related to the industry. Increased legalization has led to a major expansion of the industry in terms of product and sales.

PESTEL Analysis

PESTEL is an analytical tool that helps in monitoring and examination of factors within the external environment of particular businesses or industries (Perera, 2017). These factors impact the functioning of the organizations within an industry. It considers several aspects which include political economic social technological environmental, and legal perspectives. All these factors are relevant to the cannabis industry as they have influenced its development and progression in one way or the other (Bush, 2019).

The political point of view has been very critical to the current status associated with marijuana production and use. This factor is mainly associated with how governments address issues that are relevant to the economy. There have been several policies that have been involved in the regulation of cannabis use (Leung & Jackson, 2019). Marijuana has come a long way from the times when it was regarded as totally illegal and illicit. A good number of regions have legalized the use of marijuana over time with Canada leading the way as the home of Tilray Inc. (Leung & Jackson, 2019). The legal status provided the basis for the operations of the company. The US has been very influential towards the success of the firm in international grounds. The legalization of the product in the country in addition to its status as the leader in the pharmaceutical industry has propelled the business of Tilray Inc. This factor touches on the effect of foreign trade policy which also works in consideration of other countries where the entity has set up shop or exports its products. The businesses of Tilray Inc. are legit, and as such there are tax provisions that it meets in any given location (Perera, 2017).

Economic factors are crucial in any situation that involves an organization doing business. In the period of its existence, Tilray Inc. has grown tremendously. This growth has been aided by different aspects, including the expansion of the market due to increased legalization (Leung & Jackson, 2019). The broader market has translated to more customers, therefore, more business for the company. Tilray Inc. was the pioneer of the commercial production of cannabis for medicinal purposes. It was able to capture a vast market base thus serving an enormous demand. Economic situations such as inflation affect the sales of the products in countries that are affected (Leung & Jackson, 2019). In some cases, the prices need to be adjusted to suit the capacities of the customers in specific region. The exports of Tilray Inc. products are impacted by the foreign exchange rates of the destination (Perera, 2017).

Social factors are established on the attitudes and beliefs of particular people (Bush, 2019). Some of the factors include population growth, which does not directly affect business outcomes. However, there is a factor of age distribution, which is an essential aspect of medical marijuana use (Leung & Jackson, 2019). The products are usually for adults of any age and gender. Persons from diverse backgrounds and social status can access the products. Different cultures have varied beliefs about the product. Nonetheless, the use of medical cannabis is voluntary, and the outcomes are based on in-depth research on the effects of marijuana.

Technology has been impactful in the cannabis and pharmaceutical industry as it has occurred around the world over. Technological innovations have played a part in better production systems, which lead to premier products for customers (Bush, 2019). Current platforms, such as the internet are quite popular. This forms a major avenue for advertising and sharing of information which are vital factors in business. It provides a way to market Tilray products and means of communication with clients. Technology also helps in advancements as research helps yield cannabis strains and products that are more effective (Perera, 2017).

The environment in the cannabis industry has been vital in the development and sales of the products. Tilray Inc has situated the locations of its stores in town centers where customers can easily access. Accessibility is critical in business (Leung & Jackson, 2019). The weather and climate of the regions that are involved in cultivation should be consistent with the requirements for cannabis production. The use of greenhouses in some cases is essential in ensuring that the cultivation takes place with the help of best possible conditions. It has been able to acquire licenses for cultivation in foreign regions, including Portugal. It also has partners who participate in the distribution and sales of the company’s products. The industry conducts its operations and business in accordance with ethical and sustainable guidelines as set by the national governments (Perera, 2017).

The laws help in governing the running of businesses and organizations (Bush, 2019). The factor is especially critical as they change from time to time, thus affecting the business environment. The regulations provided in Canada and foreign markets are essential in the functioning of the company. Regulations in the US have been crucial in building the market base for the firm. The production is based on health and safety requirements. Product safety is one of the core considerations in cultivation and processing of marijuana. The company abides by the laws in specific country of operation. Other critical legal aspects that are relevant to Tilray Inc. are employment laws and consumer rights (Perera, 2017).

Key Trends for the Industry

Government policies are crucial in the operations of any business. The policies provide guidelines on the activities that a company can participate in (Jin et al., 2018). The policies are even more important when operating in foreign nations. Firms such as Tilray Inc. should effectively adjust to policies that have been established. The economic growth is impactful on the success of a business. Positive growth in any given economy fosters progression of businesses involved. This creates an environment where investments in the industry thrive. The attitudes that people have towards the industry and products is a core aspect in the social dimension.

People are more conscious of the medicinal benefits of cannabis, which has helped in the growth of the industry. The effect of technology is experienced in marketing of products. Technology has enhanced methods of communication and sharing of information which has increased marketing and awareness of the industry (Jin et al., 2018) and some of the companies that are involved in it. Ethics and sustainability are important considerations for all companies (Leung & Jackson, 2019). It is vital that the production of goods is done in a way that is beneficial to the people and the environment. Laws pay a central role in the industry, the legalization of medical cannabis, and regularization of the production form the backbone of the business (Jin et al., 2018).

The law is the starting point of the whole process. Cannabis was extensively prohibited in the past, and it still is in many parts of the world. This part of the pharmaceutical industry came about after the decriminalization of the products took off. Legalization of medical cannabis use was the basis for the rise of the industry. There are more developments that will take place in matters of legalization. Such developments will provide Tilray Inc. with a larger market base for its products and new locales for investments and partnerships.

Key Areas of Uncertainty

The process of legalization of cannabis use is a long and tedious one. Legislation processes take a significant while before changes are implemented. In some regions motions to allow the use of medical marijuana has failed to take shape mainly due to resistance to the idea. Other situations are showing much potential, but the outcome of legislation is generally uncertain. More regions are increasingly addressing the subject, but it is unwise to develop a foreign strategy based on results that are yet to be determined.

Company Mission, Vision, and Objectives

The vision of Tilray Inc. is to “aspire to lead, legitimize, and define the future of the industry by building the world’s most trusted cannabis company.” Also, to pioneer the future of medical cannabis research, cultivation, processing, and distribution globally, and are one of the leading suppliers of adult-use cannabis in Canada” (Tilray Inc, 2018). According to Saylor. Org (Ch.2, pg.40), “a vision is one key tool available to executives to inspire the people in an organization. An organization’s vision describes what the organization hopes to become in the future”. Tilray Inc. looks to become the global leader in cultivation production and distribution of cannabis. The company has set eyes on leading legitimization and progression of the industry into the future through its quality products (Tilray, Inc 2018). The company’s statements and objectives represent the essence of the organization. These aspects have provided an obvious target which displays the mountaintop where the firm aims to reach. It is largely purpose-driven as it gives stakeholders a sense of direction. The statement sets in the feeing that individuals are part of something significant and meaningful. The vision builds on its main competencies and inspires through setting a challenge and creation of a mental image which brings out passion and desire. There is clarity in where the future of the company is and the core business of the firm.

There is no stated mission statement in the company’s portfolio as main aspects are combined into the vision statement. But according to Saylor.org (Ch.2, pg. 41), a mission statement is supposed to provide answers to the fundamental question of “Who are we?”. Going by the vision statement of Tilray incorporation’s, the company’s plan is to promote community well-being through the production of premier cannabis products for medical and adult use.

Conclusion

Tilray Inc. is a premier pharmaceutical organization that deals with cannabis production and sales. The cannabis industry is growing fast, having been conceived within the last few decades. The PESTEL analysis helps display the core aspects that are relevant to the industry and the company in particular. The analysis is a representation of the political-economic social technological environment and legal factors in the running of the medical marijuana business. Evaluation of the external environment provides insight into the influence of these factors on the business. The findings are basis for comprehension of the whole industry at large, and they enable the discernment of core elements in management of a successful firm.

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