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Critical Analysis of Pepsi Company 1

CRITICAL ANALYSIS OF PEPSI COMPANY

Course
Global Business

Critical Analysis of Pepsi Company 2

Abstract
In the contemporary business industry, many companies are seeking to expand into the
foreign markets
...
Also, multinational companies scrutinize business trends before they
resolve to establish in other markets
...
Further, the research incorporates the
study of Pepsi Company in its local and foreign markets
...


Critical Analysis of Pepsi Company 3
Table of Contents
Abstract
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4
Critical Analysis of Pepsi Company in the United States
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5
Porter’s Five Forces Model
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6
PESTLE Analysis
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10
Conclusion
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12

Critical Analysis of Pepsi Company 4
Introduction
Pepsi is a multinational company that offers food, snacks, and beverages to the
consumers
...
It was founded by Caleb Bradham
...
Moreover, the corporation has a global presence in more than 200 countries in the
world
...
7 billion
...
Still, the company has ventured into other
markets
...

Further, Pepsi has incorporated aggressive marketing strategies in addition to alluring
campaigns to persuade potential customers to buy their products
...

Critical Analysis of Pepsi Company in the United States
In the United States, the company generated approximately $37
...
In 2011, the company had a market share of 28
...
Pepsi Company is well
recognized, and this factor has stimulated its growth both at the local and international levels
...
The
company has various brands which include Pepsi and Aquafina among others
...
Additionally, Pepsi is keen on
innovation and product development to meet the changing needs of the consumers in the
global market
...
The company also leads in other foreign markets
because of its international product development
...
Further, Pepsi is keen on brand management
and international partnering (Aguirre-Mar, 2013)
...
Additionally, the company has partnered with other global
divisions to promote diversity and take up the leading position in the expansion of sales and
distribution
...
There are also favourable factors in the emerging economies which have
stirred demand for beverages and food
...

Note that Pepsi is driven by the need to tap into the foreign market opportunities
...
PepsiCo
identifies the need to grow and accrue advantages
...
Consequently, the
global recognition helps the organization to maximize the profits made
...

India’s Business Environment
The soft drinks industry in India is dominated by three major global players
...
Among them, Pepsi is one of the leading
food and beverage companies in the region
...
PepsiCo
has incorporated a diversified product portfolio since it entered the Indian market in the year
1989
...
The company has an objective of investing $5
...

Pepsi aims at improving the infrastructure and innovation
...
The framework evaluates five industry forces to identify the level of competition
...
Also, the switching costs to other suppliers
are low as the sellers are many
...

Pepsi is one of the companies that have dominated the Indian market and, hence, it would be
challenging for new entrants to compete it at this high level
...
Further, the company strives
to ensure that the customers establish brand loyalty
...
This strategy also helps the company to mitigate the threat of substitutes
...
The company
offers various brands of snacks, drinks, and food
...
However, Pepsi
is still investing significantly in the Indian market to keep the threat of substitutes at bay
...
For instance, Pepsi Company has the following strengths in the
Indian market
...
Also, new brands
have been established to meet the sociocultural needs of people
...

➢ The company has an extensive distribution network within India with more than 2M
outlets
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➢ Pepsi Company has a loyal customer base
...

➢ Pepsi Company has experienced reduced revenues in India because of decline in the
sale of carbonated drinks (Gentleman, 2006)
...

➢ Some of the products have been labelled as unhealthy by the customers; the soft
drinks have been identified to contain toxic substances from pesticides (Vedwan,
2007)
...

➢ The company can exploit opportunities that are brought about by globalization
...

➢ Pepsi Company also has an opportunity to undertake research and development to
bring forth healthier products and new flavors for the soft drinks
...

➢ There are chances of being outcompeted in the market by other well-established
brands
...

For instance, factors such as inflation and recession affect the performance of the
company
...

PESTLE Analysis
The political environment is one of the major factors that influence businesses
...
In India, the year 2006 was challenging for
Pepsi and Coca-Cola
...
Additionally, political instability and other government initiatives that have been
developed in the state to reduce the consumption of the soft drinks serve as a threat to the
multinational company (Aiyer, 2007)
...

Pepsi Company also faces challenges posed by the economic environment
...
Usually, economic growth is an opportunity for the companies to exploit
the emerging markets
...
There are various market imperfections and fluctuations in the exchange rates that
impede the financial growth of the company (Amine & Raizada, 2015)
...


Critical Analysis of Pepsi Company 9
Another factor is the socio-cultural environment
...
Various social
conditions can be attributed to the residents of India
...

Currently, the customers prefer healthier products
...
The firm’s portfolio of products includes healthier goods such as Tropicana juices
and Quaker Oats among others (Yadav et al
...
However, it is still a threat because of
the high amount of sugar levels and fat content in the products offered
...

Next is the technological environment
...
In India, Pepsi Company uses technology to establish innovative
measures to bring about product development
...
Technology also involves the automation processes to help increase
efficiency and the productivity of the business
...
For Pepsi, technology helps to improve innovation and create a
competitive advantage
...

Also, ecological factors are matters of concern
...
One of the environmental issues in Pepsi
was the presence of pesticides in the soft drinks
...
On the other
hand, by the year 2009, Pepsi Company was the leader in achieving a positive water balance
in India
...
The environmental conservation measures that have been embraced in the past

Critical Analysis of Pepsi Company 10
include the use of renewable sources of energy, waste to wealth programs, water
conservancy, and eco-friendly means of packaging among others
...
This pertains to the legal
requirements that Pepsi Company is supposed to fulfill
...
This is also meant to avoid
possible conflicts as a result of toxic products (Fitzsimmons et al
...
The company is
also subject to federal laws pertaining to the acquisition of property, labour standards, and
other environmental regulations in the host country
...
The
economic patterns affect the purchasing powers of the customers
...
These changes
affect the infrastructural development and the trading patterns in the country
...

The political dynamics are also a driving force of change
...
Laws and restrictions that the government may set bring about
changes
...
Changes in governance also affect the organizational domains
...
There were claims that the company would drain the
country's resources
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The changes in the family structures, population growth, and the values and preferences of
the residents of the nation are dynamic
...
Pepsi should always strive to meet new demands for it to stay in the
competitive market
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Technology is another factor that brings about development
...
First, it is used to achieve sustainability in a
country
...
In general, technology is utilized in most sectors of the Indian economy to
bring about efficiency in operations and improve productivity
...

Conclusion
In conclusion, it is worth noting the factors which drive a company’s need to expand
and establish in other countries
...
I would recommend that the company which
plans to venture into a new market should evaluate the macro-environmental factors before it
invests
...
Similarly, the company should seek to fulfill the local needs
of the consumers
...
, 2013
...
Journal of
Strategic Leadership, 4(2), pp
...

Aiyer, A
...
The Allure of the Transnational: Notes on Some Aspects of the Political
Economy of Water in India
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640-658
...
& Raizada, D
...
Market Entry into the Newly Opened Indian Market: Recent
Experiences of US Companies in the Soft Drinks Industry
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287-292
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, Miska, C
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, 2011
...

Gentleman, A
...
India Widens Ban on Coke and Pepsi
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nytimes
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html
PepsiCo, 2013
...
[Online]
Available at: http://www
...
com/live/story/PepsiCo-India-A-High-Priority-Market-forPepsiCo111820131227
Vedwan, N
...
Pesticides in Coca‐Cola and Pepsi: Consumerism, Brand Image, and
Public Interest in a Globalizing India
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659-684
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, Kamboj, S
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, 2016
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Journal of Direct, Data and Digital Marketing
Practice, 17(4), pp
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