This PESTEL Analysis of PEPSI examines the political, economic, social, technological, environmental, and legal factors that impact the industry. By analyzing these factors, businesses can make informed decisions about their operations and strategies.
The mentioned factors covered in this article could be positive or negative for the company, however determining those factors proactively helps the firms operating in this industry to devise the strategies to capitalize on the available opportunities and eliminate or minimize the threats.
PepsiCo is the second largest company, which is dealing business in the food and beverage and it has maintained its trust among its clients. This industry has spread its business around the world and it is providing its products in almost all of the countries. The company has tremendous decision making strategy and its distribution channel is also very quick and effective, and you can find its products in the far off and rural areas of the world. It has the revenue of over $60 billion and there are about 285,000 employees, who are concerned with their business. The company is providing the services with great integrity, and moral standards. It has long range of products, which you can find in almost all big and small cities, which are growing the business of this company.
Political Factors
Pepsi is the non-alcohol beverage and it follows the terms and conditions, which are necessary to abide by while doing the processing of manufacturing of these products. It deals in different markets and follows their policies and procedures. It has to face the cross border situation and it adapts these changes to continue flow of the products (Sara Algoe, 2016).
The political stability in America and other western countries help the company to sell its food beverages. The company has to follow the rules and regulations of tax and initiatives of the tax policy. There are effective employment rules and regulations to safeguard the rights of the employees and it has to abide by the health and safety policies and regulations, which are governing in most of the countries (John Dudovskiy, 2014).
Pepsi has to face with other competitors in the market and it offers the competitive prices to the clients. It has to face some civil disturbances in the some market, which are occurred due to different political situation of the countries. The inflation in the economy can also tell upon the sale of the products and the cross border situation also affect the business of company as they are working in any particular situation in any country, but the economic situation of the next country is totally different (Jim Makos, 2015).
Economical factors
The main economic factor is consistent and rapid change in currency exchange rate, which affects the financial position of the company. The price of the raw materials also fluctuates, and the unemployment rate in USA and other countries, where it has plants, tell upon the business. US have diverse fiscal and monetary policies to maintain its business across the world (John Dudovskiy, 2014).
The company has many opportunities to grow its business and get the economic stability of the developed countries. The company may face some economic issues in the global expansion with the current slowdown in China, as it is big economic power and it can affect its global business (Pauline Meyer, 2015).
Social Factors
There is great social shift in the societies of different countries and it is shown in TVC presenting the beverages of this company to the guests in different religious festivals. The social behavior of the people is also changes and this company is proved great trend setter. But due to different reasons, the consumer attitudes are also changed and they are also aware of the healthy lifestyles and they are going away from the carbonated drinks (John Dudovskiy, 2014).
Due to spread of different diseases, people become know of the threats of the carbonated drinks and they also have the concern about sugar, salt and fat content in these products. People also become aware of the healthy habits and they are moving towards the traditional beverages of their local companies, which is creating threat for this company (Pauline Meyer, 2015).
It becomes customs in different countries to use the soft drink of this company at different occasion to serve the guest and it become necessary in various ceremonies like office parties, seminars, wedding ceremonies and in the religious gathering. Now the people have accepted this carbonated drink as part of their life (Jim Makos, 2015).
Technological Factors
Various new technologies have been introduced in the market and they are giving awareness to the people about these products. Now the company has changed its strategy and started using of SAP software and the wind power manufacturing, which is introduced in India. It also introduced plastic bottles and cans in unique designs as their technological advancements. The company is also using the social media in its favor for the promotion of its products and creates awareness about the change in their manufacturing (Sara Algoe, 2016).
PepsiCo spent a huge amount on the activities of research and development, which can help the company to understand the new trends in the market. They also improved the knowledge management system of the company and also increased the automation in the business and it is also supporting the business processes along with decision making strategies to enhance the performance in the market. Now the company is using new technology in its business and taking the initiatives to improve the competition in the business (Pauline Meyer, 2015).
Environmental Factors
The company has the high focus on the sustainability of the business and there are various complex expectations and has different standard on the disposal of waste. The climate change has diverse affect on its business so the company has to change its disposal of waste strategy to gain more attention of the clients. Now the company has to improve the environmental impact to get stability for its supply chain (Pauline Meyer, 2015).
The company should adhere to the environmental implications on the packaging practices. There is great impact of the global warming on the drinking patterns of the clients, which can leave positive impacts on the consumers. PepsiCo has to increase the importance of the substitute energy sources so that it can grab more clients (John Dudovskiy, 2014).
Legal Factors
If the changes are made in the Food Standard Agency, then it can have direct impact on the business of this company and the federal rules and regulations can also affect the food and beverage sector (John Dudovskiy, 2014). With the regulation of genetically modified organisms, the business of the company will get the opportunity to reduce it and they can get the satisfaction of the clients. The company will have to improve the quality of its products, which has direct link with health effects and safety and they have to make strategic decisions (Pauline Meyer, 2015).
References
Jim Makos (2015), STEEP Analysis Example of Pepsico, available at http://pestleanalysis.com/steep-analysis-example-of-pepsico/
John Dudovskiy (2014), Pepsico PESTEL Analysis, available at http://research-methodology.net/pepsico-pestel-analysis-2014/
Pauline Meyer (2015), PepsiCo PESTEL/PESTLE Analysis & Recommendations, available at http://panmore.com/pepsico-pestel-pestle-analysis-recommendations
Sara Algoe (2016), SWOT and PEST Analysis of Pepsi Co – World leader in convenient snacks, available at hubpages.com/business/SWOT-and-PEST-analysis-of-Pepsi-Co