Case Discussion: PESTLE ANALYSIS : PEPSICO

PepsiCo is the largest selling beverage the world over, of course after its arch rival Coca Cola. It accounts for a 37% share of the global beverage market, and therefore they need to understand each and every country’s market in order to stay in line with their PESTLE situations. Pepsico is a big brand, currently holds the 23rd place in the Interbrand report of the World’s Leading Brands. Their advertisements feature major celebrities and athletes like David Beckham, Robbie Williams, Britney Spears, Michael Jackson, Kendall Jenner etc.
Their market reach is also very diverse, as they’re present in almost every country from the US to New Zealand. A probable PESTLE analysis for them is given below:

Political:


Major economies like the United States and Canada are politically stable but in many parts of the world civil unrest in certain markets results in sales dip, product seizure, disrupted supply chain, product damage and hence losses. Most importantly, cross border situations are starkly different therefore Pepsi has to stay in line with all those policies and changes so that they can adapt to all those changes accordingly.
Besides, US government initiatives against sweetened carbonated drinks are a threat that could reduce PepsiCo’s revenues in the upcoming future. Due to new introduction of an American tax called the soda tax, the price of soda rose 3 cents per ounce when adopted by Philadelphia. Although this soda tax originated in 2015 but since Philadelphia’s adoption, Oakland, Seattle (Washington), San Francisco, and Boulder Colorado have also integrated this change. The government is trying to make a point- sugar and obesity is the biggest threat to American youth health today and a stop has to be put to it.

Economic:


As the recent economic downturn has plagued the economy, companies had to restructure their sales and marketing campaigns greatly- so they will have to rethink budget. Also, if profits diminish they may have to undergo downsizing internally and re-think upon how to increase the sales. Economic conditions have the highest influence on a business, regardless of what trade it is in.
Social:
Social factors greatly impact Pepsico, as it’s a non-alcoholic beverage it has to remain in line with the strict and stark differences of cultures the world over. Also, Pepsi has to communicate its image as a global brand so that the people can associate it with themselves as something that connects the world together. People are avoiding sweetened aerated beverages (an average can has 40 sachets of sugar) and obesity is becoming a concern- they have to address these concerns.
Pepsico is running various CSR projects globally for food, water and children well-being.


Technological:


With the advent of the new age in technology, companies have completely integrated themselves with all the recent changes that have taken place. To mention a recent trend that has greatly picked up and something that almost every business is turning toward is Social Media for advertising. The social media explosion has allowed for increasingly interactive engagement with the consumers with real time results so Pepsi has to stay ahead of all the developments that take place with keeping in view how the youth of today utilizes technology for their benefit and how can Pepsi reach them in order to keep on increasing brand recall and brand engagement.
E-commerce delivery can also be looked at. Factory automation is another developmental focus area and technology upgradation could help production.

Legal:


There can be many legal implications upon the beverage industry.
Pepsi is a non-alcoholic beverage and is therefore regulated by the FDA. So, they’re supposed to maintain a firm standard of the laws set out by the FDA with consistency. Also, many different markets across the world have different set of regulations that are either relaxed or are either stringent.
In the early decade of this century, Pepsi was accused of using contaminated water in Indian market, given a lab test that was done upon the water flowing into the Pepsi factory that was located nearby an industrial estate. A massive recall was issued for the products from shelves and then the product was tested costing the company many billions of dollars upon the tests as India is a very major market. Pesticide charges were another legal controversy.

Environmental:


Plastic is adding to environmental strain and so bottling /packaging will have to be thought again.
Over utilization of water resources for manufacturing has created a concern today.