MARKETING MANAGEMENT

Name: Syed Yahya Tariq Farooq

Roll# 22I-2254

This is an essay on the external environmental analysis of the business, “PepsiCo”.

An external environmental analysis (factors outside a business that can affect its operation by
influencing its activities and choices and determine its opportunities and risks, consists of General &
Task) can help identify all the factors that can effect PepsiCo in the global market.

The General Environment: is everything outside an organization’s boundaries and it consists of the
following:
(i).Political:
Political factors include external factors such as government policies and regulations that
directly affect the company. Good intergovernmental relations are a source of business for
global companies such as PepsiCo. Threat factors include many of the government's soft
drink and population health policies as one of the main threats to PepsiCo.
(ii).Economic:
The performance of a company like PepsiCo is directly proportional to the economic stability
of the country in which it operates. In regions where countries are more developed, there are
more ways to create new business opportunities. The potential threat in this perspective is a
slowdown in the Chinese economy, as it is one of the largest in the economies in the world.
(iii).Socio-Cultural:
Social factors include people's values and way of life, but most crucially, local culture. For
instance, people today are more prone to consume fast food and soft drinks and this culture
presents a business opportunity for beverage firms like PepsiCo. In countries where the
population is more aware of their health, such statements can sometimes be a threat and
sometimes an opportunity for the world.
(iv).Environmental:
These factors include high standards and policy expectations for waste disposal. There must
be a focus on business sustainability. One of the world’s concerns about climate change is the
threat and sometimes an opportunity for global companies like PepsiCo. Careful planning and
taking the company in the right direction will provide a new space for opportunities. On the
other hand, there are also potential threats in terms of competitors and change in the global
scenario of new business laws and practices.
(v). Demographic:
PepsiCo demographics cover the age range of 15 to 45, both male and female. The broad age
group of Pepsi consumer demographics tends to exclude young children and elderly
individuals, who are less likely to enjoy the caffeine-laden beverage, or those who are too
young or old to enjoy their other products.
(vi). Technological:
PepsiCo is in a good position to benefit from the most recent technological changes as a
business. Using big data analytics and machine learning capabilities, PepsiCo can streamline
its Research & Development processes and launch more targeted, focused marketing
campaigns across the entire scope of digital media. It can also increase the efficiency of their
production by using the latest automation technologies.
 MARKETING MANAGEMENT
Name: Syed Yahya Tariq Farooq
Roll# 22I-2254

The Task Environment: is composed of specific groups and organizations that effect the firm, they
are:
(i).Suppliers:
PepsiCo has more bargaining power than its suppliers due to the fact that there are many
suppliers PepsiCo can chose from. Suppliers form a strong group and exert little pressure or
pressure in the case of PepsiCo. PepsiCo has more control and suppliers want to keep their
business with the soda giant which leads to chances of these suppliers integrating forward and
competing with PepsiCo are very low.
(ii).Consumers:
Small businesses and individual buyers have no significant bargaining power. Retailers like
Costco have some negotiating power and influence because they buy in bulk. PepsiCo’s
market is not concentrated in a particular region but is spread all over the world. Given all
these factors, the bargaining power of clients is weak.

(iii).Competition:
Without the competition between PepsiCo and Coca Cola, the soda giants would have
invested less in marketing and advertising. These two brands remain preoccupied with
intense competition and people also believe that the cola wars continue. The competition
between Coca Cola and PepsiCo has always attracted a lot of publicity and interest. Overall
competitive competition in the industry is the strength of the market. The threat from other
brands is lower, but among the major players it is a very strong force.