Example of a PEST analysis: PepsiCo
Example of a PEST analysis: PepsiCo
Introduction
PepsiCo, the largest beverage company in the world, accounts for about 40 percent of the beverage market globally.
It operates in 150 countries, including India. Using a PEST analysis, let us see what changes in PepsiCo’s external environment (PEST factors) in these countries might affect the expectations of its global results.
Political factors
- Governments may changes their tax policies and tax rates, which would affect profits.
- Governments could bring in stricter capital transfer laws and labour laws, which would affect its resource and employee management, respectively.
- Civil unrest and political instability exist in some countries, which may unsettle its expansion plans.
Economic factors
- Although the economies of many countries are showing signs of recovery, the threats of recession continue, which would affect consumer spending.
- Rapid fluctuations in currency rates have influenced the prices of raw materials, which would force the company to review its sourcing plans.
Social factors
- Consumer awareness about the impact of carbonated drinks is increasing, which would affect sales.
- Healthy lifestyles are gaining popularity, which, again, would affect sales.
Technological factors
- Technological innovations have been made in beverage manufacturing, which would help maintain product quality.
- Internet-enabled technology has benefited manufacturing, which would facilitate smooth processes.
