COURSE:

MANAGEMENT ETHICS

GROUP:
AYESHA MEHMOOD (H1797009)
AYESHA SARFRAZ (H1797010)
BISMA BASHEER (H1797011)
BUSHRA KULSOOM (H1797013)
M. AMEER HAMZA (H1797042)
MUNAZZA (H1797049)
QAMER ALI (H1797052)
QAZI HASSAN (H1797053)
UNZILA HASAN (H1797066)

DEPARTMENT OF PUBLIC ADMINISTRATION,

UNIVERSITY OF KARACHI.
2021
 TABLE OF CONTENT

INTRODUCTION OF PEPSICO ...................................................................................................................

HISTORY OF PEPSICO ................................................................................................................................
HISTORY OF PEPSICO IN PAKISTAN ......................................................................................................
INUDSTRIAL ANALYSIS ............................................................................................................................
 ABOUT THE COMPANY
In 1965, Donald Kendall, the CEO of Pepsi-Cola, and Herman Lay, the CEO of Frito Lay, recognized
what they called “a marriage made in heaven,” a single company delivering perfectly-salty snacks
served alongside the best cola on earth. Their vision led to what quickly became one of the world's
leading food and beverage companies: PepsiCo.
PepsiCo, Inc. is an American multinational food, snack, and beverage corporation headquartered in
Purchase, New York. PepsiCo has interests in the manufacturing, marketing, and distribution of grain-
based snack foods, beverages, and other products. For more than 50 years, as tastes, trends and lifestyles
have changed, PepsiCo has evolved with them. Our willingness to adapt and grow has transformed our
snack and soda company into a collection of global brands including Pepsi and Quaker, Gatorade and
Tropicana, Frito Lay and beyond. Today, PepsiCo is one of the world’s most-respected companies with
products sold in more than 200 countries and territories and 22 brands that generate more than $1 billion
each in estimated annual retail sales. Approximately 274,000 employees generated $66.415 billion in
revenue as of 2013. In 2019, PepsiCo adopted a new vision: to Be the Global Leader in Convenient
Foods and Beverages by Winning with Purpose.
PepsiCo is made up of six divisions: PepsiCo Beverages North America; Frito Lay North America;
Quaker Foods North America; Latin America; Europe Sub-Saharan Africa; and Asia, Middle East and
North Africa. Each of these divisions has its own unique history and way of doing business

HISTORY OF PEPSICO
1934 The Pepsi Brand's first expansion outside the USA occurred on June 12, 1934, with the opening
of a bottling plant in Montreal (Quebec). We were able to expand into Canada after franchise territory
rights were granted to Franchise-Owned Bottling Operations (FOBOs). More than 80 FOBOs were
approved, with each being responsible for the bottling, distribution and selling of Pepsi products in their
defined territory under a contract called the Exclusive Bottling Appointment (EBA). Many of these
FOBOs embraced our Pepsi brand as their own and it quickly became an integral part of their
communities - creating a solid foundation for our future success as a market leader in Canada. 
1980’s In the 1980s a consolidation of FOBOs occurred in the bottling
industry.
1986 PepsiCo, Inc., acquired the 7UP brand from Phillip Morris
worldwide (excluding the USA), thereby gaining the popular lemon-lime
carbonated soft drink position in Canada and boosting our company to its
market leader position in retail stores.
1990 PepsiCo Canada acquired a number of FOBOs.

1998 PepsiCo, Inc., acquired Tropicana.

1999 The Pepsi Bottling Group was created out of the acquisition of these
the bottling businesses.
2001 PepsiCo, Inc., acquired Gatorade.
2008 PepsiCo Canada's businesses were reorganized, and the business
unit PepsiCo Beverages Canada was formed.
2009 PepsiCo, Inc., announced its plan to acquire back all of the
outstanding shares of The Pepsi Bottling Group in Canada. Currently 88%
of Canadian sales of Pepsi beverages flow through The Pepsi Bottling
Group and 12% via 9 remaining FOBOs.
2010 PepsiCo Canada merged its beverage bottling and brand business
operations, forming one unified Canadian beverage organization –
PepsiCo Beverages Canada.

HISTORY OF PEPSICO IN PAKISTAN

PepsiCo entered the Pakistani market in 1979, where it entered into a partnership with Pakistan Bottlers.
PepsiCo then built out partnerships with seven other local bottlers throughout Pakistan and gained a
commanding share of the Pakistani beverage market.
The market in Pakistan is surely dominated by Pepsi. It has proven itself to be the No.1 soft drink in
Pakistan. Now days Pepsi is recognized as Pakistanis National drink. In 1971, first plant of Pepsi was
constructed in Multan, and from them after Pepsi is going higher and higher. Pepsi is the choice soft
drink of everyone. It is consumed by all age groups because of its distinctive taste. Compared with other
Cola in the market, it is a bit sweeter and it contributes greatly to its liking by all. Consumer’s survey
results explain the same outcome and Pepsi has been declared as the most wanted soft drink of Pakistan.
Pepsi’s greatest rival is Coca Cola. Coca Cola has an international recognized brand. Coke’s basic
strength is its brand name. But Pepsi with its aggressive marketing planning and quick diversification
in creating and promoting new ideas and product packaging, is successfully maintaining is No.1 position
in Pakistan. In coming future Pepsi is also planning to enter into the field of fruit drinks. For this
purpose, it has test marketed its mango juice in Karachi for the first time.
Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan. These bottlers are Pepsi’s
strength. Pepsi has given franchise to these bottlers. Bottlers produce, distribute and help in promoting
the brand. When Pepsi was introduced in Pakistan, it faced fierce competition with 7up, lemon and lime
drinks, which was established during 1968, in Multan. Pepsi introduced its lemon and lime, “Teem” to
compete with 7up. It successfully, after some years, took over 7up, and this enhanced Pepsi’s profits
and market share. In Pakistan, Pepsi with 7up enjoys 70% of the market share whereas the coke just has
20% markets share. Now a days PepsiCo. Is focusing on youngster’s best choice Mountain Dew as an
energetic soft drink.

INDUSTRY ANALYSIS OF PEPSICO

SWOT ANALYSIS
Below is the Strengths, Weaknesses, Opportunities & Threats (SWOT) Analysis of PepsiCo:
STRENGTH:
• One of the most popular and globally recognized brands in foods and beverages.
• One of the most diversified product portfolios.
• Popular subsidiary brands like Frito Lay, Gatorade, Pepsi, Quaker, Tropicana, Yum!
Brands, etc.
• Global reach with presence in over 200 countries.
• An employee strength of around 300,000 people.
• CSR through PepsiCo Foundation, which works in the sector of education, health, water
conservation, education etc.
• Pepsi Refresh Project that funds new ideas or ventures that have the potential to benefit
the society.
• Strong and efficient supply chain network, ensuring that all the products are available
even in the most remote places.
• Excellent branding and advertising with global celebrity as brand ambassadors.
• Tie-ups, sponsorships with global sports events, music concerts, etc.
WEAKNESSES:
• Strong competition in the aerated drinks segment from Coca Cola means high brand
switching.
• Cases against products have been blown out of proportion for long term effect of health,
thereby affecting brand image.
OPPORTUNITIES:
• Increase penetration into developing countries and capture their market.
• Increase its product portfolio by acquisition of other brands.
• To maximize more advertising.
• To improve its brand image by involving in more CSR activities to benefit the locals.
THREATS:
• Health consciousness amongst people can take a toll against it and may completely
boycott.
• Compliance issues with different government regulations and norms in different
countries.
• Inflation, economic slowdown and instability causes decline in the purchasing power of
consumers.
• Strong competition from other brands in each segment of its operation.
 PESTEL ANALYSIS
PepsiCo is the second biggest company in the global food and beverage industry. To keep this position,
Pepsi’s strategic decision-making processes must account for the issues outlined in this
PESTEL/PESTLE analysis. The PESTEL/PESTLE analysis model is a strategic management tool that
identifies various external factors relevant to firms, based on the conditions of their remote or macro-
environment. In PepsiCo’s case, these factors determine the company’s growth path. The global market
presents challenges that threaten Pepsi while creating opportunities for improvement. Thus, strategies
and reforms based on the elements of the PESTEL/PESTLE analysis model can boost PepsiCo’s long-
term growth. Pepsi’s long-term growth trajectory is partly dependent on how the company addresses
the major issues identified in this PESTEL/PESTLE analysis. Pepsi must develop strategies that
enhance its abilities to withstand the external factors in its remote or macro-environment. There are 6
factors which affect the business. The factors are:

1. POLITICAL FACTORS
Governments are external factors that impose requirements on PepsiCo. This element of the
PESTEL/PESTLE analysis considers the effects of governmental action on companies’ remote or
macro-environment. PepsiCo must address the following political factors:

• Political stability in major economies (opportunity)

• Improved intergovernmental cooperation (opportunity)
• Government initiatives against carbonated drinks (threat)
Major economies like the United States and Canada are politically stable, thereby presenting growth
opportunities for PepsiCo. In addition, the trend of intergovernmental cooperation improves
opportunities for global expansion. However, government initiatives against sweetened carbonated
drinks are a threat that could reduce PepsiCo’s revenues from affected segments. In this element of the
PESTEL/PESTLE analysis, PepsiCo must consider changing its products to overcome the identified
threat about carbonated drinks.

2. ECONOMIC FACTORS
Important to PepsiCo’s performance is directly linked to the economy. The influence of economic
conditions on the remote or macro-environment of businesses is covered in this element of the
PESTEL/PESTLE analysis. The political external factors that relate to PepsiCo are as follows:
• Economic stability of most major markets (opportunity)
• Rapid growth of developing economies (opportunity)
• Slowdown of the Chinese economy (threat)
PepsiCo has opportunities for growth and expansion based on the economic stability of developed
countries like the United States, as well as the high growth rates of developing economies, such as those
in Asia. However, the current slowdown of the Chinese economy threatens PepsiCo’s potential
international growth, considering that China is among the biggest economies in the world. This element
of the PESTEL/PESTLE analysis shows that PepsiCo must ensure market diversification to achieve
stable international growth.
3. SOCIAL/SOCIO CULTURAL FACTORS
Many of PepsiCo’s consumers follow socio cultural trends. This element of the PESTEL/PESTLE
analysis identifies the impact of social conditions and changes on companies’ remote or macro-
environment. The following are notable socio-cultural external factors relevant to PepsiCo’s business:
• Higher health consciousness (threat & opportunity)
• Increasing busy lifestyles (opportunity)
 • More discriminating attitudes about product quality (opportunity)
Higher health consciousness is a threat to PepsiCo because of concerns about the sugar, salt, and fat
content of its products. However, this external factor also presents the opportunity for the company to
improve its products to address such concerns. PepsiCo can also take advantage of the busy lifestyles
of consumers, especially in urbanized and industrializing markets around the world. People with these
lifestyles are more likely to purchase ready-to-eat food products like those of PepsiCo. The company
has the opportunity to continue enhancing product quality to maximize revenues, with regard to
consumers’ increasingly discriminating attitudes about product quality. Based on this element of the
PESTEL/PESTLE analysis, PepsiCo must align its products and marketing strategies to changes in
consumer behaviors.
4. TECHNOLOGICAL FACTORS
PepsiCo’s business is partly dependent on technologies. The link between technological change and
companies’ remote/macro-environment is examined in this element of the PESTEL/PESTLE analysis.
The technological external factors significant to PepsiCo are as follows:
• Moderate R&D investments in the food and beverage industry (opportunity)
• Improving knowledge management systems (opportunity)
• Increasing automation in business (opportunity)
Based on moderate research and development (R&D) investments in the industry, PepsiCo can boost
its own R&D investments to improve its competency in this business aspect. Also, Pepsi can exploit
the benefits of knowledge management systems to support its various business processes, such as
product innovation and strategic decision-making. In addition, an increase in the number of automated
processes in the company can enhance business performance. This element of the PESTEL/PESTLE
analysis indicates that PepsiCo must include new technologies as tools to improve business
competitiveness.
5. ECOLOGICAL/ENVIRONMENTAL FACTORS
PepsiCo’s supply chain and brand image are linked to environmental concerns. This element of the
PESTEL/PESTLE analysis considers the ecological trends and issues that affect consumers, employees,
and companies’ remote or macro-environment. The following ecological external factors are significant
to PepsiCo:
• High focus on business sustainability (opportunity)
• More complex expectations and standards on waste disposal (opportunity)
• Climate change (threat & opportunity)
Consumers are now pushing companies like PepsiCo to improve their sustainability standing. In
relation, Pepsi can improve its waste disposal strategies, such as recycling, to gain more support from
customers. On the other hand, climate change poses a threat to PepsiCo’s supply chain. However, the
company can further diversify its global supply chain to minimize risk exposure to climate change.
Based on this element of the PESTEL/PESTLE analysis, PepsiCo must improve its environmental
impact to attract and retain customers, and to stabilize its supply chain.
6. LEGAL FACTORS
PepsiCo and its competitors are subject to legal requirements. Such requirements and regulations are
evaluated in this element of the PESTEL/PESTLE analysis in terms of their effect on the industry’s
remote or macro-environment. The legal external factors relevant to PepsiCo’s business are as follows:
• Regulation on GMO ingredients (opportunity)
• Health and product safety regulations (opportunity)
• Moderate rate of regulatory change (opportunity)
Genetically modified organisms (GMOs) are now increasingly regulated worldwide, particularly in
Europe. PepsiCo has the opportunity to reduce its use of GMO ingredients to satisfy these regulations.
Similarly, the company can improve products to address regulations about product safety and health
effects. The moderate rate of regulatory change gives opportunity for PepsiCo to grow with the
expectation that its current strategic decisions will satisfy regulatory requirements in the long term. In
this element of the PESTEL/PESTLE analysis, it is shown that PepsiCo can focus on product innovation
to comply with regulations

REFERENCES
https://tribune.com.pk/story/493197/food-and-beverages-pakistan-among-pepsicos-top-10non-us-
markets/
https://www.dawn.com/news/1329368
https://www.wsj.com/articles/SB10001424052748704720004575377190499667312
https://aurora.dawn.com/news/1142803
https://www.forbes.com/sites/greatspeculations/2016/03/16/how-pepsico-is-improving-itsbrand-
loyalty/#4dd76ccd1555
https://www.pepsico.ca/en-ca/about/about-the-company
https://www.vault.com/company-profiles/food-beverage/pepsico-inc
https://pestleanalysis.com/pest-analysis-of-pepsico/