Pepsico Case

Published: 2021-06-29 06:32:08
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Category: Business

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As one of the world's largest food and beverage brands and top rated Fortune 500 Corporation, PepsiCo has become a global powerhouse with 22 brand lines than bring in a billion dollars each in annual revenue. Contributing to this revenue is the establishment as a multinational enterprise in countries such as China. Success doesn't come easy through the battles of foreign legal systems, political risks, and maintaining satisfied stakeholders in a foreign country comes with many challenges. PepsiCo has had much success in China with their appeal to the youth and social programs that give back to society. These programs have created what seem to be a long lasting relationship and a upper hand in the soda wars in Asia.

PepsiCo generates $60 billion in net revenues in retail sales as one of the world's largest food and beverage brands and a top rated Fortune 500 Corporation. They sell a lot more than just Pepsi, including 22 product lines such as Quaker, Tropicana, Gatorade, SoBe, and Frito-Lay to name a few. PepsiCo product line brands give it a competitive advantage with each generating more than a $1 billion in sales. PepsiCo has the ability to capture enormous cross-selling opportunities. Many times a consumer will buy a snack and then also a refreshing beverage. This allows PepsiCo to capitalize on this trend with the type of products they provide. PepsiCo has made growth in renovating its beverage lineup to healthier alternatives as well as snacks that has boosted its sales in line with their Global Nutrition division. PepsiCo is a global community based in over 200 countries. One of these countries includes China, which voted PepsiCo as one of their top employers in 2013. For this scholarly activity I will focus on PepsiCo's efforts there.
Market and Legal Systems
Before 1978, China operated on a command type market system that is favored by communist countries and was the market system used by the former Soviet Union. A true command market system offers benefits such as similar quality of life, and no inflation due to government price controls. The drawbacks are it provides limited product selections, needs are determined without comparison to society needs, and restricts personal freedoms.
After 1978, China began to move from a command Soviet-style economy to more of a free market system. A free market system is driven by the goal of profit determined by demand while the government keeps more of a distance role. This transition has led to China quadrupling its gross domestic product in twenty years and the second largest economy in the world. Even though this decentralization has done wonders for their economy there is sometimes conflict with a still highly centralized political system and mixed legal system.

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