ECONOMIC ENVIRONMENT OF

BUSINESS
PROJECT
MMS-I (Sem- 2)
CHANAKYA BATCH
2008-09
DATE- 19/03/2009

SUBMITTED TO:
Ms. GITANJALI KAPOOR
 GROUP
MEMBERS
.

Names Roll Nos

IZHAR MUSHRIF C-15
ANU PILLAI C-28
ANANDITA SINGH C-34
SOURABH SURYAVANSHI C-35
AMIT JAIN C- 44
• PEPSICO IS A WORLD LEADER IN
CONVENIENT SNACKS, FOODS AND
BEVERAGES.
HISTORY OF PEPSICO

Pepsi-cola & frito-lay.

Merger of two companies in 1890.
• Herman Lay - chairman of the board of
directors of the new company.
• Donald M. Kendall - president and chief
executive officer.
• The new formed company reported sales
of $510 million and has 19,000 employees.
Mission:
Mission
• To be the world's premier consumer
products company focused on convenient
foods and beverages.
• Growth and enrichment to our employees,
our business partners and the communities
in which we operate.
Vision:
Vision
• "Pepsico's responsibility is to continually
improve all aspects of the world in which
they operate – environment, social,
economic – creating a better tomorrow than
today."
 INDUSTRIAL OVERVIEW
• C.E.O. Of Pepsico :- Indra K. Nooyi
• Fortune 500 rank: 59 (previous:
63)
• Oligopoly.
• In US 3,000 companies which
manufacture & distribute
beverages.
• Pepsico entered India in 1989
COLDRINKS

JUiCEs
SNACKS
 HUMAN
RESOURC
E
• People are greatest strength.
• Goals are to attract, hire, develop and
retain the most talented people.
• Expanding Opportunities Through
Diversity and Inclusion
To understand the needs of international
and diverse markets.
 To continually evolve culture.
 In US, it includes African Americans,
Latinos/Hispanics, Asians, Native
Americans, Women, and Enable, for
individuals with disabilities.
• Occupational Health and Safety –

Safe and healthy workplace - a basic human right

• PepsiCo Human Rights Workplace Policy -

 Respects the dignity of workers in the workplace.

 Fair wages, benefits and other conditions of

employment.
 No use of child labor.
 No discrimination – equal opportunities for all
associates.
 Comply with all applicable laws, regulations, and
other employment standards.
• Speak Up
To promote high ethical standards and open
communication across a global organization.
• HIV/AIDS 
Committed to make a significant contribution to
the fight against this, and to assist employees
and family members affected by it.
• Employee Benefit Programs
Comprehensive benefits packages -
designed to address the health
care and financial needs of
employees, both now and into
retirement.
• Awards
Employee Learning and
Development
• Pepsico University
• Robust program for
helping associates manage
their careers.
• 360-degree feedback
process
• In 2007, introduced a
concept called "One
Simple Thing,“- strives to
help associates better
balance work and home.
• All employees receive
regular performance and
career development
reviews annually.
 ECONOMIC
ENVIRONMENT
 Micro - Economic
• Factors close to the company that affect its ability
to serve its customers.
 Customers
* Offers consumers a range of
products, from treats to healthy
eats.
* Gives consumers choices across
the spectrum.
* Playing a responsible role in
health and wellness by
encouraging people to adopt
healthy, active lifestyles.
* World-class scientists.
* Continuously Introduces new
food and beverage products that
offer nutrition benefits.
* Reformulating some of their
 Market Intermediaries
• Retailers and bottlers.
• PepsiCo commissions retail
customer surveys that measure
customer satisfaction.
• Target setting and strategic
planning.
• Highest level of service .
• Works closely to assure that
feedback is understood and
addressed as quickly as possible.
 Suppliers
• Diversity and inclusion.
• Developing partnerships with
minority-owned and women-owned
suppliers to build the world-class
supplier.
• Creates mutually beneficial
relationships that expand PepsiCo's
sphere of activity.
• Builds community infrastructure by
providing employment, training.
• Give opportunities to qualified
minority and women suppliers a
chance to succeed.
 Competitors
The competition is very high in
this industry-
• Currently ranks 2nd in
branded food and beverage
manufacturers in the world,
by net sales, trailing only
Nestleviii.
• Ranks 2nd in carbonated
beverages, trailing only Coca-
Colaviii.
• In total beverage sales in the
US they rank 1st with about
25% of the market share.
Market Share in U.S.
 MACRO - ECONOMICS
Macroeconomics is a branch of
economics that deals with the
performance, structure, and
behavior of a national or regional
economy as a whole
The Company’s Macro -
economics
 PepsiCo Environmental Policy

“PepsiCo’s responsibility
is to continually
improve all aspects of
the world in which we
operate –environment,
social and economic –
creating a better
tomorrow than today.”
 ECONOMIC forces
 Shareholders
 Associates
 Retailers
 Suppliers
 Governments
 Technology
SOCIAL ENVIRONMENT
 TECHNOLOGICAL
ENVIRONMENT
• PepsiCo has leveraged its
knowledge in contract
farming.
• Partnered with the
Government of Punjab to
help farmers for citrus
farming.
• Assured availability of
high end technology
• Established collaborations
for development of
agriculture.
 LEGAL AND TAX
• Meet the local Indian standards (Health
Ministry Standards for carbonated
beverages
• Prevention of Food Adulteration Act (PFA)
directive on the use of water in the
preparation of soft drinks.
• They also comply with Bureau of Indian
Standards (BIS) for packaged drinking
water.
• The ‘One Quality Worldwide’ assurance
seal appears on the entire range of
PepsiCo’s beverages.
• Dispute in name to ownership of pepsi
brand name.
 Financial information
• Market rate of pepsico – 49.25$
• Market valuation – 76490$ million
• Revenue – 39474$ million
• EPS – 3.21 in 2008 ( last year - 3.41)
• DPS – 1.60$ per share
• Net profit margin – 11.9%
• Excise Duty – 32%
OPERATIONAL OVERVIEW
Business vision- making
tomorrow better than today.
Contribute to the country,
consumers, farmers and
people.
Investment - U.S.$1 billion (in
India).
Employment - 150,000 people
including suppliers and
distributors.
43 bottling plants in India.
15 – company owned & 28
franchise owned.
BOTTLING PLANT
 Global operations
• Frito – Lays america

• Frito – Lays international

• Pepsi – Cola North America

• Pepsi - Beverages

• Gatarade – Tropicana North

America
• Quaker foods North America
 DISTRIBUTION
–
Aim of Pepsico
All products in its portfolio within a distance
easily reachable by

–
Distribution Methods
Direct Store Delivery (DSD).
Broker Warehouse System.
Vending & food service system & pre- sell
method.
 DISTRIBUTION CHANNEL
• Supermarkets / retail
stores.
• Fountain / restaurants.
• Convenience stores.
• Vending machines &
other distributing
beverages & snack
foods.
 MARKETING
• Blue and red globe trademark
• Pepsi Challenge - Pepsi-Cola Vs
Coca-Cola.
• In 2007, PepsiCo redesigned their
cans for the fourteenth time.
• More than thirty different
backgrounds on each can,
introducing a new background
every three weeks.
• 2008, Pepsi overhauled their entire
Contd…

• 4th quarter of 2008 Pepsi

teamed up with
Google/Youtube to produce
the first daily
entertainment show on
Youtube for Youtube.

Since 2007, Pepsi, Lay's,

and Gatorade have had a
"Bring Home the Cup"
contest for Canada's
 Brand Ambassador

• Priyanka chopra & Shah Rukh

Khan

• Kareena Kapoor – Kurkure

• Katrina Kaif – Pepsi Slice

 Environmental Policy
– Encourage conservation of natural
resources, recycling, source reduction and
pollution control.
– Establish metrics to monitor environmental
performance.
– Implement environmental management
systems to identify and manage
environmental risks, obligations and
opportunities.
– Work with licensed bottlers, suppliers and
customers to reduce the environmental
impacts of the products.
– Apply sound environmental management
practices where the judgment, existing
legal requirements are insufficient for the
operations.
Water
– Conserving Water in the
Operations.
– Reducing Water Use in
Agriculture.
– Leaving a Positive Footprint on
Society.
China Women's Development
Foundation.
The Earth Institute.
WaterPartners.
Safe Water Network.
Energy
Reducing the Energy Use.
Harnessing Renewable Energy.
Partnering for Change.
Packaging and Solid Waste
Follow five principles of sustainable
packaging design:
Reduce
Reuse
Recycle
Remove
Renew
– Using Less Material in Packaging.
– Reducing and Recycling Waste.
– Solid Waste.
Respect for Employees.
Global Relations.
Health and Safety.
Business Gifts and Entertainment.
Environment.
Political and Community Activities.
Confidential Information and Insider
Trading.
Accounts and Record-Keeping.
Protection and Proper Use of Company
Assets.
Introduction of Pepsi Natural.
Introduction of Pepsi Throwback and Mountain Dew
Throwback.
Set corporation-wide goals to reduce water and energy
consumption by 20% and fuel consumption by 25% by the
year 2015.
Frito-Lay North America will add more than 1,200 fuel
efficient Sprinter vehicles to its nationwide fleet.
conclusion
 SOURCE:

• WEBLIOGRAPHY
– www.pepsico.com
– www.google.com
– www.wikipedia.org