PepsiCo PESTEL Analysis
Changes in external environment might affect organizational performance in direct and indirect manners; therefore they need to be taken into account in strategic planning. PepsiCo PESTEL analysis can be highlighted as the most appropriate strategic analytical tool for specifying and categorizing external factors impacting businesses.
Political Factors
Government stability in the USA and other countries selling PepsiCo products is a major political factor for the company. PepsiCo is also impacted by bureaucracy, trade unions, corruption, home market lobbying, the freedom of press and a range of other political factors either directly or indirectly.
PepsiCo actively attempts to influence political factors to benefit its business via its lobbying initiatives. As it is illustrated in figure below, the amount of money PepsiCo spends annually for lobbying has increased more than six-fold during the last ten years to reach USD 4.47 million in 2015. PepsiCo uses a set of lobbying firms such as Russell Group, FTI Government Affairs, Duberstein Group and Covington and Burling[1] to secure its interests via political channels.
PepsiCo’s annual lobbying budget[2]
Economic Factors
Economic factors impacting PepsiCo include rise of inflation and unemployment in the USA. Rising prices of raw materials have to be mentioned as another significant economic factor. Additionally, changes in income levels of current and perspective PepsiCo consumers can be highlighted as a substantial economic factor that impacts the business.
Strong USD against other major world currencies is one of the most significant economic factors directly impacting the amount of profit reported by PepsiCo. For example, in quarter 1, 2016, PepsiCo’s total sales declined by 3 per cent to USD 11.86 billion, the sixth straight quarter of decline partially caused by a strong dollar.[3]…
PepsiCo Inc. Report contains the full discussion of PepsiCo PESTEL analysis. The report also illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on PepsiCo. Moreover, the report contains analysis of PepsiCo’s marketing strategy, its leadership and organizational structure and discusses the issues of corporate social responsibility.
[3] Swamynathan, Y. (2016) “PepsiCo benefits from cost cuts, strong North America snack sales” Reuters, Available at: http://www.reuters.com/article/us-pepsi-results-idUSKCN0XF14D
[1] OpenSecrets.org. (2016) Available at: https://www.opensecrets.org/lobby/clientsum.php?id=D000000200