Business Environment Analysis: PepsiCo, Functions, and Macro Factors

This report provides a comprehensive analysis of PepsiCo's business environment, encompassing various aspects such as organizational types, sizes, and scopes, with a focus on public, private, and voluntary sectors. The report delves into the interrelation of different organizational functions within PepsiCo, emphasizing the importance of departments like R&D, marketing, and finance. It further examines the positive and negative impacts of the macro environment, including political, economic, and technological factors, on business operations. An internal and external analysis is conducted, highlighting PepsiCo's strengths, weaknesses, and their relationship with external macro factors. The report also explores stakeholder analysis, considering customers, employees, governments, and capitalists. The analysis utilizes specific examples from PepsiCo, NHS and National Trust to illustrate key concepts.

BUSINESS
&
BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Various types, size and scope of organisations.................................................................3
P2. Size and Scope of different types of organisations..........................................................5
TASK 2............................................................................................................................................7
P3 Relationship between different organizational functions..................................................7
TASK 3............................................................................................................................................9
P4 Positive and negative impacts of macro environment upon business operations.............9
TASK 4..........................................................................................................................................10
P5 Internal and external analysis with strength and weakness.............................................10
P6 Inter-relation of strengths and weakness with external macro factors............................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment is essential element for every kind of organisation either it can be a
large, middle and small (Business environment,2018.). It include physical evidence, employees,
process these are the internal but government, political factors, legal, technological changes,
economical factors etc. that affects overall profitability and success of the firm.
Pepsi Co, is an multinational brand who deals in manufacturing, marketing, and
distribution of grain based snacks, food, beverages, and other product. Today is one of the
leading beverage brand in UK with a market share of around 55 % market share and around 6.6
million people who are consuming its products and services.
This project will explain various types, scope and size of firms. Further it will explain
relationship between various functions of an organization and explains impact of internal and
external factors on business activities. Moreover, it will determine relationship between the
strength and weakness of firm with its macro factors.
TASK 1
P1 Various types, size and scope of organisations
Organizations regardless of there form or type, contributes in nation's economy by being
a major source of employment generator for the country. During its initialization phase, a firm
has to take crucial decisions related to its sole purpose behind undertaking business operations
i.e. whether to earn profits or to not for profit which further shapes it mission, vision and goals.
Mentioned below are the major three categories namely public , private and voluntary sectors:
Public Sector: These are the organizations whose operations and activities are owned
and managed by the government and are established to provide products and services in
accordance with the demands and requirements of population at affordable prices irrespective of
profits or income generation. Its handles its business on basis of polices, procedures, guidelines
etc. that are implemented by government to access regulation over its activities. Public company
is one of the largest source of employment generation as it requires huge workforce to conduct
and handle its various activities. The National Health Service is the largest self owned public
limited national healthcare system for UK. It is indulge in providing healthcare

services529501575 comprising emergency treatment , 529501575treatment of infectious diseases
etc. without charging from any patient.
Purpose: The main objective of public limited firms is to of contribute in the economic
growth and development and enhancing living standard of the people of a nation. Public limited
firms follows holistic approach to the welfare of its citizens by providing them with immense
employment opportunities, by raising their standard of living by giving them with basis
essentials of life at affordable prices and many other social benefits ((Cassell and Blake, 2012).
Private Sector: Private companies forms that part of a nation's economy where in
products ad services are manufactured and developed as per customer's requirements to earn
higher outcomes These firms are either self owned or managed by group of individuals without
any government interference in their business activities. However they are required to follow
guidelines, rules and regulations that are incorporated by the government for the firms. Another
peculiar feature of these organizations is that they have well defined vision, mission and
objectives. PepsiCo is an American brand which deals with a wide range of food and beverages.
It was established in 1898, with its headquarters in Purchase, New York. It is the largest brand in
terms of revenues generated by it which is around $43.3 billion and second largest food and
beverages company with its operations in more than 200 nations across the world.
Purpose: The main objective of a public limited firm is to generate higher profits by
offering products and services as per its target audience requirements so that it induces them to
make a purchase which will lead to maximum output and higher sales volumes for a firm.
Voluntary Sector: These are the associations that is created by a single or group of
individuals who are having some common interests,motives and drivers to contribute or to
provide benefits to society (Cavalcante and et. al., 2011). It undertakes redressing major social
problems and improves life of its members without any profit motive and requires no legal
formalities to be adhere by firm in carrying out its business. The funds for its day to day
operations and for other business activities are contributed by its members only in addition to
that other sources includes charity, donations, government aids and subsidies. National Trust is
one such non profit organization that strives with the objective to preserve cultural heritage of a
specific region and to conserve natural beauty. It was established in 1989 with is headquarters
in Massachusetts, USA.

Purpose: Major areas of working of National Trust is by preserving cultural an environmental
preservation for a particular nation.
Legal structure of the sector
Private sector:- It is basically of two types:- Sole proprietorship:- Sole proprietorship is a company that is owned and handle by a
single individual who managed all its activities. He is the one responsible for planning,
designing and formulating all process, policies and plans and receives all profits
generated and is accountable for all debts and losses.
 Partnership:- Partnership is generally amalgamation of two or more individuals or a joint
venture between two or more firms to sign partnership deed that clearly declares their
profit sharing and capital ratios.
Public sector:- Mentioned below are government bodies covered under this:- Central government:- This body of government is liable for managing and regulating
business activities at both state and local government levels. State government:-Firms that comes under state interference are abide by to follow all
legislations that are enforced by government (Cronan and et. al., 2011)
 Local government:- Local government in generic manner deals in goods and services
that provides numerous benefits to its people besides conducting activities for the social
welfare of individuals.
P2. Size and Scope of different types of organisations
One of the basic criteria of segregating firms in to various types are according to its
manpower requirements, its scope which determines size of an organization and various
locations where in it has its operations running along with its vision and mission statements.
Size and scope of National Health Service, Pepsi Co and National Trust are mentioned below:-
National Health Service- NHS is a publicly funded organization which is the largest self
owned healthcare system providing health services including emergency treatment, treating
infectious diseases,ophthalmology and other medical care services absolutely free.
Size: NHS has around 1.187 million employees that makes it worlds 5th largest
employment generating firm around the globe. 8% of total UK population uses private insurance
provided by NHS.

Scope: NHS provides full critical and non critical medical care without excepting
payments other than certain specific ones. It provides medical facilities like eye tests, dental care,
prescription etc. free of cost to vulnerable or low income patients. Also it provides services like
long term health care ,in- patient care, primary care and so on. It is largely funded from general
taxation, being under the direct control of government who is responsible for NHS (Welter and
Smallbone, 2011).
Vision: “ To deliver better health, better care and better value”
Mission: “To provide quality of care to every person every day”
Pepsi Co
Pepsi Co is world's second largest beverages and soft drinks private brand having 21%
share of world market and 29% in US. It has its operations in more than 200 countries
generating a revenue of around US$6.525 billion in 2017
Size: Pepsi Co is the leading multinational brand for food, snacks and d beverages which
employees a proficient team of around 264,000 who efficiently handles its operation in more
than 200 nations.
Scope: Being one of world's leading consumer product firm which offers 22 Brands in
beverages and foods comprising various salty , sweet snacks, carbonated and non carbonated
drinks like Diet Pepsi, Miranda, Tropic ans, Cheetos etc.
Objective: Pepsi Co is working towards improving its performance in its three focus
areas- products, planet and people which its strives to achieve by 2025. Under this agenda
company is working on developing more nutritious products, replenishes its annual water
consumption and expand its sustainable farming initiatives by 34% with the aim of empowering
6 million women and girls by investing in local communities.
Vision: “ “to deliver top-tier financial performance over the long term by integrating
sustainability into our business strategy, leaving a positive imprint on society and the
environment.”
Mission: “We are committed to investing in our people, our company and the
communities where we operate to help position the company for long-term, sustainable growth.”
National Trust: It is non profit organization that preserves and protect historic places
and culture of a particular region. It owes over 350 properties including many historic houses,
gardens, monuments and other social historic sites (Elliot, 2011).

Size: Being one of the largest UK charities , National trust employees around 5899
employees and around 62000 volunteers that provides funds for the company to acquire around
247000 hectares of land at many beautiful sites.
Scope :National Trust protects over 700 miles of coastline and around 617500 acres of
countrysides, beaches and moorland.
Vision: “To create a world in which cultural heritage: its preservation, celebration and
protection”.
Mission: “To protect the places which represent cultural experience with help of public
support.”
Shareholder Analysis: Stakeholder analysis involves collecting and analysing quantitative
data for the purpose of identifying its stakeholders that are to be kept in mind while
implementing a program and policy by an organization. Pepsi stakeholders that contribute
various efforts in operations of Pepsi Co involves customers, employees, governments, capitalist
etc. For this, business categorises its stakeholders on mentioned below types:
 High power – fascinated people: It is very important for company to engage these
stakeholders and do efforts to increase their level of interest.
 Low power – less fascinated people: These stakeholders are known as key people of
company and they engage in business activities on continuous basis.
 High power – less fascinated people: Individuals who come in this category are
communicate with generate communication which consists website, emails and
newsletter.
 Low power – fascinated people: These stakeholders are known as the potential supporter
of company and they keep informed.
TASK 2
P3 Relationship between different organizational functions
Pepsi CO being world's second leading food and beverages corporation manufactures ,
promote and distributes around 22 items of its products comprising grain based snacks,
beverages and others. Being a market leader with a team of 264,000 proficient employees, it
maintains and enhance its operations in around 200 countries around the world. Thus, to remain
in the lead and to meet requirements of its customers Pepsico has to cope up with fast changing
business dynamics and introduce necessary modifications and innovations in its products to

ensure its success (Hall, 2011). For achieving this objective, it is of utmost importance for Pepsi
Co to work in close coordination with its other departments. It will help company to maintain
efficiency of its operations by making all its employees work in one direction without
encountering any role or responsibilities conflicts among. This will help firm to achieve its
targets of high quality products at lower cost which generates maximum returns. Interrelation of
various departments of Pepsi Co are mentioned below:
 Research and development: R&D department plays a critical part in growth and
sustainability of Pepsi Co as it provides firm with a detailed research report about the
consumers taste and preferences, rivals strategies, , market scenario etc. This helps Pepsi
Co to make necessary changes in its present product line and products by experimenting
with new ingredient or flavors that could attract its customers to try new products. R&D
division works close with finance department who prepares budgets and provides funds
that are requisite to carry out its market research functions. (Kaufmann and et. al.,
2011). Human resource department: Pepsi being a global brand requires proficient employees
working at various levels. Thus, HR department hires candidates having appropriate
interpersonal other skills that are capable in providing customers satisfaction by
effectively communicating benefits of using company products and adding value to it.
Thus, HR unit assists marketing division to have proficient workforce who can provide
customer satisfaction by assisting them in handling their queries. Production department: Production department of Pepsi Co deals with producing varied
products with high quality which meet the requirements of its customers. It works with I
coordination other divisions in order to take various decisions related to distribution and
marketing. Marketing department: This department use different communication tools to inform
target audience about the company’s products and services and also influence them to
buy the same. PepsiCo use different tools to promote its products in order to achieve its
sales target and to generate large number of profit. Accounting and finance: Main responsibility of this depart met to is to identify the need
of funds require by different department to execute their operations. Finance manager
prepare budget for different department, it is very essential that there should be proper

coordination of finance department with other department of enterprise so they can get
proper fund to perform their activities.
Organizational structure Pepsi Co
Pepsi Co being a global brand is quiet adaptive in its organizational structure aspect. It cons as
continuously seeks out improvement in its operations and keep on introducing new products in
market place as per its customers demands. Pepsi Co has a decentralized organizational structure,
with operational decisions made by separate units that are being governed and controlled by
policies at corporate level.
 Pepsi Co consists of three units: Pepsi Co Americas Foods comprising Frito- Lay,
Quaker and all Latin American food and snack.
 Pepsi Co Americas Beverages including global Pepsi-Cola North America, Gatorade,
Tropicana, and all Latin American beverage business operations.
 Pepsi Co International which is responsible for Pepsi Co business in Europe, Asia, and
Africa.
Other type of organization structure are as follows:
 Functional organisation structure: This type of organisation structure divide the company
based on specialty. This type of structure has a marketing, customer services, sales
department and may more. Clear roles and responsibilities of employees is one of the
biggest strength of this organisation structure.
 Divisional organisation structure: This refer to the organisation which is divided as per
the different project and products.
 Matrix organisation structure: This organisation structure is more confusing as in this, an
employees have multiple bosses. Feature of this organisation structure is that there is
more flexibility with balanced decision making.
TASK 3
P4 Positive and negative impacts of macro environment upon business operations.
PESTLE
Analysis
Description Positive effects Negative impact

Political Political factors involves
policies, laws, rules and
political stability etc. that are
enforced by government of a
particular country. PepsiCo
being a global brand is subject
to adhered various legislations
of different countries it is
having its operations running
(Lee and et. al., 2012)
Emerging developing
economies like India as
well as economies like US
and Canada that have
positively stable political
conditions provides Pepsi
Co various growth
opportunities.
On the other hand
initiatives taken by
various government
against artificial
sweetened carbonated
drinks and
implementation of
sodas tax had resulted
in drop in sales
volume Pepsi by 26%
in 2016
Economic
al
Wages, exchange rate, living
standard of people, growth
rate, salaries, etc. presented in
a nation's economy forms its
economic factors. A company
thus require to keep a close
watch on inflation, foreign tax
and exchange rates so that it
can maintain its profitability
by timely arranging required
funds.
Pepsico has higher
expansion opportunities in
stable economies like US
wherein even the growth
rates are high that will
definitely provide firm with
ease of diversification.
In Venezuela Pepsi
encounter decrease in
sale by 0.4% due to its
inability to exchange
local currency.
Social CSR forms the utmost
responsibility of many firm in
today's time that helps in
building positive brand value.
PepsiCo is dedicated towards
providing safest, best and
highest quality foods and
beverage to its customers to
Pepsi Co has taken
advantage of busy
scheduled of people where
in it offers ready to eat
products to them leading to
increase in its sales
volumes.
n US and UK with
sudden decrease in
soda consumption by
people due to health
consciousness. It is
also seemed that
bottled water
consumption has seen

capture market share as per
ISO standards.
sudden enactment
leading to water
takeover sugary
drinks.
Technolog
ical
It refers to introduction and
adoption of latest technology
by a firm to improve and
enhance its profitability and
market share and have an
edge over its rivals.
With growing acceptance
of digital bots, 3D printing
and other technology
mobile technology and e-
commerce has presented a
great opportunist to Pepsi
co to directly communicate
with its customers on more
personalized level.
Company looking forward
to launch online grocery
store (López-Gamero and
et. al., 2011)
With emerging
changes in
technology Pepsi
requires proficient
employees having
professional
knowledge to handle
new technological
changes.
TASK 4
P5 Internal and external analysis with strength and weakness
STRENGTH
 Second largest leading food and
beverage brand in the world having
operations in 200 nations
 Maintains a good product portfolio
offering around 100 different brands in
22 product segments generating
revenues around US$1 billion dollars in
2017
 Pepsico having large market share is
WEAKNESSES
 With emergence of close competitors
like Coca Cola, Pepsico have to face cut
throat competition as customers can
switch brands quickly
 With people becoming health conscious
soft drinks are perceived as unshapely
choice
 Pepsi-co only offer foods and beverages
products that's not sufficient . Thus

able to satisfy its customers by
providing y every type of beverage and
snacks
 Pepsico has an efficient R&D
department that helps company to
innovate new products leading to
enhancing its product portfolio.
company needs to diversify its business
 Pepsi-co advertisements lacked in
displaying value addition in its products
unlike its leading competitor Coca Cola
(Onetti and et. al., 2012).
OPPORTUNITIES
 Pepsi-co should introduce more
healthier products like Diet Pepsi
which contains less sugar, carbos etc.
This will help to attract potential
customers who are looking for a
healthy aerated drink.
 It should diversify its product line by
exploring various other market
segments (Teece, 2012)
 Product innovation like new 7UP
which uses Stevia as sugar substitute
making it more healthier option. Thus,
Pepsi need to focus more on healthier
drinks.
 Rivals like paper boat which is
available in various flavours give neck
to neck competition to Pepsi.
Therefore, it should also come up with
various favour variants.
THREAT
 Immense competition with Coca Cola,
Nestle , Kraft Foods etc.
 Pepsi-co basically offers soft drinks
which is considered as unhealthy

P6 Inter-relation of strengths and weakness with external macro factors.
Business is greatly influenced by different external factors that are requisite to be
analysed in order generate positive outcomes. Inter relation of macro environment with strengths
and weakness discussed in detail below :
Political- Any changes emerging in political stability, tax rate or any other political
factors that is concerned with a specific nation in which Pepsi Co is having its business
operations is subjected to have an effect on its profitability and performance. This is pertaining to
the fact that Pepsi Co needs to adhere by certain legal formalities and is likeable to take several
permission related to its project, infrastructure, operations etc. from the government. Strengths- PepsiCo being multinational brand is required to continuously make
necessary changes in its strategies and policies as per the changes introduce by the
government of that country. Political stability in the area in which company operate or
want to operate help company to execute all its operations in effective manner and all this
results in accomplishment of business objectives. in its policies, strategies, plans and operations in reference with the legislation enforced
by government of specific country (Owusuand and Habiyakare, 2011). This so has helped
Pepsi Co in maintaining its large market share in around 200 nations worldwide.
 Weaknesses- In 2016, Pepsi was not able to cope up with when government of US
implemented soda tax Pepsi Co suffer decrease in its sales volumes by 26%
Economical- It is of utmost importance for a global brand like Pepsi to carefully studies
all the economic factors like customers income, sources of funds available, inflation rate etc. to
maintain and enhance its growth and success. Strengths- US and UK both being strong economy provides Pepsi Co opportunity for its
business diversification and growth and to capture potential market share. Weaknesses- In 2016, Pepsi due to inability to cope up with decrease in its exchange rate
encounter reduction in its sales volume by 0.4%
Social- Pepsi Co being customer centric company try to adhere by its CSR by aiming at
providing quality, safe and best food and beverages to its customers so as to maintain its market
position. Strengths- Pepsi segregates household bio degradable waste and converts it into organic
manure under its Pepsi Co Solid Waste Management Program.

 Weaknesses- Pepsi offers soft drinks and fast food that is considered unhealthy for
people to consume (Palo and TähtinenSaleem, 2017).
CONCLUSION
From the above discussion, it is clear that business runs in societal and to compete with
various factors and it is essential to adopt changes which are significant for growth. As changes
are taking place very frequently, so it is important to adopt them by analysing market. There are
different types of association which varies from their size, scope, type, etc. As there are many
activities which are significant for growth in business, so it is essential to work in team. There is
close connection between departments of company. PESTLE and SWOT are two techniques
which help to know about strong and weak points of business.

REFERENCES
Books and Journal
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