Quality Management in PepsiCo Inc

Introduction

Can people live without sodas? Sure. In fact, people might be safer if they don't drink soft drinks so much. And yet, soft drinks somehow make it to the top of the list of items most often purchased by the average consumer. Why is this, exactly? Well, for one thing, sodas taste great. Kids enjoy sodas because they're cool. Often, they are used as a “treat” by moms. Sodas carry an image with them; an image of a person with a comfortable lifestyle. This case takes a look at the Pepsi Cola company. This paper will delve into a brief history of the Pepsi Company's growth over the years and the effects of competition on Pepsi's strategies in the international and domestic market. This essay will attempt to discuss the effectiveness of Pepsi's marketing strategies and its results.



Factors that Influence the General Environment

Economic Factors

The key elements that constitute principal market risks are interest rates, foreign exchange rate and commodity prices.

Interest rate on PepsiCo's debt as well as it short-term investment portfolio: PepsiCo can manage its overall financing strategies in term of balancing investment opportunities and risks. The company is using interest rate and currency swaps to effectively modify the interest rate in order to reduce the overall borrowing costs (PepsiCo 2009).

Foreign exchange rate and other international economic conditions: Operating in international markets involves exposure to changes in foreign currency rates, which typically affect the economic growth, inflation, interest rate, government actions and other factors. Once these changes occur, they could cause PepsiCo to adjust its financing and operating strategies.

Commodity prices may affect the cost of raw materials: PepsiCo is subject to market risk with respect to commodities because its ability to recover increased costs through higher pricing will be limited by the competitive environment in which it is operating (PepsiCo, 2009).

Technological Factors

Development of additives such as sugarless sweeteners, Splenda, caffeine free products, and new flavorings enables PepsiCo to provide products that meet changing customer tastes and preferences. In addition, computerized manufacturing technologies are great contributions to higher efficiency and quality in bottling operations. For Pepsi, a critical business challenge is ensuring that the distribution processes can deliver the right products to the right place at the right time (PepsiCo, 2009). According to Jerry Gregoire, Vice President, Information Services, “The competitive advantage will go to the company that can apply technology to areas such as logistics, getting costs out of the distribution pipeline and getting products into the stores less expensively while increasing the availability of sales information (Associated Press, 2009).”

Political/Legal Factors

As a food product manufacturer, PepsiCo is under the control of the Food and Drug Administration.

The FDA tests and certifies new ingredients such as high-intensity sweeteners before they are allowed to be used in soft drink production.

(b)Waste Management and Public Concerns: Growing environmental awareness is leading to increasing legislation. The company's operation is affected by federal legislative proposals that minimize the quantity of packaging material entering the nation's solid ...