Econ 230 Milestone 1

Pepsi Cola, a Global Leader in convenient foods and beverages. It was created two years behind Coca Cola, and the two have remained economic rivals since their creation. PepsiCo products are enjoyed by consumers one billion times a day in more than 200 countries and territories around the world (World Economic Forum).

Does the company have a comparative advantage over its rivals?

Pepsi is one of the largest international brand name beverage companies across the globe. They were created in a pharmacy like Coca-Cola just two short years behind them in New Bern, North Carolina (the birthplace of Pepsi-Cola) (Sievers, 2020). They were not considered a beverage rival until a few years later but that was short-lived, the Great Depression caused them to file bankruptcy twice (Sievers, 2020). Pepsi's number one rival is Coke. Both are well-known brand names, but Pepsi only dominates in North America vice Coke dominates globally. Pepsi has a strong brand equity position (Levin, 2022). In the past five years, Coke has gained 22.13% of market shares, while Pepsi has gained 49.20%. Pepsi also had a higher revenue at $65 billion, while Coke was at about half the amount with $32 billion (Sievers, 2020).

Explain the supply and demand for its key product or service.

There are several factors that affect the supply and demand of Pepsi-Cola as with any popular brand-named beverage such as the cost of the supplies (sugar, substitute sweeteners, bottling plant). There are several substitutes for off-brand beverages produced today but Pepsi and Coke are household brands with a large client base. With roots dating back to 1898, PepsiCo Beverages North America (PBNA) is one of the largest beverage companies in North America today, generating more than $22 billion in net revenue in 2020. that they will comparatively not outsell Coca-Cola. Pepsi has partnered with other local brands such as Frito lay

Provide the GDP of its home country and a key market (country).

The US is the largest economic country followed by Canada and Mexico (Statistics Times, 2021). North America where dominates the market with convenient foods and beverages. Despite being an international brand-named company, Coke does significantly better internationally with the many beverage choices that they provide.

How do fluctuations in GDP, economic growth, investments, and patents affect the company’s profitability?

Pepsi has introduced Pepsi+. They are investing in our future. The future of this planet and having a positive impact on communities. PepsiCo sources crops of over 7 million acres of farmland in 60 different countries (Laguarta, 2022). They are introducing more effective ways to be more environmentally safe while continuing to roll out their same quality products. Also, partnering with emerging brands in the fast-growing energy and value-added protein categories.

References

(n.d.). Retrieved from Peps-Cola Company: https://www.pepsico.com/who-we-are/about-pepsico

Laguarta, R. (2022). Pepsico. Retrieved from 2022 Sustainability Report: https://www.pepsico.com/our-impact/sustainability/sustainability-report

Levin. (2022, January 23). Wood Ward Avenue. Retrieved from What Gives Pepsi a Competitive Advantage: https://woodwardavenue.org/what-gives-pepsi-a-competitive-advantage/#7

Sievers, C. (2020, February 23). Pinckney Marketing. Retrieved from Pepsi or Coke? An In-Depth Look at Decades of Marketing Rivalry: https://pinckneymarketing.com/coke-vs-pepsi-rivalry/

Statistics Times. (2021, October 7). Retrieved from https://statisticstimes.com/economy/north-american-countries-by-gdp.php