Tyshee Jackson
Week 2 Assignment Milestone 1
Econ 230 Macroeconomics
March 26, 2022
The Company I decided to pick during the course of this assignment is Pepsi. Pepsi was originally created and developed in 1893. Pepsi can be found any where and has the ability to reach a range of all ages from around the world. There are many advantages fand disadvantages in major companies. Pepsi is also no stranger to this concept. There Mission statement is “to provide consumers around the world with delicious, affordable, convenient and complementary foods and beverages from wholesome breakfasts to healthy and fun day time snacks and beverages to evening treats.”
The first question I would like to address is if Pepsi has a comparative advantage over its rivals? One competitive advantage is Pepsi strategy in marketing. Pepsi can create spontaneous themes and compelling advertisements that grab people’s attention. Another advantage is their DSD which stands for their direct store delivery. Pepsi directly supplies a lot of stores and business their products which is and advantage to their overall exposure. The more visibility they have the better their advantage is to be chosen over other companies (Dhar, Chavas). Another great advantage is Pepsi global alliances which helps them be recognized globally. Big companies that support and have gained partnerships with Pepsi gives them a regional advantage. Lastly, I would consider Pepsi diverse portfolio of food and drink. The more the add to their brands the better exposure for Pepsi to advance pass some of their rivals.
The supply and demand for Pepsi can be very interesting. Pepsi supply and demand seems to be self-explanatory in most cases. The supply will easily increase as the cost of Pepsi begins to increase as well. One thing many do not recognize is that when Pepsi prices go up the company has an tendency to supply more to mee the need. When something like this takes place is causes the supply curve to start to produce positively. Supply for Pepsi has everything to do with them staying in the right price range in order to overtake the competitors.
The demand for Pepsi is also just as important as the supply for the company. The demand is the price that a consumer is willing to pay to buy the particular product. Pepsi like other companies if the prices begin to go up the demand for the product will normally go down. The demand is a key part to increase the sales and traffic for Pepsi products (Tabassum,Umer). The fact that Pepsi is in a consumer market it is very competitive and overall has to be strategic in the strategies to produce a positive curve in the supply and demand.
The GDP for a company is defined as the Gross Domestic Product. Pepsi GDP for 2020 was more than 70 billion in U.S. dollars. With the company bringing over 70 billion in revenue it is important to the economy and the market in which it is a part of. Pepsi added to their GDP by understanding the effects of working in the local communities. The added value of being in local neighborhood has a direct impact on the revenue and the visibility which increases sales.
Pepsi GDP has a great impact on many different areas. For example, economic growth is impacted by Pepsi because they have given back to many foreign countries to help them develop and grow their economy. Another great example is Pepsi ability to drive attention through advertisement to support the growth of business, states, cities, and even countries. Pepsi has the ability to effect investments due to their GDP (Kish, Riskey). People will want to invest to a company that is flourishing and has the ability to create no products for consumers. Pepsi happens to do both of these factors with excellence for example different flavor Pepsi, coming up with different taste to Frito lays, etc. all of these factors help investors make investment back into the stocks of the company. Therefore I believe that peps is company’s profitability is an asset to the economic growth and stability we see today.
Cited Sources
1. Dhar, T., Chavas, J., Cotterill, R. W., & Gould, B. W. (2005). An econometric analysis of brand-level strategic pricing between coca-cola company and PepsiCo. Journal of Economics & Management Strategy, 14(4), 905-931. https://doi.org/10.1111/j.1530-9134.2005.00087.x
2. Tabassum, S., Umer, J., Rauf, S., Shafiq, A., & Qurat u lain Ayaz. (2014). MERGER AND ACQUISITION of PEPSI co ON THE BASIS OF FINANCIAL ANALYSIS. International Journal of Innovation and Applied Studies, 9(3), 1079.
3. Kish, P., Riskey, D. R., & Kerin, R. A. (2001). Measurement and tracking of brand equity in the global marketplace - the PepsiCo experience. International Marketing Review, 18(1), 91-96. https://doi.org/10.1108/02651330110382014