Globalization Impact On Factors Of Production Business Essay

PepsiCo is a world head in convenient snack foods, foods, and drinks, with earnings of $60 billion and over 285, 000 employees. PepsiCo possesses a few of the world's most popular brands, including Pepsi-Cola, Mountain Dew, Diet Pepsi, Lay's, Doritos, Tropicana, Gatorade, and Quaker. Their brands can be found worldwide through a variety of go-to-market systems, including immediate store delivery (DSD), broker-warehouse, and food service and vending. Headquartered in Purchase, NY, with Research and Development Head office in Valhalla, The Pepsi Cola Company started in 1898 by the NC Pharmacist and Industrialist Caleb Bradham, but it only became known as PepsiCo when it merged with Frito Lay in 1965. Until 1997, it also managed KFC, Pizza Hut, and Taco Bell, but these fast-food restaurants were spun off into Tricon Global Restaurants, now Yum! Brands, Inc. PepsiCo purchased Tropicana in 1998 and Quaker Oats in 2001. In December 2005, PepsiCo surpassed Coca-Cola Company in market value for the very first time in 112 years since both companies started to be competitive.


Globalization is the trend of businesses, technology, or philosophies to spread across the world, or the procedure of making this happen. The global current economic climate is sometimes known as globality, characterized as a completely interconnected marketplace, unhampered by time zones or national restrictions. Proponents think that globalization has the potential to create higher opportunities for expansion across the world, benefiting the developed nations while leveling the playing field everywhere else; competitors of globalization believe that it will only improve the opportunities for the wealthier nations to take good thing about the poorer ones and, furthermore, could get rid of regional variety and lead to a homogenized world culture.

PepsiCo is a consumer products company operating in highly competitive markets and rely on continued demand for his or her products. To create revenues and profits, they need to sell products that charm with their customers and consumers. Any significant changes in consumer choices or any failure on their part to assume or react to such changes could lead to reduced demand because of their products and erosion with their competitive and financial position. The MNC's success depends on their capacity to respond to consumer trends, including concerns of consumers regarding overweight, product capabilities and ingredients. In addition, changes in product category utilization or consumer demographics could cause reduced demand for their products. Consumer choices may shift credited to a variety of factors, like the aging of the general populace, changes in interpersonal styles, changes in travel, holiday or leisure activity habits, weather, negative publicity resulting from regulatory action or litigation against companies in their industry, a downturn in economical conditions or taxes specifically targeting the consumption of their products. These changes may reduce consumers' willingness to purchase their products. Their continuing success is also reliant on their product advancement, including keeping a sturdy pipeline of new products, and the potency of their promotional initiatives and marketing programs. Thus it's noticeable that PepsiCo is facing stiff challenges in its journey towards success but due to its work strategy and managerial experience in the field of Globalization, it's been able to preserve itself and emerge successful. (Globalization, 2003)


In Dubai, PepsiCo has given its only franchise and distributorship to Dubai Refreshments. Dubai Refreshments (DRC) is a landmark in Dubai in more ways than one! Strategically located on interchange number two on the busy Sheikh Zayed Highway, the brand Pepsi is one of the first sights for tourists entering the town. More significant is the actual fact that the company effectively presented the Pepsi selection of products to the UAE and has been doing the same successfully for over 45 years. A broad circulation network of DRC ensures Pepsi products are readily available to customers all over the UAE and the globe. Dubai is a major tourist destination for the entire world mainly because of the variety it provides in conditions of its culture, ethnicity and structures. Due to the climate prevalent in Dubai throughout the year, the presence of a significant MNC such as PepsiCo helps it be even more likely to make its existence sensed there. PepsiCo brings with itself a large variety of products which for some reason or the other suits the tastebuds of the Global community. PepsiCo has been received by the UAE Authorities with open hands due mainly to its less-stringent norms associated with FDI and international trade. UAE has tangled up with various countries to promote free trade across edges, which is a major element in promoting the idea of 'Globalization'. (PepsiDRC, 2007)


Labor (Manpower) is considered a very vital organ of any organizational composition. PepsiCo is not a different. PepsiCo has been a frontrunner in resolving issues related to health and fitness of its employees by giving many fringe advantages to its workforce. It identifies their importance. It doesn't discriminate between gender, caste or faith, which is obvious by the actual fact that the current Chairman and CEO of PepsiCo, Indra K. Nooyi is a female by gender and an Indian by origins. PepsiCo has also been recognized as the top employer of the world for the year 2010. It includes received laureates from throughout the world to be the best place to work in. In Turkey, for example, Forbes magazine identified PepsiCo as the top company "where women could be marketed the fastest. " In Spain, Actualidad Economica known as PepsiCo "one of the best companies that invest in training. " Thus the Work force of PepsiCo in Dubai have nothing to complain about when they are associated with this MNC which puts the eye of its employees as a top priority. (PepsiCo Named a Top Company around the World, 2010)


Off-centering: This is a major issue experienced by many nations throughout the world anticipated to globalization. The MNC's bring with them technology which threaten to remove the use of manpower in its procedure and cause imbalance between capital and manpower. But PepsiCo has been very diligent to this issue and has ensured that technological growth will not have an effect on the work of any employee in the organization. Wherever technology has bought out manpower, PepsiCo has made sure to relocate the manpower to other projects. By this technique, the company benefits in both ways.

Work Expertise: PepsiCo still retains the pattern of socialization of labor to enhance harmony functioning.

International Competition: Although PepsiCo has migrated with time and has tapped cheap labour to enhance outsourcing, they have ensured that the prevailing employees do not have to carry the brunt of this move. The knowledge of local manpower will be higher than that of some other countries in its nation. Thus PepsiCo has acknowledged this factor and guaranteed lower attrition.

Collective Bargaining: PepsiCo has been able to maintain tranquility between employers, employees and trade unions giving a common floor to resolve all differences.

Employment Conditions: Since more than 80% of the population of Dubai is non-nationals, it is obvious they are well educated and therefore the question of the labour being unskilled in an corporation such as PepsiCo doesn't occur by any means. PepsiCo supplies the best working conditions to its employees for which it has received global acceptance. (Effect on Dubai WORK FORCE at Micro, Mesa and Macro Levels, 2007)


Micro: As far as Micro factor is concerned, PepsiCo has the best working environment a worker can ever ask for. The Micro factors include the working conditions inside the company and various issues related to romance between the firm and its own employees. Thus PepsiCo has honored maintaining a acoustics micro environment for its employees.

Meso: This includes the sector which the company runs in. Since PepsiCo is a Food and Drink Company, its motive is to provide the best value product and make it available at an acceptable price so that it can be ahead of its opponents such as Coca-Cola. Because of this, PepsiCo has a very effective marketing team which includes prevailed in projecting an extremely healthy image of the business. Thus it is a innovator in its sector.

Macro: By using the UAE authorities, it is becoming easier for MNC's such as PepsiCo to come and build themselves in this country due to its lenient FDI norms and trading routines. PepsiCo has came back the favour by offering occupations to the folks of Dubai and also increasing the forex reserves of the country. Thus PepsiCo has already established a very positive impact on the macro factors impacting on Dubai Work force.


After studying the various factors responsible for factors of development especially labor, it is visible PepsiCo has been able to overcome the various issues posed by Dubai. PepsiCo has been able to achieve the positives of globalization, that is, lower cost of creation and quality products with a competent work force. Also it has been successful in eradicating the drawbacks associated with globalization, that is, off centering, efficient usage of unskilled labour and identical chance to local employees. By creating careers, PepsiCo has been successful in employing its Corporate Public Responsibility towards the people of Dubai. PepsiCo has enabled the neighborhood companies to buck up and come to conditions with quality products made by MNC's. This healthy competition is beneficial for the clients.

Few recommendations for PepsiCo are:

Introduction of more non-beverage drinks- In order to promote anti-obesity, PepsiCo should lead to more variety in its non- drink section. The market trend is slowly changing towards demand for non-beverage drinks. Because of its competition, Coca Cola, PepsiCo is lagging by quite a distance. It needs to bring about this change quickly.

Lower Expenditure on Brand Ambassadors- PepsiCo must check the total amount it's spending on brand ambassadors. If this expenditure is controlled, the profits of the business will increase many folds.

Integration- For the brand as large as PepsiCo, sky is the limit. It should start focusing on backward and forward integration of its products. This can help the company to achieve economies of size and increase the quality of these existing products. It should look to connect up with major food bones of countries it has entered. This will likely itself promote the company and the brand. (Shreshtha, 2010)

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