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External Analysis Paper

1496 Words6 Pages

The following external analysis will be conducted on a single division of PepsiCo Inc., Frito Lay. I will examine the individual elements of PESTEL, Porter’s Five Forces, consider complementors, and determine the overall industry attractiveness. Political: Political, pertains to how laws and regulations affect and restrict business transactions, privacy rights, trademarks, labeling, and merchandise content. (Jay B. Barney, 2012). The snack food industry, like many other industries, is providing services to customers on online platforms. Frito Lay’s online platform outlines the terms of service available to consumers and acts as a digital contract between the two parties (Frito Lay, 2016). With the increasing popularity of online purchasing, …show more content…

Demography categorizes a society into groups such as age, gender, income, and ethnicity (Jay B. Barney, 2012). There are several additional ways a society can be categorized, but industries must understand the importance and influence of each group. Although stringent immigration policies inhibit migration, in 2010 the United States had 42.8 million foreign-born residents. Large numbers of immigrates have traditionally come from Mexico, although with the newest policies issued, this may change. Mark A Wynne predicts that by eliminating all migration barriers GDP could increase by 67 to 147 percent (Berridge, 2016). From a demographic standpoint, industries need to recognize the impact of a growing Hispanic population and the implications this growth is likely to have on the snack food …show more content…

They have thirty-one snack food brands under the Frito Lay division. A majority of the brands under Frito Lay are savory, chip based products. As previously mentioned throughout this report, snack foods incorporate a large variety of foods. On Walmart’s online ordering service, under the search category “snack foods” returned three hundred results (Walmart, n.d.). Some of the snack foods that were listed did belong to the Frito Lay brand, however, many did not. Substitutes for chip base snacks could include dried and packaged fruits, fruit snacks, energy bars, protein bars, granola bars yogurts, individually packaged pastries, candies, candy bars, crackers, nuts, and an assortment of other on the go, convenient foods. Due to the large number of substitutes and alternative snack foods, the threat of substitutes is

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The brand PepsiCo segments are separated into 2 products – food and beverage. Its Frito-Lay North America segment offers Lays potato chips, Doritos tortilla chips, Cheetos cheese-flavored snacks, Tostitos tortilla chips, branded dips, Ruffles potato chips, Fritos corn chips, and Santitas tortilla chips. 1 In addition, the company also is part of the Quaker Foods Company which is comprised of various rice cakes, oatmeal,

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Porter’s Five Forces model Porter’s Five Forces model is a simple and yet effective tool used for analyzing the level of competition in industry. It helps to analyze how the business itself is positioned relative to its competition and its competitive strength. Porter’s Five Forces analysis is useful in understanding the competitive market in a given industry. It involves looking through internal competition, barriers for the new entrants, bargaining power of buyers and suppliers, and substitutes for the goods. High changes in the consumer taste and preferences for gluten free and organic food and increase in supermarkets and convenience products lead to major innovation.

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Secondly, Porter’s Five Forces Model is used to analyse the level of rivalry in the market, the attractiveness for potential new entrants, the power of suppliers, the power of buyers and the threat of substitution. This will allow us to see a holistic view of the industry in the market environment. Thirdly, the PESTLE framework is used to analyse the factors within the macro environment that are influencing

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