Threat of Substitutes – High Since many of the Pepsi products do not have a unique flavor, many companies have the capability to reproduce the many different variations of the Pepsi product without infringing on any copyright violations. The potential for these threats come in the aspect of substitute pricing. Using lesser quality ingredients as well as lower quality assurance standards from oversea corporations allow competitors of generic brand soft drinks to reduce prices in order to compete with the big-name brands such as Pepsi and Coke.
PEST
The PEST analysis discusses the Political, Economic, Socio-Cultural, and Technological factors in the corporate setting that can be used to categorize and mitigate opportunities and threats ("PEST," n.d.).
Political Factors One of the most critical elements with PepsiCo operating in a foreign market is the host nation government itself. Political stability in the region of sales remains one of the most important factors in the marketing of Pepsi’s products. Additionally, government sanctions and initiatives towards unhealthy soft drinks will bring reason for concern when it comes selling products and maintaining profitability in a foreign country. Economic Factors The profitability of PepsiCo has a direct correlation to the economy for which it is doing business in. One of the most important factors in this portion of the analysis is the economic stability in the country for which Pepsi is selling in. For example, in