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Globalization Impact On Factors Of Production Business Essay

PepsiCo is a universe leader in convenient bites, nutrients, and drinks, with grosss of $ 60 billion and over 285,000 employees. PepsiCo owns some of the universe ‘s most popular trade names, including Pepsi-Cola, Mountain Dew, Diet Pepsi, Lay ‘s, Doritos, Tropicana, Gatorade, and Quaker. Their trade names are available worldwide through a assortment of go-to-market systems, including direct shop bringing ( DSD ) , broker-warehouse, and nutrient service and peddling. Headquartered in Purchase, New York, with Research and Development Headquarters in Valhalla, The Pepsi Cola Company began in 1898 by a NC Pharmacist and Industrialist Caleb Bradham, but it merely became known as PepsiCo when it merged with Frito Lay in 1965. Until 1997, it besides owned KFC, Pizza Hut, and Taco Bell, but these fast-food eating houses 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 first clip in 112 old ages since both companies began to vie.


Globalization is the inclination of concerns, engineerings, or doctrines to distribute throughout the universe, or the procedure of doing this happen. The planetary economic system is sometimes referred to as globality, characterized as a wholly interrelated market place, unhampered by clip zones or national boundaries. Advocates believe that globalisation has the possible to make greater chances for growing throughout the universe, profiting the developed states while leveling the playing field everyplace else ; oppositions of globalisation believe that it will simply increase the chances for the wealthier states to take advantage of the poorer 1s and, moreover, could eliminate regional diverseness and lead to a homogenised universe civilization.

PepsiCo is a consumer merchandises company runing in extremely competitory markets and rely on continued demand for their merchandises. To bring forth grosss and net incomes, they must sell merchandises that appeal to their clients and to consumers. Any important alterations in consumer penchants or any inability on their portion to expect or respond to such alterations could ensue in decreased demand for their merchandises and eroding of their competitory and fiscal place. The MNC ‘s success depends on their ability to react to consumer tendencies, including concerns of consumers sing fleshiness, merchandise properties and ingredients. In add-on, alterations in merchandise class ingestion or consumer demographics could ensue in decreased demand for their merchandises. Consumer penchants may switch due to a assortment of factors, including the ripening of the general population, alterations in societal tendencies, alterations in travel, holiday or leisure activity forms, conditions, negative promotion ensuing from regulative action or judicial proceeding against companies in their industry, a downswing in economic conditions or revenue enhancements specifically aiming the ingestion of their merchandises. Any of these alterations may cut down consumers ‘ willingness to buy their merchandises. Their continued success is besides dependent on their merchandise invention, including keeping a robust grapevine of new merchandises, and the effectivity of their advertisement runs and selling plans. Thus it ‘s apparent that PepsiCo is confronting stiff challenges in its way towards success but due to its work methodological analysis and managerial expertness in the field of Globalization, it ‘s been able to prolong itself and emerge a victor. ( Globalization, 2003 )


In Dubai, PepsiCo has given its exclusive franchise and distributorship to Dubai Refreshments. Dubai Refreshments ( DRC ) is a landmark in Dubai in more ways than one! Strategically located on interchange figure two on the busy Sheikh Zayed Highway, the trade name Pepsi is one of the first sights for visitants come ining the metropolis. More important is the fact that the company efficaciously introduced the Pepsi scope of merchandises to the UAE and has been making the same successfully for over 45 old ages. A broad distribution web of DRC ensures Pepsi merchandises are readily available to clients all over the UAE and the universe. Dubai is a major tourer finish for the universe chiefly because of the assortment it offers in footings of its civilization, ethnicity and architecture. Due to the conditions conditions prevalent in Dubai throughout the twelvemonth, the presence of a major MNC such as PepsiCo makes it even more disposed to do its presence felt at that place. PepsiCo brings with itself a big assortment of merchandises which in some manner or the other suits the gustatory sensation buds of the Global community. PepsiCo has been received by the UAE Government with unfastened weaponries chiefly due to its less-stringent norms associating to FDI and international trade. UAE has tied up with assorted states to advance free trade across boundary lines, which is a major factor in advancing the construct of ‘Globalization ‘ . ( PepsiDRC, 2007 )


Labor ( Manpower ) is considered a really critical organ of any organisational construction. PepsiCo is no different. PepsiCo has been a frontrunner in work outing issues related to health of its employees by giving many periphery benefits to its work force. It recognizes their importance. It does n’t know apart between gender, caste or faith, which is apparent by the fact that the current Chairman and CEO of PepsiCo, Indra K. Nooyi is a adult female by gender and an Indian by beginning. PepsiCo has besides been recognized as the top employer of the universe for the twelvemonth 2010. It has received laureates from across the Earth for being the best topographic point to work in. In Turkey, for illustration, Forbes magazine recognized PepsiCo as the top company “ where adult females could be promoted the fastest. ” In Spain, Actualidad Economica named PepsiCo “ one of the best companies that invest in preparation. ” Thus the Labor force of PepsiCo in Dubai have nil to kick about when they ‘ve been associated with such an MNC which puts the involvement of its employees as a top precedence. ( PepsiCo Recognized as a Top Employer around the World, 2010 )


Off-centering: This is a major issue faced by many states across the Earth due to globalisation. The MNC ‘s bring with them engineering which threaten to take the usage of work force in its operation and cause instability between capital and work force. But PepsiCo has been really persevering to this issue and has made certain that technological promotion will non impact the occupation of any employee in the organisation. Wherever engineering has taken over manpower, PepsiCo has made certain to relocate the work force to other undertakings. By this method, the company benefits in both ways.

Work Specialization: PepsiCo still maintains the tendency of socialisation of labour to heighten harmoniousness in operation.

International Competition: Although PepsiCo has moved with clip and has tapped cheap labor to heighten outsourcing, it has ensured that the bing employees do non hold to bear the brunt of this move. The cognition of local work force will ever be higher than that of some other states in its ain state. Therefore PepsiCo has acknowledged this factor and ensured lower abrasion.

Corporate Bargaining: PepsiCo has been able to keep harmoniousness between employers, employees and trade brotherhoods by giving a common land to work out all differences.

Employment Conditionss: Since more than 80 % of the population of Dubai is non-nationals, it is apparent that they are good educated and therefore the inquiry of the labor being unskilled in an organisation such as PepsiCo does n’t originate at all. PepsiCo provides the best on the job conditions to its employees for which it has received planetary acknowledgment. ( Impact on Dubai Labor Force at Micro, Mesa and Macro Levels, 2007 )


Micro: Equally far as Micro factor is concerned, PepsiCo has the best working environment an employee can of all time inquire for. The Micro factors include the on the job conditions inside the house and assorted issues related to relationship between the house and its employees. Therefore PepsiCo has adhered to keeping a sound micro environment for its employees.

Meso: This includes the sector which the company operates in. Since PepsiCo is a Food and Beverage Company, its motivation is to supply the best quality merchandise and do it available at a sensible monetary value so that it can be in front of its rivals such as Coca-Cola. For this, PepsiCo has a really effectual selling squad which has been successful in projecting a really healthy image of the company. Thus it is a leader in its sector.

Macros: With the aid of the UAE authorities, it has become easier for MNC ‘s such as PepsiCo to come and set up themselves in this state due to its indulgent FDI norms and trading patterns. PepsiCo has returned the favour by offering employment chances to the people of Dubai and besides increasing the foreign exchange militias of the state. Therefore PepsiCo has had a really positive impact on the macro factors impacting Dubai Labor force.


After analyzing the assorted factors responsible for factors of production particularly labour, it is apparent PepsiCo has been able to get the better of the assorted challenges posed by Dubai. PepsiCo has been able to accomplish the pros of globalisation, that is, lower cost of production and quality merchandises with an efficient work force. Besides it has been successful in eliminating the cons associated with globalisation, that is, away focus oning, efficient use of unskilled labor and equal chance to local employees. By making occupations, PepsiCo has been successful in implementing its Corporate Social Responsibility towards the people of Dubai. PepsiCo has enabled the local companies to buck up and come to footings with quality merchandises made by MNC ‘s. This healthy competition is good for the clients.

Few recommendations for PepsiCo are:

Introduction of more non-beverage drinks- In order to advance anti-obesity, PepsiCo should convey about more assortment in its non- drink subdivision. The market tendency is easy changing towards demand for non-beverage drinks. In position of its rival, Coca Cola, PepsiCo is dawdling by a long manner. It needs to convey about this alteration rapidly.

Lower Outgo on Brand Ambassadors- PepsiCo needs to look into the sum it ‘s passing on trade name embassadors. If this outgo is controlled, the net incomes of the company will increase many creases.

Integration- For a trade name every bit large as PepsiCo, sky is the bound. It should get down concentrating on backward and forward integrating of its merchandises. This will assist the company to accomplish economic systems of graduated table and better the quality of their existing merchandises. It should look to bind up with major nutrient articulations of states it has entered. This will itself advance the company and the trade name. ( Shreshtha, 2010 )

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