Business Case

Description of the multinational firm: introduction and overview of the firm:

PepsiCo is one of the well-known global food and beverage Brand Company around the world. It produces and sells various kind of beverages and foods which generates over billions of dollars in retail sales. PepsiCo is made up to five core brands: Pepsi, Tropicana, Frito Lay, Gatorade and Quaker. PepsiCo distribute its products in over 200 countries. The company’s headquarter located in New York and PepsiCo employ over 200,000 people. In 2007, Indri K. Noyil became the CEO of PepsiCo. Over the years, PepsiCo received many kinds of awards and recognitions in term of its product, and achieved the rank of 25th of the best global brand.

As for the future development of PepsiCo, Pepsi announces plans to invest 5 billion in Mexico in 2014. The investment is mainly focused on the innovation and brand building, infrastructure, Agriculture. So, this investment expected to generate 4,000 new jobs for the local people. From the past, PepsiCo earlier relationship with Mexico in a successful way, it is one of the key country of PepsiCo to growth globally. In recent years, PepsiCo is invest aggressively in Mexico to strengthen its presence in emerging markets, whereas in 2012, 35% of revenue of PepsiCo. (Pepsi, 2014)

Overseas expansion

a) Motivations

There are two motivations for PepsiCo to expand to overseas which consist of traditional and emerging motivations. Traditional motivations that used by PepsiCo are resource seeking and market seeking. According to Kaye (2013), PepsiCo is known as one of the top leading company that working with their suppliers. The company has been putting huge efforts to maintain and improve the relationship between the company and its suppliers. PepsiCo has done very well in resource seeking to secure their supplies and exploit factor cost difference.

Besides that, PepsiCo outsource their plants to other countries that supply cheap labours. By hiring cheap labours, the company is able to lower their cost in order to gain the competitive advantages in the market. According to Son (2014), PepsiCo has outsourced to India and also enter the market and eventually outsourcing helps in growing PepsiCo in India because it lowers their production costs such as labour and shipping costs.

Other than that, another motivation that used by PepsiCo is emerging motivations which consist of competitive positioning and global scanning. According to The Saylor Foundation (2012), the biggest competitor of PepsiCo, which is Coca Cola, globalized its brand to the worldwide in the early 1900’s and became very successful. As PepsiCo is in the competitive positioning, they need global operations such as globalizing to pre-empt their competitors in order to expand their market and sustain its