Issues in financial stability- INTERNATIONAL BUSINESS (PEPSICO. Case Study) E-Business Business model canvasBusiness Planning (PASTA FACTORY)

Abstract

In recent years, Government Reserves have policed interest rates to safeguard economic stability. Governments around the globe must regulate economies during economic recoveries or transition reform periods to make sure that there is continued growth. Reduced interest rates are one of the mechanisms applied by governments as it increases the investment and lending capacity.

The reserve usually drives down interest rates by purchasing government bonds. Investment and consumption are further encouraged by lowering interest rates (Claessens, Coleman & Donnelly 2018). Interest rates mean the price paid to the banks as a share of money loaned to customers after a certain time. This is important, as it helps banks to make money from the sums invested by customers and is their main source of revenue. Research proves that a bank’s profitability is consequently affected by the fluctuation in interest rates (Basten & Mariathasan 2018).

In the last two decades, rapid technological advances have influenced the financial industry enormously. This is evident when we consider the rise of Big Technology (BigTech) and Financial Technology companies, as indicated by(Tanda & Schena 2019). Perhaps some of the most notable of the major BigTech firms, are Google, Facebook, Alibaba, Amazon, and Tencent.

In this paper I seek to explore the correlation between low interest rates on the performance of banks and their financial stability. Moreover, it intends to explore the position of Fintechs and BigTechs and its relation to the financial industry’s stability. Finally, I will be considering the effects of the Covid-19 pandemic in relation to banks and their financial stability. The world-famous PepsiCo brand is a market leader in foods, snacks, and drinks. The company owns some of the most internationally recognized brands, such as Pepsi-Cola, Tropicana, Diet Pepsi, Doritos, Mountain Dew, Gatorade, Lay’s, and Quaker (Annual report, 2018). Pepsi has established itself in new markets, particularly within foreign countries. The company has also developed and formed joint ventures to expand its line of products to root beers and teas. With its headquartered in New York, the Pepsi Cola Company launched operations in 1898 by a North Carolina industrialist and pharmacist, Caleb Bradham. However, in 1965 following its merger with Frito Lays, it then became PepsiCo.(Aguirre,2013). Following its expansion policy, PepsiCo went on to purchase Tropicana in 1998 as well as Quaker Oats in 2001. PepsiCo beat Coca-Cola in market value in 2005, a first in the companies’ history of over 112 years. (Silvano,2019). PepsiCo focused on growth and continuing diversity whilst facing competition in both the food and beverage industries. PepsiCo is the world’s second largest beverage producer and is the leading company in the food (salty snack) division for Frito Lay. PepsiCo originally extended its production from Pepsi, a cola beverage, to water (Aquafina). It further diversified from Quaker Oats in the snack and cereal, to introducing energy drinks such as Gatorade (Kumar, 2013). PepsiCo operates through a distribution network which enables its brands to be available internationally. This includes through a broker-warehouse, direct store delivery (DSD), retailing, and food services. (Gunaratne,2016). PEPSICO’s Activities and the International Business Environment will be discussed in this paper. The organizational structure, economic and political factors as well as the value chain they provide will also be studied. I will consider the impact that trade ware and Covid19 has on PepsiCo, and finally I will provide a conclusion and suggestion. Small to Medium Enterprise (SME) companies are usually less concentrated on strategy and long-term development, with a heavier focus on daily survival. Their natural life cycle leads to a