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Ashford University ( BUS 357) Analyzing the Financial Situation

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An Analysis of the Financial Viability of PepsiCo in the International Environment  Pepsi surpasses Coca-Cola in the United Kingdom because Coca-Cola has been exiled. Because of this, PepsiCo ha ... s an 80% share of the $1 billion Saudi soft-drink market (Bailey, 2019).  Saudi Arabia is the third largest foreign market of Pepsi, after Mexico and Canada. The environment makes the country very favorable to soft-drink sales because alcohol is banned and the climate is very hot and dry. The Effects of Instability in the Foreign Currency Markets  PepsiCo has a competitive advantage of worldwide distribution, and the company is able to produce all its products in the country where they are consumed.  Due to the instability in the foreign currency markets, PepsiCo is exposed to foreign exchange risks in the international markets in which its products are made, manufactured, distributed, or sold (PepsiCo, 2020, p. 45). The Effects of Instability in the Foreign Currency Markets According to PepsiCo (2020), the instability in foreign currency markets “forces it to use various interest rates, such as cross-currency rate swaps, cross-currency interest rate swaps, Treasury locks, and swap locks to manage its overall interest expense and foreign exchange risk (p. 46). PepsiCo’s operating environments are threatened with new or increased tariffs, sanctions, or other impositions due to the effects of volatile economics, politics, social conditions, civil unrest, and currency controls, and exchange rate fluctuations (PepsiCo, 2020, p. 46) [Show More]

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