Macro Environment Pepsi - Case Study Example

The major factors of social and political organization within the vastly diverse population are language, religion, and caste. The economy of India is the fourth-largest in the world as gauged by purchasing power parity (PPP), with a GDP of US $3.36 trillion. When measured in USD exchange-rate terms, it is the tenth-largest in the world, with a GDP of US $692 billion (2004). (Kapoor, pp 3-5) India was the second-fastest emergent major economy in the world, with a GDP growth rate of 8.1% by the end of the first quarter of 2005-2006.

Nevertheless, India's massive population results in a comparatively low per capita income of $3,100 at PPP and is classified as a developing nation. For most of its independent history, India has adhered to a socialist-inspired approach, with stringent government control over private sector participation, foreign trade, and foreign direct investment. Since the late 1980s, India has slowly opened up its markets through economic reforms by decreasing government controls on foreign trade and investment.

The privatization of public-owned industries and opening up of certain sectors to private and foreign players has advanced slowly in the midst of political debate. India has a workforce of 496.4 million of which agriculture forms 61% of it, industry 18%, and services 22%. The unemployment rate is at 9%. Agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes; cattle, water buffalo, sheep, goats, poultry, and fish. Major industries include textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, and machinery.

Over the last 10 or so years, India has also capitalized on its huge number of highly educated people who are fluent in the English language to become a vital location for global companies outsourcing customer service and technical support call centers. It is also the main exporter of skillful workers in software services, financial services, and software engineers. India's key trading partners are the United States, the European Union, Japan, China, and the United Arab Emirates.The standard of living in India is continuously improving and beverages play a very important role in the lives of Indians.

Consuming soft drinks with a fast food meal is a common practice in the country. The single most common factor which is used to measure the standard of living in the per capita purchasing power parity (PPP) adjusted gross domestic product (GDP). In 2003, the per capita PPP allocated GDP for India was US$ 3100. These statistics can be compared to $32,000 for the USA, $4,800 for China and roughly $26,000 for most western European countries. With one of the most rapidly growing economies in the world, clocked at an average growth rate of 7% between 2000-2003, India is swift on way to becoming a large and globally important consumer economy.

(Kapoor, p -4)The Indian middle class, touted to be anywhere between 100 and 300 million depending on the data used, is rapidly getting used to the Western consumer lifestyle. Despite massive inequalities, the standard of living of the average Indian is gradually but certainly rising and, if existing trends continue, will grow to be around one third that of the developed world (in PPP dollars) by the middle of the 21st century.