INTERNAL AND EXTERNAL STAKEHOLDER ANALYSIS

EXECUTIVE SUMMARY

 Pepsi Zimbabwe is a beverage company operating in Zimbabwe

 For great success, the interests of the stakeholders must be satisfied, regardless of
their financial stake
 A stakeholder matrix has been built following stakeholder analysis.
 Latent, Promoters, Apathetic and Defenders stakeholders were identified based on
their influence over business operations and decision-making as well as their business
interests.
 This analysis was then compared to the analysis of a firm named
 Differences in stakeholder identification and their interested influence are reported.
These distinctions include the function of the media, the power, and interests of the
government, as well as competing interests that belong to employees and managers.

1.0 INTRODUCTION

The financial return to shareholders has been a recent management focus for the businesses.
However, the stakeholder theory, as stated by Gerretti, (2016, p. 524) contends that all
stakeholder interests must be met regardless of the financial stake Each party member's needs
must be recognized and practically satisfied. As a means of optimizing the company value, it
is crucial for the organization to consider all stakeholder issues. A result, the management of
any company must identify the important stakeholders and ascertain their problems
(Barkay,2019 p. 37). The expanding social concerns of business have also made a significant
contribution to the success of the stakeholder approach, which concentrates on all internal
business factors as well as the larger social framework in which all activities take place. This
report makes it simpler for management to foresee any potential problems, secure the
necessary backing from key stakeholders, and enhance the products and services the business
provides to its target markets.
2.0 BACKGROUND OF THE STUDY

Caleb Bradham created Pepsi at his drugstore in New Bern, North Carolina, where it was first
sold, under the name "Brad's Drink," in 1893. In 1898, the drink's name was changed to
Pepsi-Cola, which is pronounced similarly to Pepsi and is derived from the Greek words.
PepsiCo is also one of the most valuable brands in the world. In 2016 a Pepsi subsidiary was
opened in Zimbabwe. Since then, Pepsi Zimbabwe is now one of the leading soft drink
makers, in Zimbabwe.

According to Machingauta (2020. P.26.), Zimbabwe only accounts for 4.5% of the market for
soft drinks in the Southern African Development Community. The three major players- Pepsi
Zimbabwe, Schweppes, and Delta dominate the Zimbabwean soft drink market. By volume,
Pepsi-Zimbabwe, the market leader, maintains a 75.1 percent market share, followed by
Coca-Cola (16.5 percent) and Schweppes (8.4 percent). Supermarket and hypermarket outlets
account for 49% of the market for soft drinks in Zimbabwe, with online trade accounting for
13% of the market and independent retailers accounting for 38%. (Manish, 2019.p 11).

The market for soft drinks in Zimbabwe achieved $6.1 million in total revenue in 2021,
which represents a three-year compound annual growth rate of 3.5 percent . Pepsi Zimbabwe
grew turnover by approximately 37 percent in 2018. In the same year, it reached nearly
US$14 million. The company generated 53 percent of the revenue from its external
distributors. Since it had yielded positive outcomes, the trend toward using external
distributors is likely to continue. (V-Jay. 2020 p.7) Some of the main drivers of recent growth
have been brand extensions and a constantly growing distribution network. In addition, the
development of diet and flavoured soft drink options, as well as increased availability of soft
drinks, all contributed to this extraordinary expansion. Sales of carbonates were the most
profitable segment of the Zimbabwean soft drink market in 2019, bringing in a total of $2.9
million, or 67.8% of the market's total value. (Das 2020 p.3) By the end of 2025, the market
will be worth $5 million if it continues to grow at the current rate.

According to Collin (2021 p.3) by the end of 2025, the market volume is anticipated to
increase to 5513 million litters. In Zim-trade Fair 2018 it led in volume and value of
carbonates, and Ready to Drink, drinks. Globally in the categories of functional drinks
and specialty beverages for Africa, it was the second-best performing subsidiary. Also, in
terms of bottled water, it was first in Zimbabwe. However, some investors’ confidence of the
company's potential for future growth has been harmed by the company’s failure to cope with
covid 19 effects, political instability, and the company’s failure to deal with macroeconomics
in the country. During the start of the year, the business struggled with the problems revealed
by this study. People wonder if Pepsi Zimbabwe no longer has its sparkle and whether the
real thing will ever come back. This report's objectives are to analyse the internal and external
stakeholders, appraise the available resources, propose a course of action, and offer tactical
recommendation on how Pepsi must deal with its stakeholder for the greatness of the
company

3.0 ORGANIZATIONAL STRUCTURE

Employees are grouped based on knowledge, skill, and action; this helps in the creation of
functional departments. Functions performed by numerous departments are solely performed
by these functional departments, which are also known as functional areas (Sharma, 2017 p
37.). Human Resources, Finance, Marketing, Engineering, Logistics Distribution, Business
Intelligence Systems, and Production are the functional areas that PepsiCo Zimbabwe has
recognized (PepsiCo, 2021. p 7) In January 2022, Pepsi Zimbabwe restructured its
geographical operating segments. These market divisions are the most noticeable aspect of
PepsiCo's corporate structure. Sparkling beverages, still beverages, and developing brands are
the three main business segments.

4.0 STAKEHOLDER ANALYSIS AND MAPPING

According to the definition provided by the father of stakeholder theory, a stakeholder is any
group or person that can have an impact on or be impacted by an organization's actions and
the accomplishment of its goals (Freeman, 2020. p 19.). There are two types of stakeholders
Internal and external Stakeholders. Internal stakeholders are the group or individuals who
work within the firm for good outcomes any other fall under the category of external. Pepsi
Zimbabwe’s main stakeholders identified were grouped in table below:

Table 1

Internal Stakeholders External Stakeholders

Employees Communities
Investors Suppliers
Leadership Line Government
Managers Consumers
4.1 Stakeholder Matrix

A stakeholder matrix is a way to organize the stakeholders based on their interests and
power/influence. According to Chokera et al. (2020 p 27.), it is an approach used to
differentiate different stakeholders (2019).

Latents-High Power, Low Interest Keep them Promoters -Key players in decision making with
Satsfied- They can be very beneficial if they -High Influence, HighInterest- However they  
are persuaded that the company's conduct  require careful management becuase they
would help it achieve its goals and be for the can have a negative impact:
greater good. Need to be informed and
convinced :
Consumers and Customers
Employees Employees
Government Managers
Communities

Stakeholder
Matrix
Defenders- Low Influence, High Interest- Just keep
Apathetic with Low Influence, Low Interest- them informed no special treatment
Must be monitoredbecause they may become a
part of communities and fall under other
classifications. They can be very beneficial if they
are persuaded that the company's conduct would
help it achieve its goals and be for the greater
good. Community
Media Online Influencers
Suppliers

Grid 1.1

4.1.0 Internal Stakeholder

Employees

As of 2019, Pepsi Zimbabwe employed around 800 workers across a variety of functional
areas. (PepsiCo, 2019.p 6.). The workers are genuine people who assist in achieving the main
goals of the business and complete the necessary tasks. Therefore, a company's relationship
with its employees has a significant impact on its performance. Their involvement with the
business has a significant impact on decision-making. Additionally, it was suggested that
contemporary workplaces needed to give workers psychological empowerment (Edna
&Laura, 2019. p 37.). These theories lead to the conclusion that the employees are promoters.
However as stated from the theory, conflicting interests may arise between employees as a
result of the gig economy's promotion of job switching (Gandini, 2019). Employees can
therefore be kept in High Power and Low Interest situations as well. 

Shareholders

As they put money, time, and other resources directly into the company, shareholders have a
direct relationship to its success. They take part in decision-making, and the business
encourages them to frequently assess their communication channels. They have high power
and interest in the business. They fall into the group of Promoters as well. Annual
shareholder meetings and in-person meetings are held on a frequent basis to keep them
satisfied (Chivar, 2019. p 16).

Managers

Area managers, different team leaders, supervisors, and personnel with a focus on leadership
are all considered managers. As they describe the process of determining whether a new
policy will be implemented across the various locations of a company, these individuals have
high power and high influence in decision-making. They establish a connection between
workers and businesses and have significant influence. They fit into the Promoter group.
Managers can have both negative and positive effects because they have direct control over
decision-making and are related to employees (Jamabo, 2017. p 11).

Leadership Line

The board of directors and different chief operational officers make up the chain of
command. As major decision-makers, they have high interest in the company's success.
These individuals (Promoters) are powerful and highly interested since they stand to gain the
most. These individuals make all modifications, policies, and other significant decisions.

4.1.1External Stakeholders

Consumers and Customers

Pepsi Zimbabwe sells its products through e commerce channels, distributor networks direct
store delivery, customer warehouse and retailers. The company conducts business both in
business-to-business and business-to-consumer networks, and all these distribution networks
are regarded as customers and customers. This sector has high interest and high power
because this segment makes up the major business tiers (Promoters). Since the company is
investing in new product development and healthier food options in response to consumer
demand, consumers indirectly affect decision-making. Additionally, unsatisfied customers
can hurt a company's revenue streams and market value. Customers' interests are so
conflicting and can be classified as latents as well.

Suppliers

Sugar is the primary raw material utilized by the company, so these suppliers must make sure
all the raw materials are available to help the company meet the demand in the market.
Suppliers may fall into the "High Power, Low Influence" category (Latents) since the raw
material supply is under the suppliers' control, however not involved in decision-making.
According to Porter's Five Forces, suppliers' bargaining power is a key business factor, and if
it increases, the company may be in danger or if the power is stronger, it causes threats (Lao
et al.,2021). They must constantly feel satisfied.

Communities

These include community organizations, businesses, and non-profit NGOs that are affected
directly or indirectly by the company's goals or actions. Most importantly, the business must
set goals or align its objectives so that communities share an interest in the company's success
and future. The success or failure of a business isn't really important to this segment, though,
it may have an impact on how decisions are made. Consequently, it is classified as High
Power and Low Interest. Latents.

Media

The role of the media in a company's communication strategy is crucial for getting the
message transmitted to the targeted group. They assist in sharing the company’s perspectives
and views with targeted audience. According to some reports, media increases stakeholder
participation via a variety of tools, including web sites, social media etc (Chokera &
Mugwati, 2019. p 23.). Media has a lot of power because they are a crucial part of getting the
information to the right people. According to Drack (2019.p 15) the media has a bias against
good news and frequently reports tragedies rather than success stories. This indicates that
they have little interest (Latents). In addition, firms may attract the attention of the media due
to sponsorships, gifts, and investments this results in having high interest, Promoters as a
result (Spilly, 2019. P 13).

Government

The government creates the political and legal environment in which the business operates.
The government is in charge of drafting a variety of voluntary and involuntary policies that
are passed in the form of judicial rulings, bills, acts, regulations, laws, and other means.
Policies relating to pricing, and other policies connected to waste management are a few of
them. The business operates in the food industry, so it must abide by all applicable local,
state, federal, and international laws. The government places a priority on formulating laws
that will improve the public's health and safety. As a result, the government is considered to
be Latents because no laws favour any particular company.

5.0 COMPARISONS WITH ANOTHER COMPANY

The company that had been chosen for analysing dissimilarities in stakeholders and mapping
is Misfort Tax Consultant a company that deals with accounting advisory services and tax.

5.1 Internal comparisons

According to Collin (2021.p.21) shareholders, directors, department heads, associates,

employees, and team leaders were listed as the internal stakeholders by the Misfort Tax
Consultant. There is a noticeable difference in the identification process of business partners
all because the Misofort Tax Consultant is not internationally and has a small number of
operations. Since Pepsi Zimbabwe's operations are in numerous nations both external and
local partners are present as well, this gives difference again. since the director and
stockholders are covered under different titles. However, Directors and Shareholders have
been categorized in two different headings at Misfort Tax Consultant. Also, on employees
who are also thought to be subject to some persuasion and interest, there was a difference
again because employees didn’t have more influence. Employees, however, have more
influence and a larger interest at Pepsi Zimbabwe. The same finding was confirmed by a
study, which found a significant relationship between employee power and affective
commitment, and that employee affective commitment is influenced by employee power
(Himouri et al., 2015.p. 37).
5.2 External Comparison

Misfort Tax Consultancy identified society, suppliers, creditors, government, and clients as
its external stakeholders with some of Pepsi Zimbabwe’s stakeholders like media and
communities not mentioned yet these players are essential. Given the size of Pepsi-
Zimbabwe, it is crucial for the firm to comprehend the role of media in its operations.
However, media is not of importance to Misfort because they don’t operate on a bigger scale.
Furthermore, while discussing external stakeholders, Pepsi Zimbabwe considers the multiple
distribution networks it manages, However the same is not true for Misfort Tax Consultant,
as its service assessors are not included among the essential stakeholders.
Telecommunications providers are classified as high power because it is obvious that if
service is not supplied, the business may not function; as a result, both have low interest.
Once more, if the same scenario were to be considered from PepsiCo's perspective, creditors
would also be highly interested because of the company's positive brand reputation. The same
debtors may also be referred to as company partners or internal stakeholders. (Tafirenyika et
al., 2019).

Furthermore, PepsiCo is subject to tight government control, unlike the aforementioned

company, which is not the case. The government might support the operation of the firm and
show some interest because the company is owned by Zim-Locals and there Zimbabweans
empowerment The study conducted for Chinese companies by Zhian et al. (2018), Supports
the claim which states that governmental policies and economic performance hold
importance for state-owned companies. PepsiCo is an exception to this rule.

6.0 CONCLUSION

According to the stakeholder analysis above, identification of stakeholders may differ

depending on the organizational business coverage and geographical regions. It was noted
that the chosen companies were national with competing interests from those of the local
businesses. Therefore, depending on the stakeholder's position and obligations as described,
interest and influence within the company changes. According to Chambira, (2021 P17),
Companies should develop a variety of communication strategies based on the impact and
interests of the stakeholders.
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