Академический Документы
Профессиональный Документы
Культура Документы
ON PEPSI CO COMPANY
• GROUP (7)
• Mr P Rajarajan MBA/003
• Dr M I Siraj MBA/010
• Mr C David MBA/014
• Mr HRC Sampath PDM/004
• Ms Moh Moh Lwin PDM/006
CONTENTS
1. Company Profile
2. Product Profile
3. Organizational Structure
a. Environmental Scanning
b. Formulation of Strategies
c. Implementation ( Both Successful and
Failure stories)
d. Evaluation
4. Summary
(1) Company Profile
PepsiCo is a global food and beverage corporation
based in New York.
Founded in 1965.
“Performance with
Purpose”
MISSION
As one of the largest food and beverage
companies in the world, our mission is to provide
consumers around the world with delicious,
affordable, convenient and complementary foods
and beverages from wholesome breakfasts to
healthy and fun daytime snacks and beverages to
evening treats.
PepsiCo companies
1.Pepsi-Cola
2.Gatorade
3.Quaker
4.Frito Lay
5.Tropicana
2. PRODUCT PROFILE
1. Pepsi-Cola Brands, Pepsi ,Caffeine Free
Pepsi, Diet Pepsi etc ( Series of Pepsi)
2. Frito Lay Brands, Lay's potato chips ,
Lays Kettle Cooked potato chips, Wavy
Lay's potato chips, Baked Lay's potato
crisps ,etc
3. Gatorade Brands, Gatorade X-Factor
Thirst Quencher, Gatorade Fierce Thirst
Quencher, Propel Fitness Water
4. Tropicana Brands, Tropicana Pure
Premium juices, Tropicana Twister juice
drinks, Tropicana Smoothies, Tropicana
Pure Tropics juices.
5. Quaker Brands, Quaker Oatmeal, Quaker
Instant Oatmeal, Quaker Oatmeal
Breakfast Squares, Cap‘n Crunch cereal,
Life cereal
3. ORGANIZATIONAL STRUCTURE
PepsiCo has come a long way from Pepsi
being its primary product and source of
revenue.
The company has four units:
PepsiCo Americas Food (PAF)
PepsiCo Americas Beverages (PAB)
PepsiCo Europe
PepsiCo Asia
These four business units handle the
company's business endeavours in
different regions of the world.
Environmental Scanning
ENVIRONMENTAL SCANNING
Internal Environment
Resources
Structure
Culture
External Environment
Task Environment
Industry Analysis- PORTER’s 5 Forces Model
Societal Environment
PESTEL Analysis
INTERNAL ENVIRONMENT
STRENGTHS
1. Strong brand equity
2. Well-known worldwide
3. Innovating company – Strong top management
4. Ethical, socially responsible, and sustainable
company
5. Strong advertising company with more than 40
slogans and songs
6. PepsiCo as the largest part of the market share after
Coca-Cola
7. PepsiCo owns a wide variety of smaller brands
which able them to offer a large product range from
beverages to snacks.
8. Invest more on R & D
WEAKNESSES
1. PepsiCo production is really expansive because
of the need to constantly develop new products
to meet the changing customers demands
2. PepsiCo is experiencing a lack of focus towards
Pepsi sodas
3. PepsiCo is experiencing product recalls
4. PepsiCo has a low employment productivity and
a weak distribution
5. PepsiCo depends too much on the US market
6. PepsiCo is far behind Coca-Cola in the
international market
IFAS TABLE
Internal 1 to 4 1 to 4
Strengths
Strong brand equity 0.12 4 0.48 4 0.48
Well known worldwide 0.06 3 0.18 4 0.24
PepsiCo owns a wide variety of smaller brands which able them to offer a large product
range from beverages to snacks 0.08 4 0.32 2 0.16
Innovating company 0.08 4 0.32 4 0.32
Ethical, socially responsible, and sustainable company 0.05 2 0.1 3 0.15
Strong advertising company with more than 40 slogans and songs 0.07 3 0.21 3 0.21
PepsiCo as the largest part of the market share after Coca-Cola 0.06 4 0.24 3 0.18
Weaknesses: 0 0
PepsiCo production is really expensive because of the need to constantly develop new
products to meet the changing costumers demands 0.05 1 0.05 2 0.1
PepsiCo is experiencing a lack of focus towards Pepsi 0.06 0 0
PepsiCo is experiencing product recalls 0.12 1 0.12 1 0.12
PepsiCo has low employment productivity and a weak distribution 0.08 1 0.08 1 0.08
PepsiCo depends too much on the US market 0.08 2 0.16 1 0.08
PepsiCo is far behind Coca-Cola in the international market 0.09 2 0.18 1 0.09
1
4.68 4.96
EXTERNAL ENVIRONMENT
INDUSTRY ANALYSIS –
TASK ENVIRONMENT
THREAT OF NEW ENTRANTS - LOW
PepsiCo is well established and have Pepsi
Bottling Group
Have brand equity
Loyal customers
Economic
It rely on trucks for transportation
Fuel price fluctuation is one of the important aspect
Economic crisis will also to labor supplier and consumer’s purchasing
power
SOCIETAL ENVIRONMENT
ANALYSIS-PESTEL
Social
Population on young consumers
Changes in life style
Social trend and demand
People want to be healthy
Technology
Awareness on new machine launching
Advance technology automation, will affect
production efficiency R&D facilities.
SOCIETAL ENVIRONMENT
ANALYSIS-PESTEL
Environmental
Some Environmental issues like Water
Contamination
Legal
global political change that also creates problem or
hurdles for the company.( Pakistan)
Many different markets across the world follow
different set of regulations, which are either relaxed
or severe.
OPPORTUNITIES
1. Opening in market for less costly products
2. Growth opportunities in developed countries as well
as international non-established countries
3. Pepsi recently reacquired ownership of its two
largest bottlers, Pepsi Bottling Group (PBG) and
PepsiAmericas (PAS)
4. Compete in more than one industry (non-alcoholic
beverage industry, the salty or savory snack food
industry, and the breakfast food industry)
5. Growth in the carbonated drink market is the
largest in Asia and Europe
6. The world's demand is experiencing a growth with
the sports drinks, bottled water, and energy drinks
THREATS
1. Fierce competition from Coca-Cola, which owns the
largest piece of the market share
2. The downturn in economy, which lead customers to
shift away from bottles of water to tap water.
3. Because of the recession, customers are finding
cheaper alternatives to the national brands.
4. Customers are getting more conscious and
concerned about their eating habits and general
health.
5. Campaign against plastic containers has impacted
the sale of bottled beverages
6. Highly dependent on supplies of clean water, to
prevent contamination
EFAS TABLE
Innovate products with Improve international
(O4, S1, S2, S6, S7) (T1, S1, S2, S3, S8) (W2, W5, W6, O2, O5) (W1, T2, T5) Adjust
Continue to offer Innovate Pepsi product Expand Pepsi sodas production of bottles
variety or product in line with something product in Europe and with downturn in
various brands. that is going to Asia. economy.
differentiate us from
(O5, O2, S2) Expand Coca-Cola. (W1, O4, O6) Improve (W1, T3) Produce
and focus on the their sales in the bigger size of bottles
carbonated drinks and (S1, S3, O4) Innovate beverage segment by and sale them at the
beverage segment in products by offering responding to the same price as the small
Asia and Europe. healthier alternatives. increasing demand for one.
sports drinks, bottled
(O6, O4, S6, S7) (T2, T3, S3) Offer more water, and energy (W3, T6) Be
Respond to the promotions or drinks. responsible and
growing demand of discounts to prevent cautious towards
sports drinks, bottled sales from decreasing. supplies of water.
water, and energy
drinks by expanding (T5, S1, S2, S4) (W1, W4, T6) Increase
product market. Develop more supply chain
environmentally production by
friendly containers. monitoring cautiously
employees and
(T6, S6) Support improving workers
environmental issues, training.
such as pollution,
(W5, W6, T1) Increase
which causes water presence in the
contamination. international market.
CORPORATE STRATEGY
Directional Strategy
Growth Strategy
Merger
Acquisition
Strategic Alliances
Concentration Strategy
Diversification Strategy
Stability Strategy
Pause/Proceed with Caution Strategy
No-Change Strategy
Profit Strategy
Retrenchment Strategy
Turnaround Strategy
Captive Company Strategy
Sell-out/ Divestment Strategy
Bankruptcy / Liquidation Strategy
Portfolio Strategy
BCG Growth Share Matrix
GE Business Screen Matrix
Parenting Strategy
CORPORATE STRATEGY
Corporate level strategy revolves around asking, "What business are we going to be
in? What business should we abandon? What types of portfolio businesses should we
hold?" Therefore a large corporation like Pepsi each quarter evaluates their
portfolio businesses (whether it is in beverages, snacks or fast food). After viewing
the performance of each, they decide to either cut activity in one or increase focus in
one.
PepsiCo was US centric three years ago and it had a western “Push model” of
business. To accelerate global growth PepsiCo restructured its food and
beverages business in America so that it will include other region such as Canada,
Mexico and Latin America.
To accelerate it more PepsiCo created sectors for PepsiCo Europe and PepsiCo
Asia, Middle East and Africa along with the Americas Foods and Americas
Beverages sectors. This helped in leading a new path of innovation and product
development.
The acquisition of Quaker oats in last “August 2000” was a smart move of
PepsiCo which enabled the synergies between both the companies. After the
acquisition PepsiCo witnessed the growth of 14% in fiscal year 2001. The large
product portfolio and distribution channels of Quaker helped PepsiCo to add more to
its economies of scale.
PEPSICO CORPORATE STRATEGY
The Strategic Planning is “the process of
determining an organisation’s primary objectives
and adopting courses of action that will achieve
these objectives” (Boone and Kurtz, 2013, p.39).
It plays a critical role in ensuring long-term
growth of a business entity.
1. INTERNATIONAL MARKET
EXPANSION STRATEGY THROUGH
MERGERS AND ACQUISITIONS.
High 3.0 to
4.0
PepsiCo
Medium 2.0
The EFE
to 2.99
Total
Weighted
Scores
Low 1.0 to
1.99
ANSOFF MATRIX
BUSINESS LEVEL STRATEGY
Competitive Strategy
Porter’sCompetitive Strategy
Price Based Strategies
Differentiation Strategies
The Hybrid Strategies
Focused Differentiation Strategies
Failure Strategies
Cooperative Strategy
BUSINESS LEVEL STRATEGIES
PepsiCo engages in a low-cost-differentiation
strategy by taking advantage of economies of
scale through mass production of its products
and by differing their products through taste and
marketing.
FUNCTIONAL LEVEL STRATEGY
Marketing Strategies
Product
Price
Place
Promotion
Financial Strategies
Research and Development Strategies
Operational Strategies
Purchasing Strategies
HRM Strategies
Procedures
HISTORY STONES
HISTORY
The Pepsi-Cola story
began in New Bern,
North Carolina.
A pharmacist named
Caleb Bradham
operated a drug store
and soda fountain.
He often
experimented with
exotic oils and fruit
extracts hoping to
make a soft drink that
tasted good.
One of his creations
became popular (1893)
among the local
patrons, which they
called Brad’s Drink.
In 1898, the drink was
renamed Pepsi-Cola.
The first known
Pepsi-Cola newspaper
advertisement
appeared in 1902.
The ad proclaimed the
health benefits of
Pepsi-Cola.
In 1903, Bradham
registered the
Pepsi-Cola name
with the United
States Patent and
Trademark Office.
That same year, the
Pepsi-Cola script was
used in a newspaper
ad for the first time.
Early in the 20th
century, major
advancements in the
soft drink industry
made bottling a viable
alternative to fountain
drinks.
In 1905, Pepsi-Cola
was made available in
bottles
To take advantage of
this new market,
Bradham began
offering bottling
franchises.
By 1909, there were
250 Pepsi-Cola
bottlers in 24 states.
The Pure Food and
Drug Act was adopted
in 1906.
The new law forced
many soft drink
manufacturers to
change their formula.
The Pepsi-Cola
formula met the
new requirements
and did not need to
be altered.
Between 1905 and
1910, the Pepsi-Cola
Company experienced
phenomenal growth
and profits.
These profits were
used to improve Pepsi-
Cola advertising.
In 1908, famous race
car driver, Barney
Oldfield became the
first celebrity
endorser for Pepsi-
Cola.
Unfortunately, the
amazing growth
experienced by the
Pepsi-Cola Company
during the early
1900’s came to an
abrupt halt with the
onset of World War I.
With the war came
price controls and
sugar rationing.
By the end of World
War I, the Pepsi-Cola
Company was in dire
financial straights.
The conditions were
made worse by an
unstable sugar
market.
By 1923, the Pepsi-
Cola Company was
bankrupt.
Roy Megargel, a
wall street financier,
headed a group of
investers that
purchased the Pepsi-
Cola trademark and
formula from the
bankruptcy.
In 1923, Pepsi-Cola
headquarters moved
to Richmond,
Virginia, where
Megargel tried to
revive the Pepsi-Cola
Company.
By 1929, there was a
glimmer of hope
within the Pepsi-Cola
Company.
That ended in October
of 1929, when the
stock market crashed
and the country
plunged into the great
Depression.
Again bankrupt.
Mr Charles Guth,
President of Loft
Candies.
Loft operated a chain
of candy stores in the
New York etropolitan
area that dispensed
Coca-Cola at their
soda fountains.
Guth wanted a
volume discount from
the Coca-Cola
Company.
Coke refused.
PepsiCo.
Wall Street called this
“a marriage made
in snack food
heaven.”
The Pepsi Generation advertising continued
throughout the 1970’s. In 1973, the slogan was
“Join the Pepsi People Feel in’ Free.
Undoubtedly, the most memorable commercial of
this campaign was “Puppies.”
The commercial that aired on television was not
the commercial the advertising agency had
planned.
During the shooting of the
commercial, the little boy
accidently spilled Pepsi on
himself.
The puppies eagerly licked
the spilled Pepsi off the boy,
which caused the boy to
giggle.
They rewrote the
commercial to incorporate
this scene and as they say,
the rest is history.
PEPSI CHALLENGE.
Dallas, Texas was a very tough market for Pepsi.
None of the advertising campaigns or promotions
used by the local bottler increased sales.
With nothing to lose, their advertising agency
suggested they try a taste test.
Consumers were asked to take the Pepsi Challenge.
They were given unmarked cups of cola and then
asked which one they preferred.
Overwhelmingly, the participants preferred Pepsi.
The results were used in commercials. Sales shot up.
The program was so successful in Dallas that other
Pepsi bottlers began to use the Pepsi Challenge.
By 1978, the entire country wanted to take the Pepsi
Challenge.
ACQUISITION
In 1977 PepsiCo acquires Pizza Hut, Inc
In 1978 PepsiCo acquires Taco Bell
New products
Product appearance CEO
1. Innovation Yearly
Acquisition of new
brands
Numbers of new
countries entered
Number of sales in
2. Brand expansion Yearly CEO
the International
Segment
Financial
1. Reduce cost of
Income Statement Quarterly Chief Financial Officer
production
Increase annual
2. Increase profitability Quarterly Chief Financial Officer
report
SUMMARY
Today, Pepsi faces numerous challenges, from
health and wellness to government mandates.
Despite these issues, the future looks promising.