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BUSINESS ORGANISATION

& MANAGEMENT

SUBMITTED BY-YASH MITTAL

KANCHAN KAUSHIKZEESHAN TANVEERRONAK GUPTAAKASH SHARMASHOUMITRO ROY

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SWOT ANALYSIS OFINDIAN RETAILSECTOR( IN CONTEXT OF FDI

POLICY)

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What do we mean by FDI?

Foreign Direct Investment (FDI) can be definedas a cross border investment, where foreignassets are invested into the organizations of thedomestic market excluding the investment in

stock. It brings private funds from overseas intoproducts or services. The domestic company inwhich foreign currency is invested is usually beingcontrolled by the investing foreign company. Eg.

An American company taking major stake in acompany in India. Their ROI is based on theperformance of the project.

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In the past decades, FDI was concerned onlywith highly industrialized countries. US was theworlds largest recipient of FDI during 2006 withan investment of 184 million from OECD

(Organization for Economic Co-operation andDevelopment) countries. France, Greece,Iceland, Poland, Slovak Republic, Switzerland

and Turkey also have a positive record in FDIinvestments. Now, during the course of time, FDIhas become a vital part in every country moreparticularly with the developing countries.

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This is because of the following reasons:Availability of cheap labor.Uninterrupted availability of raw material.Less production cost compared with other developed countries.Quick and easy market penetration.

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What Is Retailing?

In 2004, The High Court of Delhi defined the termretail as a sale for final consumption in contrast to asale for further sale or processing (i.e. wholesale). Asale to the ultimate consumer.

Thus,retailing can be said to be the interfacebetween the producer and the individual consumerbuying for personal consumption. This excludes directinterface between the manufacturer and institutional

buyers such as the government and other bulkcustomers. Retailing is the last link that connects theindividual consumer with the manufacturing anddistribution chain.A retailer is involved in the act ofselling goods to the individual consumer at a margin

of profit.

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FDI IN RETAIL SECTOR

Retailing is one of the worlds largest privateindustry. Liberalizations in FDI have caused amassive restructuring in retail industry. Thebenefit of FDI in retail industry superimposes its

cost factors. Opening the retail industry to FDI willbring forth benefits in terms of advanceemployment, organized retail stores, availability ofquality products at a better and cheaper price. It

enables a country's product or service to enterinto the global market.

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FDI IN INDIA Starting from a baseline of less than $1 billion in 1990, a recentUNCTAD survey projected India as the second most important

FDI destination (after China) for transnational corporationsduring 20102012. As per the data, the sectors which attractedhigher inflows were services, telecommunication, constructionactivities and computer software and hardware. Mauritius,Singapore, the US and the UK were among the leading sourcesof FDI.

FDI in 2010 was $24.2 billion, a significant decrease from both2008 and 2009. Foreign direct investment in August 2010 dippedby about 60% to approx. $34 billion, the lowest in 2010 fiscal,industry department data released showed. In the first twomonths of 201011 fiscal, FDI inflow into India was at an all-time

high of $7.78 billion up 77% from $4.4 billion during thecorresponding period in the previous year.

The worlds largest retailerWal-Mart has termed Indias decisionto allow 51% FDI in multi-brand retail as a first important stepand said it will study the finer details of the new policy todetermine the impact on its ability to do business in India.

However this decision of the government is currently undersuspension due to opposition from multiple political quarters.

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FDI POLICY IN INDIA FDI as defined in Dictionary of Economics (Graham Bannock et.al) isinvestment in a foreign country through the acquisition of a local

company or the establishment there of an operation on a new(Greenfield) site. To put in simple words, FDI refers to capital inflowsfrom abroad that is invested in or to enhance the production capacity ofthe economy.

Foreign Investment in India is governed by the FDI policy announced by

the Government of India and the provision of the Foreign ExchangeManagement Act (FEMA) 1999. The Reserve Bank of India (RBI) inthis regard had issued a notification, which contains the ForeignExchange Management (Transfer or issue of security by a personresident outside India) Regulations, 2000. This notification has beenamended from time to time.

The Ministry of Commerce and Industry, Government of India is the

nodal agency for motoring and reviewing the FDI policy on continuedbasis and changes in sectoral policy/ sectoral equity cap. The FDI policyis notified through Press Notes by the Secretariat for IndustrialAssistance (SIA), Department of Industrial Policy and Promotion (DIPP).

The foreign investors are free to invest in India, except fewsectors/activities, where prior approval from the RBI or ForeignInvestment Promotion Board (FIPB) would be required.

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FDI IN INDIAN RETAIL SECTOR As per the current regulatory regime, retail trading (except undersingle-brand product retailing FDI up to 51 per cent, under the

Government route) is prohibited in India. Simply put, for acompany to be able to get foreign funding, products sold by it tothe general public should only be of a single-brand; thiscondition being in addition to a few other conditions to beadhered to.

India being a signatory to World Trade Organization's GeneralAgreement on Trade in Services, which include wholesale andretailing services, had to open up the retail trade sector to foreigninvestment. There were initial reservations towards opening upof retail sector arising from fear of job losses, procurement frominternational market, competition and loss of entrepreneurialopportunities. However, the government in a series of moves hasopened up the retail sector slowly to Foreign Direct Investment(FDI). In 1997, FDI in cash and carry (wholesale) with 100percent ownership was allowed under the Government approvalroute. It was brought under the automatic route in 2006. 51

percent investment in a single brand retail outlet was alsopermitted in 2006. FDI in Multi-Brand retailing is prohibited in

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It will be prudent to look into a press note issued by DIPP andconsolidated FDI Policy issued in October 2010 which provide the

sector specific guidelines for FDI with regard to the conduct oftrading activities.

a) FDI up to 100% for cash and carry wholesale trading and exporttrading allowed under the automatic route.

b) FDI up to 51 % with prior Government approval (i.e. FIPB) for retailtrade of Single Brand products, subject to Press Note 3 (2006

Series).

c) FDI is not permitted in Multi Brand Retailing in India.

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ADVANTAGES OF FDI INRETAIL causes a flow of money into the economy which

stimulates economic activity

it may give domestic producers an incentive to becomemore efficient

the government of the country experiencing increasing

levels of FDI will have a greater voice at internationalsummits as their country will have more stakeholders in it

Increase economic growth by dealing with differentinternational products

1 million employment will create in three years - UPAGovernment

Billions will be invested in Indian market

Spread import and export business in different countries

Agriculture related people will get good price of their goods

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DISADVANTAGES OF FDI INRETAIL

inflation may increase slightly domestic firms may suffer if they are relatively uncompetitive

if there is a lot of FDI into one industry e.g. the automotiveindustry then a country can become too dependent on it and itmay turn into a risk that is why countries like the Czech

Republic are "seeking to attract high value-added servicessuch as research and development (e.g.) biotechnology)

Will affect 50 million merchants in India

Profit distribution, investment ratios are not fixed

An economically backward class person suffers from price

raise Retailer faces loss in business

Market places are situated too far which increases travelingexpenses

Workers safety and policies are not mentioned clearly Inflation may be increased

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Since foreign firms will bring new technologies and moneywith them which would result in lot of small businessman anddomestic companies going out of business as foreigncompanies have advantage of scale of operations and also toptalent with them. The proverb big fish eat little fish scenariomay happen due to foreign direct investment.

Since these companies will also have more technology andthey will use capital intensive methods, it will affect the jobs ofmany people because eventually after some time they mightnot be needed.

Chances of these foreign firms becoming monopolies due totheir large size and then charging exorbitant rates fromconsumers cannot be ruled out and therefore governmentshould ensure that they have proper policies and systems inplace to keep a check on such practices.

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Entry Options For Foreign Players prior to FDI

Policy

Although prior to Jan 24, 2006, FDI was not authorized in retailing, mostgeneral players had been operating in the country. Some of entranceroutes used by them have been discussed in sum as below:-1. Franchise AgreementsIt is an easiest track to come in the Indian market. In franchising andcommission agents services, FDI (unless otherwise prohibited) is allowed

with the approval of the Reserve Bank of India (RBI) under the ForeignExchange Management Act. This is a most usual mode for entrance ofquick food bondage opposite a world. Apart from quick food bondage

identical to Pizza Hut, players such as Lacoste, Mango, Nike as good asMarks as good as Spencer, have entered Indian marketplace by this route.2. Cash And Carry Wholesale Trading100% FDI is allowed in wholesale trading which involves building of a largedistribution infrastructure to assist local manufacturers. The wholesalerdeals only with smaller retailers and not Consumers. Metro AG of Germany

was the first significant global player to enter India through this route.

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3. Strategic Licensing Agreements

Some foreign brands give exclusive licenses and distribution rights to Indiancompanies. Through these rights, Indian companies can either sell it throughtheir own stores, or enter into shop-in-shop arrangements or distribute thebrands to franchisees. Mango, the Spanish apparel brand has entered Indiathrough this route with an agreement with Piramyd, Mumbai, SPAR enteredinto a similar agreement with Radhakrishna Foodlands Pvt. Ltd

4.Manufacturing and Wholly Owned Subsidiaries.The foreign brands such as Nike, Reebok, Adidas, etc. that have wholly-owned subsidiaries in manufacturing are treated as Indian companies andare, therefore, allowed to do retail. These companies have been authorizedto sell products to Indian consumers by franchising, internal distributors,existent Indian retailers, own outlets, etc. For instance, Nike entered through

an exclusive licensing agreement with Sierra Enterprises but now has awholly owned subsidiary, Nike India Private Limited.

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FDI IN SINGLE BRAND RETAIL

The Government has not categorically defined the meaning of Single Brand

anywhere neither in any of its circulars nor any notifications.In single-brand retail, FDI up to 51 per cent is allowed, subject to ForeignInvestment Promotion Board (FIPB) approval and subject to the conditionsmentioned in Press Note 3 that (a) only single brand products would be sold(i.e., retail of goods of multi-brand even if produced by the same manufacturerwould not be allowed), (b) products should be sold under the same brandinternationally, (c) single-brand product retail would only cover products whichare branded during manufacturing and (d) any addition to product categoriesto be sold under single-brand would require fresh approval from thegovernment.While the phrase single brand has not been defined, it implies that foreign

companies would be allowed to sell goods sold internationally under a single

brand, viz., Reebok, Nokia, Adidas. Retailing of goods of multiple brands,

even if such products were produced by the same manufacturer, would not beallowed.

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Going a step further, we examine the concept of single brand and the

associated conditions:FDI in Single brand retail implies that a retail store with foreign investment

can only sell one brand. For example, if Adidas were to obtain permission toretail its flagship brand in India, those retail outlets could only sell productsunder the Adidas brand and not the Reebok brand, for which separatepermission is required. If granted permission, Adidas could sell productsunder the Reebok brand in separate outlets.But, what is a brand?

Brands could be classified as products and multiple products, or could bemanufacturer brands and own-label brands. Assume that a company ownstwo leading international brands in the footwear industrysay A and R. Ifthe corporate were to obtain permission to retail its brand in India with a localpartner, it would need to specify which of the brands it would sell. A readingof the government release indicates that A and R would need separate

approvals, separate legal entities, and may be even separate stores in whichto operate in India. However, it should be noted that the retailers would beable to sell multiple products under the same brand, e.g., a product rangeunder brand A Further, it appears that the same joint venture partners could

operate various brands, but under separate legal entities.

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Now, taking an example of a large departmental grocery chain, prima facie itappears that it would not be able to enter India. These chains would,typically, source products and, thereafter, brand it under their private labels.Since the regulations require the products to be branded at themanufacturing stage, this model may not work. The regulations appear todiscourage own-label products and appear to be tilted heavily towards theforeign manufacturer brands.There is ambiguity in the interpretation of the term single brand. The existing

policy does not clearly codify whether retailing of goods with sub-brandsbunched under a major parent brand can be considered as single-brandretailing and, accordingly, eligible for 51 per cent FDI. Additionally, thequestion on whether co-branded goods (specifically branded as such at thetime of manufacturing) would qualify as single brand retail trading remainsunanswered.

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FDI IN MULTI-BRAND RETAIL

The government has also not defined the term Multi Brand. FDI in MultiBrand retail implies that a retail store with a foreign investment can sellmultiple brands under one roof.In July 2010, Department of Industrial Policy and Promotion (DIPP), Ministryof Commerce circulated a discussion paper on allowing FDI in multi-brand

retail. The paper doesnt suggest any upper limit on FDI in multi-brand retail.If implemented, it would open the doors for global retail giants to enter andestablish their footprints on the retail landscape of India. Opening up FDI inmulti-brand retail will mean that global retailers including Wal-Mart,Carrefour and Tesco can open stores offering a range of household itemsand grocery directly to consumers in the same way as the ubiquitous kirana

store.

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FOREIGN INVESTORS CONCERN RELATED TO FDI

For those brands which adopt the franchising route as a matter of policy, thecurrent FDI Policy will not make any difference. They would have preferredthat the Government liberalize rules for maximizing their royalty andfranchise fees. They must still rely on innovative structuring of franchisearrangements to maximize their returns. Consumer durable majors such asLG and Samsung, which have exclusive franchisee owned stores, are

unlikely to shift from the preferred route right away.For those companies which choose to adopt the route of 51% partnership,they must tie up with a local partner. The key is finding a partner which isreliable and who can also teach a trick or two about the domestic marketand the Indian consumer. Currently, the organized retail sector is dominatedby the likes of large business groups which decided to diversify into retail to

cash in on the boom in the sector corporates such as Tata through itsbrand Westside, RPG Group through Foodworld, Pantaloon of the RahejaGroup and Shoppers Stop. Do foreign investors look to tie up with an

existing retailer or look to others not necessarily in the business but lookingto diversify, as many business groups are doing?

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An arrangement in the short to medium term may work wonders but whathappens if the Government decides to further liberalize the regulations as it is

currently contemplating? Will the foreign investor terminate the agreement withIndian partner and trade in market without him? Either way, the foreign investormust negotiate its joint venture agreements carefully, with an option for a buy-out of the Indian partners share if and when regulations so permit. They must

also be aware of the regulation which states that once a foreign companyenters into a technical or financial collaboration with an Indian partner, it cannot

enter into another joint venture with another Indian company or set up its ownsubsidiary in the same field without the first partners consent if the joint

venture agreement does not provide for a conflict of interest clause. In effect, it

means that foreign brand owners must be extremely careful whom they chooseas partners and the brand they introduce in India. The first brand could also betheir last if they do not negotiate the strategic arrangement diligently.

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RATIONALE BEHIND ALLOWING FDI IN RETAIL SECTOR

FDI can be a powerful catalyst to spur competition in the retail industry,due to the current scenario of low competition and poor productivity.

The policy of single-brand retail was adopted to allow Indian consumersaccess to foreign brands. Since Indians spend a lot of money shopping

abroad, this policy enables them to spend the same money on the samegoods in India. FDI in single-brand retailing was permitted in 2006, up to 51per cent of ownership. Between then and May 2010, a total of 94 proposalshave been received. Of these, 57 proposals have been approved. An FDIinflow of US$196.46 million under the category of single brand retailing wasreceived between April 2006 and September 2010, comprising 0.16 per cent

of the total FDI inflows during the period. Retail stocks rose by as much as5%. Shares of Pantaloon Retail (India) Ltd ended 4.84% up at Rs 441 on theBombay Stock Exchange. Shares of Shoppers Stop Ltd rose 2.02% and

Trent Ltd, 3.19%. The exchanges key index rose 173.04 points, or 0.99%, to

17,614.48. But this is very less as compared to what it would have been hadFDI upto 100% been allowed in India for single brand.

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The policy of allowing 100% FDI in single brand retail can benefit both theforeign retailer and the Indian partner foreign players get local marketknowledge, while Indian companies can access global best managementpractices, designs and technological knowhow. By partially opening this sector,the government was able to reduce the pressure from its trading partners inbilateral/ multilateral negotiations and could demonstrate Indias intentions in

liberalizing this sector in a phased manner.

Permitting foreign investment in food-based retailing is likely to ensureadequate flow of capital into the country & its productive use, in a manner likelyto promote the welfare of all sections of society, particularly farmers andconsumers. It would also help bring about improvements in farmer income &agricultural growth and assist in lowering consumer prices inflation.

Apart from this, by allowing FDI in retail trade, India will significantly flourish interms of quality standards and consumer expectations, since the inflow of FDI inretail sector is bound to pull up the quality standards and cost-competitivenessof Indian producers in all the segments. It is therefore obvious that we shouldnot only permit but encourage FDI in retail trade.

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Conclusion

A START HAS BEEN MADE

Wal-mart has a joint venture with Bharti Enterprises for cash-and-carry (wholesale) business, which runs the Best Pricestores. It plans to have 15 stores by March and enter new stateslike Andhra Pradesh , Rajasthan, Madhya Pradesh andKarnataka.Duke, Wall-marts CEO opined that FDI in retail would containinflation by reducing wastage of farm output as 30% to 40% ofthe produce does not reach the end-consumer. In India, there isan opportunity to work all the way up to farmers in the back-endchain. Part of inflation is due to the fact that produces do not

reach the end-consumer, Duke said, adding, that a similar trendwas noticed when organized retail became popular in the US.

Many of the foreign brands would come to India if FDI in multibrand retail is permitted which can be a blessing in disguise forthe economy.

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The government has added an element of social benefit to its latest plan forcalibrated opening of the multi-brand retail sector to foreign direct investment(FDI). Only those foreign retailers who first invest in the back-end supplychain and infrastructure would be allowed to set up multi brand retail outlets inthe country. The idea is that the firms must have already created jobs for ruralIndia before they venture into multi-brand retailing. It can be said that the advantages of allowing unrestrained FDI in the retailsector evidently outweigh the disadvantages attached to it and the same can

be deduced from the examples of successful experiments in countries likeThailand and China; where too the issue of allowing FDI in the retail sectorwas first met with incessant protests, but later turned out to be one of themost promising political and economical decisions of their governments andled not only to the commendable rise in the level of employment but also ledto the enormous development of their countrys GDP.

Moreover, in the fierce battle between the advocators and antagonist ofunrestrained FDI flows in the Indian retail sector, the interests of theconsumers have been blatantly and utterly disregarded. Therefore, one of thearguments which inevitably needs to be considered and addressed whiledeliberating upon the captioned issue is the interests of consumers at large inrelation to the interests of retailers.

BACK-END LOGISTICS MUST FOR FDI IN MULTI BRAND RETAIL

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The Industrial policy 1991 had crafted a trajectory of change wherebyevery sectors of Indian economy at one point of time or the other would be

embraced by liberalization, privatization and globalization.FDI in multi-brand retailing and lifting the current cap of 51% on single brand retail is inthat sense a steady progression of that trajectory. But the government hasby far cushioned the adverse impact of the change that has ensued in thewake of the implementation of Industrial Policy 1991 through safety netsand social safeguards. But the change that the movement of retailing

sector into the FDI regime would bring about will require more involvedand informed support from the government. One hopes that thegovernment would stand up to its responsibility, because what is at stakeis the stability of the vital pillars of the economy- retailing, agriculture, andmanufacturing. In short, the socio economic equilibrium of the entirecountry.

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SWOT ANALYSIS

SWOT analysis (alternately SLOT analysis) is a strategic planningmethod used to evaluate the Strengths, Weaknesses/Limitations,Opportunities, and Threats involved in a project or in a businessventure. It involves specifying the objective of the business venture orproject and identifying the internal and external factors that arefavorable and unfavorable to achieve that objective. The technique iscredited to Albert Humphrey, who led a convention at StanfordUniversity in the 1960s and 1970s using data from Fortune 500companies.

Setting the objective should be done after the SWOT analysis has beenperformed. This would allow achievable goals or objectives to be set forthe organization.

1. Strengths: characteristics of the business, or project team that give it

an advantage over others2. Weaknesses (or Limitations): are characteristics that place the team

at a disadvantage relative to others

3. Opportunities: externalchances to improve performance (e.g. makegreater profits) in the environment

4. Threats: externalelements in the environment that could cause

trouble for the business or project

http://en.wikipedia.org/wiki/Strategic_planninghttp://en.wikipedia.org/wiki/Projecthttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Albert_S_Humphreyhttp://en.wikipedia.org/wiki/Fortune_500http://en.wikipedia.org/wiki/Fortune_500http://en.wikipedia.org/wiki/Albert_S_Humphreyhttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Projecthttp://en.wikipedia.org/wiki/Strategic_planning

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http://en.wikipedia.org/wiki/File:SWOT_en.svg

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PEPSICO INDIAo PepsiCo entered India in 1989 and in a short

period of 20 years has grown into the largest andone of the fastest growing food & beveragebusiness in the country. PepsiCo Indias growth

has been guided by PepsiCos global vision ofPerformance with Purpose. This means that

while businesses maximize shareholder value,they have a responsibility to all the stakeholders

including the communities in which they operate,the consumers they serve and the environmentwhose resources they use.

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Large investor: One of the largest US multinational investors in thecountry with an investment of over $1 billion, PepsiCo India provides directand indirect employment to over 1,50,000 people across the country. Its

beverage and snack food business is supported by 36 beverage bottlingplants, (13 company and 23 franchisee owned) and three food plants.PepsiCo Indias diverse portfolio includes iconic brands like Pepsi, Lays,

Kurkure, Tropicana 100%, Gatorade, Quaker and young but immenselypopular and fast growing brands such as Nimbooz and Aliva.

No.1 food & beverage business in India: PepsiCo India has not onlygrown to become the countrys largest food and beverage business but has

also become a powerful and consistent driver of PepsiCos global growth.

Over the last two years, India's beverage and foods businesses have beenthe largest volume growth contributors to PepsiCo across the globe.PepsiCo India has been frequently recognized for its industry-leading humanresource practices, indovations, corporate values, and talent, and was one

of the five top marketers of the country in 2009.

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A third of PepsiCo India's portfolio today comprises healthierproducts:PepsiCos portfolio reflects its commitment to nourishconsumers with a diverse range of fun and healthy products, making the

healthful choice an easier choice. As PepsiCo grows, the portfoliotransformation will continue with a systematic plan to reduce added sugar,sodium and saturated fats in its products. Today, the portfolio includesseveral healthier treats like Quaker Oats, Tropicana juices, rehydratorGatorade, Pepsi Max and Cheetos Whoosh. PepsiCo was the first in Indiato introduce the use of healthier oils for its snacks -- Lays Potato chips,

Kurkure and Cheetos.

Global leader in water conservation: In 2009, PepsiCo Indiaachieved a significant milestone, by becoming the first business in thePepsiCo system to achieve Positive Water Balance (PWB). Thismeans that it replenishes more water than it consumes in its

manufacturing operations. This has been validated by Deloitte Consulting.PepsiCo is leading a pioneering initiative to replace transplanting of paddywith direct seeding technology which has helped reduce waterconsumption in paddy cultivation by over 30% and has also cut downGHG emissions by 75%. In 2010, PepsiCo India saved 10.1 billion litres ofwater through various initiatives. For water related environment initiatives,

PepsiCo India has received numerous awards such as CII National awardfor water mana ement Water Di est award for water ractices and

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Care for the environment: Following its success in water conservation,the company is now focused on reducing its carbon footprint. Nearly 30% ofits energy is today generated from renewable sources such as rice huskboilers and wind turbines. Initiatives such as agriculture waste boilers in our

plants, installation of wind turbines, reduction of use of chemicals, reductionin weight of packaging and film used in product packaging, reduction inweight of metal crowns/polypropylene caps for plastic bottles, conversion ofpotato waste into bio gas help reduce load on the environment. PepsiCoIndia also partners NGOs and local administrations in three states of India torecycle household solid waste in an endeavor to keep cities clean. Itsaward-winning "waste to wealth" recycling program reaches 450,000families.

Exemplary employment practices: PepsiCo India believes in providingemployment and growth opportunities to local talent. Its College of

Leadership, ensures early identification of talent, and employees focuseddevelopment through critical experiences. PepsiCo strongly believes inWinning with Diversity and Inclusion. PepsiCo has been offering

employment to women employees at the same employment terms and equalgrowth opportunities as men. Today women comprise more than 25% of thecompanys leadership team in India. PepsiCo India currently employs over

100 differently-abled people and has won the prestigious Hellen Kelleraward from the National Centre for Promotion of Employment for Disabled

SWOT ANALYSIS OF PEPSICO

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SWOT ANALYSIS OF PEPSICOINDIA

INTERNAL FACTORS

STRENGTHS :

experienced management team

a competitive product line

a global marketing realm

continuous efforts by their research and development to research trends in the

industry and to be creative in exploiting those trends Experienced, broad base of interests and knowledge

Unique, tastes good, competitive price, and convenient

Good Marketing

Diverse, and global awareness

International, diverse positions

Personnel

High sales revenue, high sale growth, large capital base

Low costs and liabilities due to outsourcing of bottling

Efficient Research & Development

Distinctive name, product and packaging in with regards to its markets

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WEAKENESS : The company is so large and could possibly lose focus or have internal

conflict problems New one calorie products have no existing customer base, genericbrands can make similar drinks - cheaper Possible conflicts due to so many people, possible trouble stayingfocused High expenses, may have trouble balancing cash-flows of such a large

operation Lose control and quality standards Not entirely patentable, constant replicability by competitors

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External Factors

OPPORTUNITIES Huge market in the healthy products and growing market forspecialized foods for ethnic groups Internet promotion such as banner ads and keywords can increasetheir sales, and more computerized manufacturing and orderingprocesses can increase their efficiency

Consumer income is high, more tend to eat out, convenience isimportant to them. Ever increasing population, increasing the demand. As in all over the world people are rushing towards fast food andbeverage because of life which has become much faster, it provide thecompany a favor to capture this fast moving market with its take awayproduct.

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THREATS More expensive products than Coke, such a high price may limit lower

income families from buying a Pepsi product Computer breakdowns, viruses and hackers can reduce efficiency, andmust constantly update products or other competitors will be moreadvanced High expenses, may have trouble balancing cash-flows of such a largeoperation New one calorie products have no existing customer base, genericbrands can make similar drinks cheaper The quickness of technological advances causing existing products to beno longer the most advanced. Very elastic demand, almost pure competition in pricing of product

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SWOT MATRIX

Basically four main strategies are proposed:

S-O strategies pursue opportunities that are a good fit tothe companies strengths. These strategies are based oninstitutional strengths to take advantage of marketopportunities.

W-O strategies overcome weaknesses to pursueopportunities. These strategies are based on overcominginstitutional weaknesses to take advantage of marketopportunities.

S-T strategies identify ways that the firm can use its

strengths to reduce its vulnerability to external threats.These strategies are based on institutional strengths toavoid market threats.

W-T strategies establish a defensive plan to prevent thefirm's weaknesses from making it highly susceptible toexternal threats. These strategies are based onovercoming/minimizing institutional weaknesses to avoid

SWOT MATRIX OF PEPSICO

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SWOT MATRIX OF PEPSICOINDIA

We have discussed SWOT analysis of Pepsi-Co in our previoustopic now here we are going to discuss the TOWS Matrix of Pepsi-Co, keeping in mind its SWOT analysis. Following is the detailedanalysis of PepsiCo SWOT matrix:

WT ANALYSIS

One weakness that Pepsi posses is that it has very strong taste itreally feels that something highly toxic going inside the body, whereas the same product of the coke is not much strong.

They also have a problem of imitators as receives complaints fromcustomers that they find take product in disguised of Pepsis product.During the last years, it was published in financial post that there has

been big complaints from the customers with regard to the bad tastethat they experienced during the span of six months. If they soon payno attention towards that this will create a big problem for them.

Large size may lead to conflicting interests.

New one calorie products have no existing customer base; genericbrands can make similar drinks cheaper. It is also big threat for any

company people may like or dislike new launching product.

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WO ANALYSIS

They have a lack of emphasis on this in their advertising such as currentlywhen they losses the bid for official drink in the 96 cricket world cup. Theystarted a campaign in which they highlight the factor such as nothing official

about it. If they dont focus on sudden changings in their advertising then

they can convert this weakness into opportunity.

They lack behind in catering the rural areas and just concentrating in theurban areas. They should try to increase their distributions and also focus oncapturing rural areas; this will become a big opportunity for them.

The other big weakness on Pepsi is that they dont pay any attentiontowards garments. They may enter in garments business in order to

promote their brand name, by making sports cloths fro players whichrepresent their name by wearing their clothes. That must increase thecustomer and income of the Pepsi.

High expenses may have trouble balancing cash-flows of such a largeoperation. The staff may show dishonesty. They should try to pay much

attention towards their cash flow, and audit there statements on regular

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ST ANALYSIS

In many countries Pepsi had more expensive products than Coke; such ahigh price may limit a lower income family from buying a Pepsi product,therefore which is a big threat for Pepsi that may Pepsi have to face in thefuture.

Pepsi is a foreign company therefore they have a big threat every time on

them of Political instability and civil unrest.

The whole culture and business operating environment at Pepsi-Cola-West Asia has quick access to a centralized database and they usecomputers as business tools for analysis and quick decision making.Computer breakdowns, viruses and hackers can reduce efficiency, and

must constantly update products or other competitors will be moreadvanced.

Continuous efforts to research trends an reinforce creativity, if they fail intheir efforts then there is a big threat for the company. The competitors mayget benefit by their plans.

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SO ANALYSIS

The whole culture and business operating environment at Pepsi-Cola-West

Asia has quick access to a centralized database and they use computers asbusiness tools for analysis and quick decision making. Internet promotion suchas banner ads and keywords can increase their sales, and more computerizedmanufacturing and ordering processes can increase their efficiency and thatwill become such a big opportunity for Pepsi.

Large No. of diversity businesses is also its main strength as it ahs diversityin many businesses such as Pepsi beverages, Pepsi foods, PepsiRestaurants, and due to large number of diversity they can capture morecustomer, therefore it will become such a big opportunity for Pepsi.

Pepsi is also a reputable organization, and is well known all over the world.

Perception of producing a high quality product and strength can become a bigopportunity for Pepsi if they use it in well arranged manner, such as advertisingmore and also by conducting concerts to attract more customers.

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THANK YOU

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ACKNOLEDGEMENTS

MR. SURAJ PRAKASH MY TEAM MEMBERS ( Kanchan, Zeeshan,

Ronak, Akash, Shoumitro )

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BIBLIOGRAPHY

http://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinks

http://pepsicoindia.co.in/company.html

www.wikipedia.com

www.google.com

Strategic management concepts and cases :Fred R David

http://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://pepsicoindia.co.in/company.htmlhttp://www.wikipedia.com/http://www.google.com/http://www.google.com/http://www.wikipedia.com/http://pepsicoindia.co.in/company.htmlhttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinkshttp://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinks