Matrixes analysis of Pepsico (Final project of managerial policy (computerized)

Prepared By: Muhammad Yasir

FINAL PROJECT

SUBMITTED TO:

MS. SABA GULZAR

SUBMITTED BY:

KHALID IQBAL (7316)

SARMAD MALIK (7320)

ZAIN AHMED KHAN (7402)

MUHAMMAD YASIR (7317)

MUHAMMAD USMAN BASHIR (7318)

TOPIC:

THE INPUT, MATCHING AND DECISION STAGE OF

PEPSICO

COURSE:

MANAGERIAL POLICY

(B5402)

DATE OF SUBMISSION:

30 – DEC - 2013


Table Of Contents

S.No. Page No.

1 Introduction 03

2 I.F Evaluation 04

3 E.F Evaluation 05

4 SWOT Matrix 06

5 SPACE Matrix 07

6 BCG Matrix 09

7 I.E Matrix 11

8 GRAND STRATEGY Matrix 12

9 QSP Matrix 14


ACKNOWLEDGEMENT

First of all we would like to thank ALLAH the Almighty who blessed us with the

cognitive abilities and the ability to comprehend, understand and analyze complex

things.

We would also like to extend our gratitude to our teacher Ms. Saba Gulzar who

was a source of inspiration and knowledge throughout this semester and who

helped us greatly in understanding the different concepts related to managerial

policy.

We are also thankful to all our respondents, for sharing their opinions with us.

Their valuable input has helped us a lot in giving this Project its present shape.


Introduction to PepsiCo

PepsiCo serves 200 countries and is a world leader in providing food and

beverage products. Its brands consist of Frito-Lay North America, PepsiCo

Beverages North America, PepsiCo International and Quaker Foods North

America. Some of PepsiCo's brands are over 100 years old, however the

company was only founded in 1965 when Pepsi-Cola merged with Frito-

Lay.

PepsiCo then attained Tropicana and Gatorade when they merged with

the Quaker Oats Company. The combined retail sales average about $92

billion. The company is focused on being the premier producer in supplying

the world with convenient foods. They offer a wide variety a food options as

well, including healthy options.

PepsiCo stands out as a company because of its sustainable advantage. It

includes widely known brands, innovative products, and powerful market

skills. The company also tries to benefit the community. To make

themselves a sustainable company, they have put a focus on the

environment and benefiting society with their business. Recently, PepsiCo

released information of their plan to drive sustainable water practices and

improve rural water in Africa, China, India, and Brazil.

Public Relations people have great opportunities to improve the company's

reputation because of the size and financial stability of the company.

PepsiCo is extremely well known in the world as a leading source of food

and beverage products with immense revenue.


(IF EVALUATION)

S.No

STRENGTH

Weightage

Rating

Total Weightage

Score

01

Brand Image 0.15

4

0.60

02

Strong Advertising

0.10

3

0.30

03

Effective Distribution Channel 0.10

3

0.30

04

Diversified SBU’S 0.05

4

0.20

05

Focused of food Items

0.10

4

0.40

WEAKNESSES

01

Low Productivity

0.05

1

0.05

02

Loss in Beverages

0.10

2

0.20

03

Mkt Share Less than Coke

0.15

2

0.30

04

Huge Expenditure on Advertising

0.10

1

0.10

05

Increase Revenue in Snakes products than Beverages

0.10

2

0.20

Total

1.00

2.65

Interpretation: Pepsi has a total wieghtagae score is 2.65 Indicating that firm is in

above average performance


(EF EVALUATION)

S.No

OPPORTUNITIES

Weightage

Rating

Total Weightage

Score

01

Using Brand Image Diversification 0.10

2

0.20

02

Youth Preference For Beverages

0.05

3

0.15

03

Increasing Demand in Juice 0.05

2

0.20

04

Striving for Acquisition & Alliances 0.15

1

0.15

05

Expand Non Cola Business

0.10

1

0.10

THREATS

01

Health Issues

0.15

4

0.60

02

Competitors

0.10

1

0.10

03

Govt Regulation/ Policies

0.05

4

0.20

04

Change in Consumer preference & Taste

0.05

3

0.15

05

Increasing Demand of energy drinks

0.20

2

0.40

Total

1.00

2.50

Interpretation: Pepsi has a total wieghtagae score is 2.5 in EFE. Indicating that firm is

in above average.


(CP MATRIX)

Factors

Weightage

Rating

Total Score

Rating

Total Score

Rating

Total Score

Mkt Share 0.20 3 0.60 4 0.80 2 0.40

Cost Reduction 0.15 4 0.60 3 0.45 1 0.15

Distribution Channel 0.15 3 0.45 4 0.60 2 0.30

Pricing Strategy 0.10 3 0.30 3 0.30 2 0.20

Competitive 0.05 2 0.10 3 0.15 3 0.15

HRM 0.10 3 0.30 2 0.20 1 0.10

CRM 0.05 3 0.15 4 0.20 2 0.10

Product Portfolio 0.20 2 0.40 3 0.60 1 0.20

Total 1.00 3.05 3.35 2.55

Interpretation: The result of CPM is among 3 Beverages companies

Pepsi, Coke and Pakola is:

Pepesi > 3.05 Coke > 3.35 Pakola > 2.55 ALL companies’ total result is above average.

PEPSI COKE PAKOLA


(SWOT Matrix)

Internal

External

Strength

1 Brand Image 2 Strong Advertising 3 Effective Distribution Channel 4 Diversified SBU’S 5 Focused on Food Items 6 Ownership of Botteler 7 Acquistion & Alliances 8 Strong Financial Position

Weaknesses

1 Low productivity 2 Pepsi’s strategies overtaken by coke in Pakistan. 3 Huge Expenditure on Advertising 4 Mkt Share Less than Coke

5 Increase Revenue in Snakes products than Beverages

6 Loss in Beverages

Opportunities 1 Using brand image diversification. 2 Youth preference for beverages. 3 Invest in Russian & China mkts. 4 Expand business in non cola products. 5 Increasing demand in juice. 6 Social status of middle class.

(SO)

1 Strong advertising increases the youth preferences for beverages (s2, o2) 2 Invest in Russia and china mkts was possible because of effective distribution channel.(s3, 03) 3 By taking an advantage of diversification we should have to more diversified in term of brand image (s4, o1)

(WO)

1 Using more brand/product diversification in division wise it can minimize the expenditure on adv and will increase the product portfolio.(w3,01) 2 Expand more business & introduce more non cola products and should increase the productivity(w1 04)

Threats 1 Health Issues 2 Competitors 3 Govt Regulation/Policies 4 Change in consumer preference & taste. 5 Declined demand of carbonated drinks.

(ST)

1 Brand image is the strongest way to remove or hide health issues (s1 t1) 2 We have strong financial position & own distribution channel network. We can compete to our competitors easily by taking advantage of strong financial position, (s3.8, t2)

(WT)

1 Ist we should resolve the health issues as compare to less mkt share we should invest in health department and resolve the issue (w4, t1) 2 Should decrease the huge expenditure on advertising & invest on carbonated drinks to again increase the demand of carbonated drinks. (w3, t5)


SPACE MATRIX

Financial Position Stability Position Liquidity 4 Demand Variability -1 Cash Flow 5 Price Range -1 ROI 4 Barriers to entry -1 Earning per share 4 Inflation -1 Average : 4.25 Average: -1

Competitive Position Industry Position Market share -2 Ease of entry 6 Product quality -3 Growth potential 5 Consumer loyaly -3 Financial stability 4 Over suppliers -3 Profit margin 5 Average: -2.75 Average: 5

Y-axis FP+SP = 4.25+ (-1) = 3.25 X-axis CP+IP = -2.75 + 5 = 2.25


SPACE MATRIX


Action Plan/Interpretation:


BCG MATRIX

Divisions of PepsiCo:

1. Frito-Lay North America (FLNA) 2. Foods North America (QFNA) 3. Latin American food and snack businesses (LAF) 4. PepsiCo Americas Beverages (PAB) 5. Middle East Asia and Africa (MEAA). 6. United Kingdom & Europe (UKEU)

Divisions Current

Year sales 2009

Last Year Sales 2008

Competitor Sales

Profit RMS IGR Sales %

Profit %

FLNA 12500 11586 18000 2960 0.6 8 28% 37%

QFNA 1905 1860 2500 582 0.7 3 4% 7%

LAF 5895 4872 9985 890 0.4 21 13% 11%

PAB 10937 11090 15000 2026 0.7 -2 25% 25%

MEAA 6435 5492 12000 810 0.5 17 14% 10%

UKEU 5600 4575 9000 665 0.6 22 14% 8%

TOTAL 43272 66485 7930


Calculations Related Market Share

1. 12500/1800 = 0.6 2. 1905/2500 = 0.7 3. 5895/9985 = 0.4 4. 10937/15000 = 0.7 5. 6435/12000 = 0.5 6. 5600/9000 = 0.6

Industry Growth Rate

1. 12500 – 11586 *100 = 08

11586

2. 1905 – 1860 *100 = 03 1860 3. 5895 – 4872 * 100 = 21 4872 4. 10937 – 11090 *100 = -2 11090 5. 6435 – 5492 *100 = 17

5492

6. 5600 – 4575 *100 = 22 4575


0.7 0.6 0.5 0.4

Divisions Quadrant Strategy FLNA Star Forward, Horizontal

QAFNA Star Forward, Backward

LAF Q.Mark Mkt Penetration & Development

PAB C.C Related Diversification

UKEU Star, Q.Mark Forward & Mkt, Prdoduct Devel.

MEEA Star Forward, Backward Integration


IE MATRIX

Divisions IFE EFE PROFIT % SALES %

FLNA 2.1 2.2 37% 28% QAFNA 2.3 2.4 7% 4%

LAF 2.3 2.6 11% 13%

PAB 2.5 2.8 25% 25% UKEU 3.2 3.1 10% 14%

MEEA 3.5 3.7 8% 14%


GRAND STRATEGY MATRIX


Interpretation:


(QSPM) S N0.

Matrix Strategies

SWOT Matrix

SPACE Matrix

BCG Matrix

IE Matrix

GRANG Matrix

Total

* Integration Strategies

1 Forward 2

2 Backward 1

3 Horizontal 2

* Intensive Strategies

4 Mkr Penetration 4

5 Mkt Development 5

6 Product Development 3

* Diversification Strategies

7 Related Diver. 1

8 Unrelated Diver. 1

* Defensive Strategies

9 Liquidation 1

10 Divestitutes 2

10 Rerenchement

11 Joint Venture


QSP Matrix Strengths: Weightage Att.

Score Total Att.Score

Att. Score

Total Att Score

Brand Image 0.15 4 0.60 3 0.45

Strong Advertising 0.10 2 0.20 2 0.20

Effective Distribution Channel 0.10 1 0.10 0 0

Diversified SBU’S 0.15 0 0 0 0

Focused of food Items 0.05 3 0.15 4 0.20

Weaknesses

Low Productivity 0.15 4 0.60 3 0.45

Loss in Beverages 0.15 3 0.45 2 0.30

Mkt Share Less than Coke 0.10 0 0 1 0.10

Huge Expenditure on Advertising

0.05 1 0.05 0 0

Increase Revenue in Snakes products than Beverages

0.05 2 0.10 2 0.10

TOTAL WEIGHTAGE 1.00

Opportunities

Using Brand Image Diversification

0.10 4 0.40 3 0.30

Youth Preference For Beverages

0.05 1 0.05 0 0

Increasing Demand in Juice 0.15 0 0 1 0.15

Striving for Acquisition & Alliances

0.15 4 0.60 0 0

Expand Non Cola Business 0.15 3 0.45 0 0

Threats

Health Issues 0.06 2 0.12 0 0

Competitors 0.04 3 0.12 0 0

Govt Regulation/ Policies 0.15 0 0 1 0.15

Change in Consumer preference & Taste

0.05 1 0.05 2 0.10

Increasing Demand of energy drinks

0.15 2 0.30 3 0.45

TOTAL 1.00 4.10 3.40

Alternate 01 Mkt Penetration

Alternate 02 Mkt Development


Action Plan: Market Penetration total attractiveness score is 4.10 and alternate 2 is 3.40 Market development and Market Penetration is a strategy that PepsiCo should apply by expanding in countries that not already established. Use forward integration to acquire smaller companies in foreign markets to increase their market share. Product development and related diversification should also be considered while trying to produce and distribute healthier products


DIVISION OF WORK

1. KHALID IQBAL(INTRODUCTION, IFE & EFE)

2. SARMAD MALIK (CPM & SWOT MATRIX)

3. MUHAMMAD YASIR (BCG & IE MATRIX)

4. MUHAMMAD USMAN (SPACE, GRAND MATRIX)

5. ZAIN AHMED KHAN (Q.S.P.MATRIX)

Matrixes analysis of Pepsico (Final project of managerial policy (computerized)

Business

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