PepsiCoBusiness Analysis

By: Justin Latimore

Business Policy

2/24/2013

History In 1965: PepsiCo, Inc. is founded by Donald M. Kendall,

President and CEO of Pepsi-Cola and Herman W. Lay, Chairman and CEO of Frito-Lay, through the merger:

1. Pepsi-Cola In 1898: Caleb Bradham, a New Bern, North Carolina, pharmacist, created "Brad's Drink," a carbonated soft drink he created to serve his drugstore's fountain customers.

2. Frito Company   3. H. W. Lay Company   The Major products of the companies are: Pepsi-Cola Company Fritos brand corn chips, Lay's brand potato chips, Cheetos

brand cheese flavored snacks, Ruffles brand potato chips, Rold Gold brand pretzels.

Mountain Dew

1966: Doritos is introducedPepsi enters Japan and Eastern Europe. 1970:PepsiCo moves from New York City to new world headquarters in Purchase, N.YPepsi is the first company to respond to consumer preference with lightweight, recyclable, plastic bottles. 1977:PepsiCo acquires Pizza Hut, Inc 1978:Taco Bell 1980:PepsiCo Food Service International (PFSI) is formed to focus on overseas development of restaurants.

 

Growth

 1982:Pepsi Free and Diet Pepsi Free, the first major brand caffeine-free colas, are introduced.Inauguration of the first Pepsi-Cola operation in China. 1985:PepsiCo is now the largest company in the beverage industry. The company has revenues of more than $7.5 billion, more than 137,000 employees. Pepsi-Cola products are available in nearly 150 countries and territories around the world. Snack food operations are in 10 international markets. 1986:PepsiCo purchases 7Up International, the third largest franchise soft drink operation outside the United States. 1993:Pepsi-Cola introduces Aquafina bottled water into test market. 1996:Pepsi-Cola launches Pepsi World at www.pepsiworld.com

Growth Cont.

Celebrated 75 years in Canada Was on the “Best Food for Women” list in

Women’s Health magazine Began a partnership with the NFL Won U.S. EPA SmartWay Environmental

Excellence award Became official beverage of Norwegian

Cruise Lines

2009

Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.

Mission Statement

PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today."Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.

Vision Statement

External Assessment

1. Opening in market for less costly products2. Growth opportunities in developed countries as well as international nonestablished 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 Europe6. The world's demand is experiencing a growth with the sports drinks, bottled water, and energy drinks

Opportunities

1. Fierce competition from Coca-Cola, which owns the largest piece of the market share2. 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

Threats

Market Share

Internal Assessment

1. Strong brand equity 2. Well-known worldwide3. Innovating company 4. Ethical, socially responsible, and sustainable company5. Strong advertising company with more than 40 slogans and songs6. PepsiCo as the largest part of the market share after Coca-Cola7. PepsiCo owns a wide variety of smaller brands which able them to offer a large product range from beverages to snacks

Strengths

1.PepsiCo production is really expansive because of the need to constantly develop new products to meet the changing customers demands2. PepsiCo is experiencing a lack of focus towards Pepsi sodas3. PepsiCo is experiencing product recalls4. PepsiCo has a low employment productivity and a weak distribution5. PepsiCo depends too much on the US market6. PepsiCo is far behind Coca-Cola in the international market

Weaknesses

Strategy Formulation

SWOT Matrix- Industry Environment

AnalysisSO Strategies ST Strategies WO Strategies WT Strategies (O4, S1, S2, S6, S7) Continue to offer variety or product in various brands. (O5, O2, S2) Expand and focus on the carbonated drinks and beverage segment in Asia and Europe. (O6, O4, S6, S7) Respond to the growing demand of sports drinks, bottled water, and energy drinks by expanding product market.

(T1, S1, S2, S3, S8) Innovate Pepsi product line with something that is going to differentiate us from Coca-Cola. (S1, S3, O4) Innovate products by offering healthier alternatives. (T2, T3, S3) Offer more promotions or discounts to prevent sales from decreasing. (T5, S1, S2, S4) Develop more environmentally friendly containers. (T6, S6) Support environmental issues, such as pollution, which causes water contamination.

(W2, W5, W6, O2, O5) Expand Pepsi sodas product in Europe and Asia. (W1, O4, O6) Improve their sales in the beverage segment by responding to the increasing demand for sports drinks, bottled water, and energy drinks.

(W1, T2, T5) Adjust production of bottles with downturn in economy. (W1, T3) Produce bigger size of bottles and sale them at the same price as the small one. (W3, T6) Be responsible and cautious towards supplies of water. (W1, W4, T6) Increase supply chain production by monitoring cautiously employees and improving workers training. (W5, W6, T1) Increase presence in the international market.

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Sources