'Swot Analysis: Pepsi\r'

' jampack psychoanalysis: PepsiCo Diversification Strategy in 2008 bring up Course Instructor Name accompaniment PepsiCo Diversification Strategy in 2008 PepsiCo invoice • PepsiCo is the second largest raciness and beverage gild in the world. Established in 1965 when Pepsi-Cola and Frito- send sh atomic matter 18holders incorporate their salty snack icon and daft befuddle giant. With revenues of $500 million with popular grades such(prenominal) as Pepsi-Cola, Mountain Dew, Fritos, Lay’s, Cheetos, and Ruffles, they stupefy achieved growth and long-term measure pop in its operational activities by creating militant advantages through saucy product origination and acquisitions.\r\nIts portfolio has gr suffer course of instruction after year with its acquisition of Tropicana in 1998, devil largest bottlers (Pepsi Bottling root/PepsiAmericas) in 2010 and Wimm-Bill-Dann (dairy products) in 2011, and the unification with champion Oats in 2001. Profits gene rating $39. 5 jillion in net revenues in 2007 track to 19 products each generating $1 meg in worldwide retail revenues in 2010. Some of the most popular inclusions have been Quaker Oats, Gatorade G2, Tiger Woods jot sports draws, Cap’n Crunch texture, Aquafina, and aunty Jamima pancake mix.\r\nIn keeping up with consumer wellness and wellness concerns of reducing virginal fats, cholesterol, trans fats, and simple carbohydrates, PepsiCo created better-for-you and good-for-you products under the Power of mavin totallyiance strategy which foc employd on increasing customers tendency to purchase more than sensation PepsiCo product during each visit. A quite ingenious innovation! • • SWOT Analysis Strengths Branding Diversification dissemination Weaknesses Overdependence on Snacks & Non-carbonated drinks Large Size meek Productivity\r\nOpportunities Broadening of Product footstall world(prenominal) Expansion Growing Snacks of sensitive flavors and Bottled pissing mart in U. S. Threats castigate in change Drink gross sales authorisation Negative Impact of authorities Regulations yearning Competition Potential hoo-ha Strengths Branding • PepsiCo’s top distinguish is its most recognized brand in the world, Pepsi, followed by its 155 varieties of Frito-Lay, PepsiCo beverages, Tropicana, Gatorade, and Quaker Oats brands.\r\n closely PepsiCo brands reached minute ace or two directs in their respective categories and has â€Å"24 otherwise ball-shaped and topical anaesthetic brands with annual retail sales ranging from $250 million to $1 billion, including Sobe, Naked, antiophthalmic factor Energy, Propel Zero, Sabritas, Gamesa, Lebedyansky, Aunt Jemima and Rice? A? Roni . ” (PepsiCo website) In2008, Frito-Lay was the top manageing chip brand in the U. S. and Propel Fitness Water was the leading brand of enjoymentctional body of water; In 2007 it was Gatorade, propel, and Aquafina with a 7 6 per centum market sh atomic number 18.\r\nThree initiatives leading the diligence were â€Å" convenience, a growing awareness of nutritionary content of snack food for thoughts, and indulgent snacking. ” (Gamble & Thompson, 2012, pg. 426) The skill of these brands is evident in PepsiCo’s presence in 200 countries and proven in it’s 2007 net revenues of $39. 5 billion globally and annualized revenues of $60 billion in 2010. (PepsiCo website) The beau monde has the largest market share in the US beverage at 39%, and snack food market at 25%.\r\nSuch brand control insures loyalty and repetitive sales. • Diversification • PepsiCo’s diversification non single integrates snacks (chips), ready-to-drink teas, succus drinks, flavored/bottled water, as well as breakfast cereals, cakes and cake mixes, but its brands are catered to its supranational franchise such Crujitos corn snacks, Fruko beverages, and Crueslic cereal sold in the UK , Europe, Asia, Middle East, and Africa.\r\n entirely the several(a) products plus a multi-channel dispersion system, and its 300,000 team of professionals that thrive on collaborationism and respect were led by ternion CEOs (Enrico, Reinemund, Nooyi); all of which served to insulate PepsiCo position as the â€Å"world’s second largest food and beverage problem”. (PepsiCo website) Distribution • The company delivers its products through direct-store-delivery (DSD) from manufacturing plants and warehouses to customer warehouses and foodservice and vending dispersion networks to retail stores. PepsiCo website) These delivery options allow maximal visibility and appeal (DSD), be savings for fragile/perishables with lower turnover (customer warehouse), and the use of third party distribution serve (foodservice/vending) to schools, stadiums and restaurants reducing stock-outs. All are ground on â€Å"customer call fors, product characteristics, and topica l anaesthetic trade practices”. (PepsiCo website) Weaknesses\r\nOverdependence on Snacks and Non-carbonated drinks • PepsiCo failed to strain on its main brand, Pepsi. Although sales of carbonated drinks was enormous his, it was carried by it’s non-carbonated which subjoind revenues 5 per centum; consequently, carbonated revenues dropped 3 percent the same year, 2007. • The company focused on more healthy products by exhausting to develop current sweeteners and getting Izze mildly carbonated sparkling fruit drinks in 2007. It failed to strengthen its position in the U.\r\nS. to out beat Coca-Cola and lagged 10 percent in 2007; bumping PepsiCo to the number two position of nonalcoholic beverage producer. (Gamble & Thompson, 2012, pg. 430) Large Size • despite its international presence, 48 percent of its revenues climb in the US. (Gamble & Thompson, 2012, pg. 431) This leaves PepsiCo vulnerable to the impact of ever-changing econom ic conditions. Large US customers could solve PepsiCo’s lack of bargaining strength and blackballly impact revenues. Acquisition of pizza Hut, Taco Bell, and KFC initially proved dear but continued growth in snack food and beverage acquisitions deemed its strategic-fit realises animate between restaurants and its core beverage and snacks were problematical to capture. Benefits were offset by fast-food industries fierce charge competition and low lolly margins. (Gamble & Thompson, 2012, pg. 423) • â€Å"Its pry chain consists of 230 plants, 3,600 distribution systems, and 120,000 service routes roughly the world. (Gamble & Thompson, 2012, pg. 436) Low Productivity • Low profit margins on PepsiCo’s international business demanded the need for a red-hot organizational structure leading to the 2008 realignment creating a terce division structure under one roof with six reporting segments: Frito-Lay north America, Quaker Foods North Amer ica, Latin American Foods, PepsiCo Americas Beverages, United Kingdom & Europe, and Middle East, Africa & Asia. (Gamble & Thompson, 2012, pg. 36) In an article from the Dow Jones & Company, dated 21 November 2012, it reports a disappointing year for Pepsi and the speculation that PepsiCo may be reconsidering its refusal to create separate global snacks and beverage companies. ” (Proquest) Opportunities Broadening of Product mingy • PepsiCo seized opportunity of potential weaknesses by acquiring Mexico’s largest Pepsi bottler, Pepsi-Gemex SA de CV, for $1. 26 billion bang-upizing Mexico’s number one producer of purified water. (Gamble & Thompson, 2012, pg. 34) In attachment, the two largest bottlers (Pepsi Bottling Group/PepsiAmericas) in 2010 and Wimm-Bill-Dann (dairy products) in 2011, and the merger with Quaker Oats in 2001. • It continues to extend its product base by introducing what consumers deficiency most: Health ier snacks and drinks, convenient snack size portions, and introducing multiple flavors to the postulate of various cultures. These initiatives will enable PepsiCo to adjust to the changing lifestyles of its consumers and appeal to its international customer base.\r\nInternational Expansion • PepsiCo is focused on expanding Gatorade into 15 renderitional countries, Tropicana into 20 new markets, and Lipton into quint international markets in 2012. (Gamble & Thompson, 2012, pg. 434) Its expansion into international markets and a lessening its dependence on US sales in addition to the company plans on major capital initiatives in China will increase their global customer base. Growing Snacks of new flavors and Bottled Water market in US • Products such as Aquafina, and Propel are well established products and in a position to ride the upward crest.\r\nPepsiCo products such as, Doritos tortilla chips, Cheetos cheese flavored snacks, Tostitos tortilla chips, Ruffles potato chips, Sun Chips multigrain snacks, Rold funds pretzels, benefit from a growing hot snack markets.. Threats Decline in Carbonated Drink Sales • Soft drink sales have decline by as much as 2 percent from 2005 to 2007 due to a health conscience society. Fruit beverages went down fairly and others stayed relatively the same. The future state of the thriftiness and additional emphasis on health could drive these numbers in the negative direction.\r\nPotential Negative Impact of organisation Regulations • Manufacturing, marketing, and distribution of food products may be altered as a expiry of state, federal or local dictates. In 2000, PepsiCo experienced FTC setbacks due to concerns over the merger of Gatorade and that it might give the company also much leverage in negotiations with convenience stores. The FTC stipulated that PepsiCo could non jointly distribute Gatorade with aristocratic drinks for 10 years. (Gamble & Thompson, 2012, pg. 423) This could have set them so far ahead of their number one competitor to stay number one.\r\n at that place’s also been talk about the ingredient, acryl amide, suggesting it could cause cancer if consumed in large amounts in rats. If the company has to comply with a related regulation or add warning labels, it could have negative impacts. screaming(prenominal) Competition • The Coca-Cola Company is PepsiCo’s master(a) competitors. Intense competition may trance pricing, advertising, sales promotion initiatives undertaken by PepsiCo. Potential Disruption • The sparing is unstable and good deal are berth back on spending.\r\nAlthough people regard to eat and drink healthier products, the costs to eat healthier is more expensive so the changes to chafe healthier snacks need to stay reasonable. some other potential holy terror are the generic wine brands most stores sell that appeal to the penny pincher during hard clock. Alternatives Smaller packaging â₠¬Â¢ PepsiCo could boom on making smaller portions to all their products that have high sale rates. merchandising in bulk at cheaper prices is other option for the residential and business arena.\r\nAdvertisements • farm their products through effective marketing strategies. go for internet, facebook and other resources that hit thousands at one time but isn’t expensive. Do funny advertisements like the Super bowl ones more often. These are things people return and talk about for long periods. Intense Competition • The Coca-Cola Company is PepsiCo’s ancient competitors. Intense competition may knead pricing, advertising, sales promotion initiatives undertaken by PepsiCo. The economy is unstable and people are cutting back on spending.\r\nAlthough people want to eat and drink healthier products, the costs to eat healthier is more expensive so the changes to make healthier snacks need to stay reasonable. Another potential threat are the generic brands m ost stores sell that appeal to the penny pincher during hard times Potential Disruption Due to poke Unrest †• Outsource melodic phrases to other countries to benefit their needs but provide job opportunities to people in the U. S. This provides added growth at home and abroad while not jeopardizing at home support.\r\nAssessment • PepsiCo has held their own for decades and have grown into the global market becoming diverse in the snack industry, carbonated and non-carbonated drinks, and incorporating new seasonings and spices to appeal to the local nationals. Pepsi has a large loyal class of customers that they need to stay attuned to and ensure they tender incentives for being so loyal. Offering discounts is a slap-up way to not only keep customers, but it helps gain new customers. Overall, Pepsi has achieved success and stayed in the running.\r\nAlthough they were bumped down to number two, it seems as though the take great care in addressing lessons learned a nd are not fast to make a rash decision as they Dow recently reported that I mentioned above. They have cross-communication and come out managers to keep them fresh on new initiatives and this puts fresh eyes on the property to better capture new ideas and rate potential shortfalls. PepsiCo commitment is to deliver free burning growth. They offer a wide innovation to meet the needs and preferences to satisfy fun to contributing to healthier lifestyles.\r\nIt has a unanimous foundation and is only going to hop on back to the number one position in the future. I think it needs to continue what it’s doing but not over extend themselves to where they lose focus on what started them in the first place, their number one product, the Pepsi. Which happens to be my favorite daddy! • • • References PepsiCo, (n. d. ). PepsiCo. Retrieved from http://www. pepsico. com/ on December 12, 2012 PepsiCo, (n. d. ). PepsiCo. Retrieved from http://www. pepsico. om/Downloa d/PepsiCo_Quick_Facts. pdf on December 12, 2012 Bary, A. , (2011). Dont Rule Out a Pepsi Breakup Yet. Barrons, 91(47), 20. Retrieved from http://proquest. umi. com/pqdweb? index=0&did=2526832001&SrchMode=1&sid=9&Fmt=3&VInst=PROD&VType=PQD& RQT=309&VName=PQD&TS=1323732097&clientId=74379 on December 12, 2011, (Proquest Document ID: 2526832001). Gamble, J. E. , & Thompson, A. A. , (2011). Essentials of Strategic focus: The Quest for Competitive Advantage. (2nd ed. ). New York: McGraw-Hill\r\n'