Pepsico Diversification Strategy

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16 October 2012 Draft v1

Seitenzahlen einfügen, Inhaltsverzeichnis einfügen

Pepsico’s Diversification Strategy in 2008
Discussion material
16 October 2012

16 October 2012 Draft v1

Contents
Seitenzahlen einfügen

Sections 1 2 3 4 5 6 7 Project Team Our understanding of PepsiCo Market / Industry analysis Financial analysis Portfolio analysis Recommendations Q&A

1

16 October 2012 Draft v1

2.1 PepsiCo
Overview
Overview
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Acquisitions
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Formed in 1965: merger Pepsi-Cola Company & Frito-Lay Inc. America mulinational food & beverage corporation Headquartered in United States, NY Manufacturing marketing & distribution of: –  grain-based snack foods –  salty snacks –  beverages

1980‘ & 1990s Mug root beer, 7up International Smartfood, Walker‘s Crisps, Smith‘s Crisps, Mexican cookie company, Gamesa & Sunchips Late-1970s – mid 1990s PepsiCo expanded via acquisition of businesses outside of its core focus of packaged food and beverage brands –  1977: Pizza-Hut –  1978: Taco Bell –  1986: Kentucky Fried Chicken

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Expanded to broad range of food & beverage brands Organized in 4 different Business Units Many tuck-in acquisitions (companies all located in non-US) of in 2006 & 2007 It holds 285,000 employees New CEO in 2007: Indra Nooyi Strategic Realignment in 2008

Quick-service restaurants: –  1990: Hot-n-Now –  1992: California Pizza Kitchens –  1993: East Side Mario‘s, D‘Angelo Sandwich Shops, Chevy‘s n 

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1997 Spin-off of the restaurants as independent traded company –  1997: Cracker Jack, –  1998: Tropicana, Smith‘s Snackfood –  2001: Quaker Oats (incl. Gatorade) –  2006: Stacy‘s bagel and pita chips, Izze carbonated beverages, Duyvis nuts, Star Foods à total: $ 522 million

Further acquisitions:

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2007 Naked Juice fruit beverages, sandora juices, bluebird snacks, Penelopa nuts and seeds Joint venture with Strauss Group Total acquisition between 2005-2007 amounted to $2.92bn

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16 October 2012 Draft v1

2.2 PepsiCo
Structure

Fritolay North America

The PepsiCo Beverage North America

PepsiCo International

Quaker Foods North America

PepsiCo operates over 155 different brands under one roof

16 October 2012 Draft v1

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2.3 Corporate strategy

Innovation

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New product innovation

Strategic partnerships

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Close relationships with distribution allies and international expansion

Growth

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Strategic acquisitions

Health trend

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Make snack foods and beverages less unhealthy à “good-for-you” or “better-for-you” Product line

Diversification

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Diversified businesses in snacks and drinks industry à 155 brands à Power Of One

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2.4 SWOT analysis

SWOT analysis

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High market share Strong brand portfolio Number one marketshare of snacks Broad diversified business units: skill-transfer & cost-sharing Strong growth in revenues and profits Successful acquisitions & implementation ‘Power of one’ strategy Strengths Weaknesses

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Quaker brands lack of success International market share low (>< CocaCola) No corporate name on all Pepsi Brands

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Changing social trend Sharing distribution channels Economies of Scale through global Organisation Focusing on non-carbonated market Growing bottled water market Following acquisition strategy exploit on US market

Opportunities

Threats
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Restructuring cause maybe internal instability High competition Government regulations Environmental affair PET Bottles Decline in Carbonated Drink sales

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2.5 BCG-Matrix
Example of brand assessment

Market growth

Question mark
Quaker Oats

Star
Gatorade

High

Rice-a-Roni

Frito-Lay

Low

Dogs
Low

Cash Cows
High
Relative market share

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3. Market /...
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