Strategic Analysis of PepsiCo
Pepsi co is a carbonated beverage that is produced and manufactured by PepsiCo. It is sold in stores restaurants and from vending machines. The drink was first made in the 1890s by a pharmacist Caleb Bradham in New Bern, North Carolina. The brand was trademarked on June 16 1903.The has been many Pepsi variants over the years since 1903 to name a few they have Diet Pepsi, Crystal Pepsi, Pepsi Twist, Pepsi blue, Pepsi raw, Pepsi one etc.
PepsiCo is situated in a soft drink industry that is dominated by Coca Cola. By the time it got into the market Coca cola had already made its mark among the public and the newcomer Pepsi found it hard to find a consumer base.
Their first effective marketing strategy, they put their sodas in beer bottles and sold them cheaper than Coke. There was more drink for less money. They started selling, and Pepsi was seen as the poor man’s cola. Although this strategy worked, Pepsi recognized that if their image remained as that of the Poor Man’s Soda, their customer base would never widen. In order to improve its image, Pepsi devised a new marketing strategy by employing celebrities for its advertisements. One of their first celebrity endorser was Barney Oldfield, the pioneer for automobile racing.
Afterwards, PepsiCo dipped its marketing hands into acquiring even more business. They bought Taco Bell and Pizza Hut and exerted effort into developing overseas restaurant ventures. One of the most successful advertising and promotion campaigns in history.
• Pepsi has a broader product line and outstanding reputation. • Merger of Quaker Oats produced synergy across the board. • Record revenues and increasing market share.
• Lack of capital constraints (availability of large free cash flow). • Great brands, strong distribution, innovative capabilities • Number one maker of snacks, such as corn chips and potato chips
• Pepsi hard to inspire vision and direction for large global company. • Not all PepsiCo products bear the company name
• PepsiCo is far away from leader Coca-cola in the international market - demand is highly elastic.
• Pepsi should expand into markets that they are not currently in. • Food division should expand internationally
• Noncarbonated drinks are the fastest-growing part of the industry • Pepsi should position itself on the cutting edge of the healthy food trend in the market place by increasing trend toward • Changing customer tastes e.g. variants of drinks
• Focus on most important customer trend - "Convenience".
• Pepsi is blamed for pesticide residues in their products in one of their most promising emerging market e.g. in India • Over 50 percent of the company's sales come from Frito-Lay; this is a threat if the market takes a downturn • PepsiCo now competes with Cadbury Schweppes, Coca-Cola, and Kraft foods (because of broader product line) which are well-run and financially sound competitors. • Size of company will demand a varied marketing program; Social, cultural, economic, political and governmental constrains.
External Analysis PEST Analysis:
Political influences: - The production distribution and use of many of PepsiCo product are subject to various federal laws, such as the Food, Drug and Cosmetic Act, the Occupational Safety and Health Act. - The businesses are also subject to state, local and foreign laws. - The international businesses are subject to the Government stability in the countries where PepsiCo is trying get into (underdeveloped markets).Businesses are also subject to de taxation policy in each country they are operating. They also have to comply with federal, state, local and foreign environmental...
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