Major sports teams are currently sponsored with Pepsi products. Even with the diverse portfolio of PepsiCo, this decline in sales of carbonated soda drinks will have a negative impact on its total revenue. Shareholder Friendly: PepsiCo, while having a fair amount of debt on its balance sheet the debt-to-capital ratio is approximately 70% , generally maintains excellent finances and produces a lot of free cash flow. It identifies all the key strengths, weaknesses, opportunities and threats that affect the company the most. PepsiCo Inc Company has strengths, weaknesses, opportunities and threats. The company faces numerous challenges, to be sure, in view of the shaky economic conditions abroad and the slow deterioration of its iconic soda franchise. Some of them like the one related to the use of carcinogenic products in its drinks is also a major source of worry for the brand.
By acquiring complementary firms not in the beverage industry, the company can be able to diversify its business. It has spent a lot on improving its digital capabilities over the last 4 years. Company Background Key Facts Name PepsiCo Inc. There are many other industries that the company can venture in. First, the company has been in existence for many years and has managed to build a brand of its own. As such, the company was provided with an excellent opportunity to operate within the larger United States of America market, and this set the beginning for the globally recognized company. Gain competitive intelligence about market leaders.
An employee strength of around 300,000 people 6. The reason behind this argument is that the industry is very competitive. The stock, meanwhile, also looks to be benefiting from a rush toward dividend-paying issues against a backdrop of persistently low interest rates. Or do the large-cap shares still offer worthwhile total-return potential for the income-oriented buy-and-hold crowd? Similar, digital and other marketing campaigns run by the brand have also been highly successful. The Coca-Cola image is displayed on T-shirts, hats, and collectible memorabilia. Apart from beverages, the company also holds a market share of 56% through production and distribution of salty PepsiCo Inc operates in an oligopoly market.
When making any investment decision, it is important for a potential investor to gain insight into the company. Coca Cola is its biggest competitor and the two brands remain engaged in very tight battle which keeps raging and getting intenser. A main section, addressing your thesis. Now, the most important question before Pepsi is how to protect its image from continued assaults. With the acquisition of Tropicana in the year 1998 and merger with Quaker Oats, the company grew bigger. Customers can get a little of everything. It can also help counter the threats.
Strong and efficient supply chain network, ensuring that all the products are available even in the most remote places 9. Essentials of strategic management: The Quest for Competitive Advantage. The already existing companies have established brand loyalty and this makes it hard for new entrants to establish and enjoy competitive advantage since the customers in this market are very sensitive and they would rather buy a product that they know the manufacturer at a high price, rather than a new cheap product from a new manufacturer. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix. PepsiCo operates in almost every non-alcoholic beverage segment and faces strong competition in each product category. PepsiCo is better equipped to satisfy the needs of its customers with its wide variety of successful products.
The brand is present globally and enjoys a very high level of brand recognition. Pepsi Refresh Project that funds new ideas or ventures that have the potential to benefit the society 8. PepsiCo provides its consumers with a diverse list of products that delivers affordability and great taste. The heavy competition in the industry is adding to the pressure. Because Coke does not have outright ownership of its bottling network, its main source of revenue is the sale of concentrate to its bottlers Bettman, et.
For PepsiCo Inc the strategic plan is meant to increase productivity and efficiency. Successful penetration in multiple national markets has provided a much broader customer base from which it generates revenue while minimizing costs and increasing profits Young, 2015. A small number of dominant companies, differentiated goods and barriers to market industry are characteristics of an oligopoly market snacks. It should also focus on saving water and environmental resources. Being addicted to Coca-Cola also is a health problem, because drinking of Coca-Cola daily has an effect on your body after few years. While it has already invested a lot in these two areas, there is opportunity for more. Strategic Change, 7 2 , 101-109.
The bottling companies are locally owned and operated by independent business people who are authorized to sell products of the Coca-Cola Company. Both the strengths and weaknesses are internal to the company. The identified strengths can be built on and used to their full potential and makes can be made to reduce the weaknesses. Both digitization and IoT offer major opportunities of growth and can help its distribution network expand and become more efficient. Reports are intended to be used as guides and sources of secondary data for reference purposes. It is difficult for a new beverage company to maneuver in the industry in the presence of the well-established companies, which have been in the industry for a long time. Through our operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of convenient and enjoyable beverages, foods and snacks, serving customers and consumers in more than 200 countries and territories.
This brand portfolio can be extremely useful if the organization wants to expand into new product categories. Similar analysis has also been done for the competitors of the company belonging to the same category, sector or industry. Both units, meanwhile, benefit from economies of scale there are lots of back-office synergies , which have been more pronounced over the past few years as overhead costs have been pared. See reading on on the background page. Opportunities include the increasing spending on food in emerging markets. Moreover, the brand invests a lot in marketing as well as reputation management.
The company has not diversified its products, and it is vulnerable to risks in the food and beverage market. The reason was the state of the global economy and the strong dollar. PepsiCo also uses brand endorsements to push their products. Product Innovation: Much of the recent growth has come from new products, with the company getting a nice boost from Quaker oatmeal breakfast bars, flavored Aquafina sparkling waters, and Mountain Dew Black Label drinks. It will discuss the key PepsiCo strengths, weaknesses, opportunities and threats that affect the company in 2018, which might help you get a better understanding about the PepsiCo and its business.