Swot Analysis: Pepsi
SWOT Analysis: PepsiCo Diversification Strategy in 2008 Name Course Instructor Name Date
PepsiCo Diversification Strategy in 2008
PepsiCo History
• PepsiCo is the second largest snack and beverage company in the world. Established in 1965 when Pepsi-Cola and Frito-Lay shareholders merged their salty snack icon and soft drink giant. With revenues of $500 million with popular brands such as Pepsi-Cola, Mountain Dew, Fritos, Lay’s, Cheetos, and Ruffles, they have achieved growth and long-term value in its operational activities by creating competitive advantages through new product innovation and acquisitions. Its portfolio has grown year after year with its acquisition of Tropicana in 1998, 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. Profits generating $39.5 billion in net revenues in 2007 leading to 19 products each generating $1 billion in worldwide retail revenues in 2010. Some of the most popular inclusions have been Quaker Oats, Gatorade G2, Tiger Woods signature sports drinks, Cap’n Crunch cereal, Aquafina, and Aunt Jamima pancake mix. In keeping up with consumer health and wellness concerns of reducing saturated fats, cholesterol, trans fats, and simple carbohydrates, PepsiCo created better-for-you and good-for-you products under the Power of One alliance strategy which focused on increasing customers tendency to purchase more than one PepsiCo product during each visit. A quite ingenious innovation!
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SWOT Analysis
Strengths
Branding Diversification Distribution
Weaknesses
Overdependence on Snacks & Non-carbonated drinks Large Size Low Productivity
Opportunities
Broadening of Product Base International Expansion Growing Snacks of new flavors and Bottled Water market in U.S.
Threats
Decline in Carbonated Drink Sales Potential Negative Impact of Government Regulations Intense Competition Potential Disruption
Strengths
PepsiCo Diversification Strategy in 2008
PepsiCo History
• PepsiCo is the second largest snack and beverage company in the world. Established in 1965 when Pepsi-Cola and Frito-Lay shareholders merged their salty snack icon and soft drink giant. With revenues of $500 million with popular brands such as Pepsi-Cola, Mountain Dew, Fritos, Lay’s, Cheetos, and Ruffles, they have achieved growth and long-term value in its operational activities by creating competitive advantages through new product innovation and acquisitions. Its portfolio has grown year after year with its acquisition of Tropicana in 1998, 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. Profits generating $39.5 billion in net revenues in 2007 leading to 19 products each generating $1 billion in worldwide retail revenues in 2010. Some of the most popular inclusions have been Quaker Oats, Gatorade G2, Tiger Woods signature sports drinks, Cap’n Crunch cereal, Aquafina, and Aunt Jamima pancake mix. In keeping up with consumer health and wellness concerns of reducing saturated fats, cholesterol, trans fats, and simple carbohydrates, PepsiCo created better-for-you and good-for-you products under the Power of One alliance strategy which focused on increasing customers tendency to purchase more than one PepsiCo product during each visit. A quite ingenious innovation!
•
•
SWOT Analysis
Strengths
Branding Diversification Distribution
Weaknesses
Overdependence on Snacks & Non-carbonated drinks Large Size Low Productivity
Opportunities
Broadening of Product Base International Expansion Growing Snacks of new flavors and Bottled Water market in U.S.
Threats
Decline in Carbonated Drink Sales Potential Negative Impact of Government Regulations Intense Competition Potential Disruption
Strengths
References: PepsiCo, (n.d.). PepsiCo. Retrieved from http://www.pepsico.com/ on December 12, 2012 PepsiCo, (n.d.). PepsiCo. Retrieved from http://www.pepsico.com/Download/PepsiCo_Quick_Facts.pdf on December 12, 2012 Bary, A., (2011). Don 't Rule Out a Pepsi Breakup Yet. Barron 's, 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 Management: The Quest for Competitive Advantage. (2nd ed.). New York: McGraw-Hill