AntonDeepesh

Mon CRineesh

School of Management Studies National Institute of Technology,Calicut

History• PepsiCo, Inc. was established through the merger

of Pepsi-Cola and Frito-Lay. • Pepsi-Cola was created in the late 1890s by Caleb

Bradham, a New Bern, N.C. pharmacist. This Inc. was formed by the 1961 merger of the Frito Company, founded by Elmer Doolin in 1932, and the H. W. Lay Company, founded by Herman W. Lay, also in 1932. Herman Lay became chairman of the board of directors of the new company; Donald M. Kendall, president and chief executive officer.

• The new company reports sales of $510 million and has 19,000 employees.

It includes widely known brands, innovative products, and powerful market skills.

PepsiCo serves 200 countries and is a world leader in providing food and beverage products

Now..

1966: Doritos is introducedPepsi enters Japan and Eastern Europe. 1970:PepsiCo moves from New York City to new world headquarters in Purchase, N.YPepsi is the first company to respond to consumer preference with lightweight, recyclable, plastic bottles. 1977:PepsiCo acquires Pizza Hut, Inc 1978:Taco Bell 1980:PepsiCo Food Service International (PFSI) is formed to focus on overseas development of restaurants. 

Growth

 1982:Pepsi Free and Diet Pepsi Free, the first major brand caffeine-free colas, are introduced.Inauguration of the first Pepsi-Cola operation in China. 1985:PepsiCo is now the largest company in the beverage industry. The company has revenues of more than $7.5 billion, more than 137,000 employees. Pepsi-Cola products are available in nearly 150 countries and territories around the world. Snack food operations are in 10 international markets. 1986:PepsiCo purchases 7Up International, the third largest franchise soft drink operation outside the United States. 1993:Pepsi-Cola introduces Aquafina bottled water into test market. 1996:Pepsi-Cola launches Pepsi World at www.pepsiworld.com

Growth Cont.

At PepsiCo, we aim to deliver top-tier financial performance over the long term by integrating sustainability into our business strategy, leaving a positive imprint on society and the environment. We call this Performance with Purpose.

Our Vision

As one of the largest food and beverage companies in the world, our mission is to provide consumers around the world with delicious, affordable, convenient and complementary foods and beverages from wholesome breakfasts to healthy and fun daytime snacks and beverages to evening treats. We are committed to investing in our people, our company and the communities where we operate to help position the company for long-term, sustainable growth.

Our Mission

PepsiCo, in association with smaller brands, offers a wide variety of products from beverages to snacks at low cost.

Proposed Vision

Our mission is to be the world's premier consumer products company focused on convenient foods and beverages through stores as well as our website. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity. Our mission covers :

Proposed Mission

1. Customer2. Products or Services3. Markets4. Technology5. Concern for survival, profitability, and growth6. Philosophy7. Self-Concept8. Concern for public image9. Concern for employees

Internal Assessment

1. Strong brand equity 2. Well-known worldwide3. Innovating company 4. Ethical, socially responsible, and sustainable company5. Strong advertising company with more than 40 slogans and songs6. PepsiCo as the largest part of the market share after Coca-Cola7. PepsiCo owns a wide variety of smaller brands which able them to offer a large product range from beverages to snacks

Strengths

1.PepsiCo production is really expensive because of the need to constantly develop new products to meet the changing customers demands2. PepsiCo is experiencing a lack of focus towards Pepsi sodas3. PepsiCo is experiencing product recalls4. PepsiCo has a low employment productivity and a weak distribution5. PepsiCo depends too much on the US market6. PepsiCo is far behind Coca-Cola in the international market

Weaknesses

Key Internal Factors Weights RatingWeighted

Score0.0 to 1.0 1, 2, 3 or 4

Internal Strengths 3 or 4Strong brand equity   0.12 4 0.48Well known worldwide 0.06 4 0.24PepsiCo owns a wide variety of smaller brands which able them to offer a large product range 0.08 4 0.32Innovating company 0.08 4 0.32Ethical, socially responsible, and sustainable company 0.05 3 0.15Strong advertising company with more than 40 slogans and songs 0.07 3 0.21PepsiCo as the largest part of the market share after Coca-Cola 0.06 4 0.24Internal Weaknesses 1 or 2PepsiCo production is really expensive because of the need to constantly develop new products to meet the changing costumers demands 0.05 2 0.1PepsiCo is experiencing a lack of focus towards Pepsi 0.06 2 0.12PepsiCo is experiencing product recalls 0.12 1 0.12PepsiCo has low employment productivity and a weak distribution 0.08 1 0.08PepsiCo depends too much on the US market 0.08 2 0.16PepsiCo is far behind Coca-Cola in the international market 0.09 2 0.18Totals 1 2.72

IFE

Financial Ratios

Income Statement

Organizational Chart

Proposed Organizational Structure

Website

External Assessment

1. Opening in market for less costly products2. Growth opportunities in developed countries as well as international non-established countries 3. Pepsi recently reacquired ownership of its two largest bottlers, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS)4. Compete in more than one industry (non-alcoholic beverage industry, the salty or savory snack food industry, and the breakfast food industry)5. Growth in the carbonated drink market is the largest in Asia and Europe6. The world's demand is experiencing a growth with the sports drinks, bottled water, and energy drinks

Opportunities

1. Fierce competition from Coca-Cola, which owns the largest piece of the market share2. The downturn in economy, which lead customers to shift away from bottles of water to tap water.3. Because of the recession, customers are finding cheaper alternatives to the national brands.4. Customers are getting more conscious and concerned about their eating habits and general health. 5. Campaign against plastic containers has impacted the sale of bottled beverages 6. Highly dependent on supplies of clean water, to prevent contamination

Threats

Key External Factors Weights RatingWeighted

Score

  0.0 to 1.0 1 to 4  

Opening in market for less costly products 0.05 2 0.1

Growth opportunities in developed countries as well as international unestablished countries 0.08 3 0.24

Pepsi recently reacquired ownership of its two largest bottlers, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS) 0.05 1 0.05

Compete in more than one industry (non-alcoholic beverage industry, the salty or savory snack food industry, and the breakfast food industry) 0.13 4 0.52

Growth in the carbonated drink market is the largest in Asia and Europe 0.09 3 0.27

The world's demand is experiencing a growth with the sports drinks, bottled water, and energy drinks. 0.13 4 0.52Threats     0

Fierce competition from Coca-Cola, which owns the largest piece of the market share 0.12 4 0.48

The downturn in economy, which lead customers to shift away from bottles of water to tap water. 0.05 2 0.1

Because of the recession, customers are finding cheaper alternatives to the national brands. 0.1 3 0.3

Customers are getting more conscious and concerned about their eating habits and general health. 0.09 4 0.36

Campaign against plastic containers has impacted the sale of bottled beverages 0.05 2 0.1

Highly dependent on supplies of clean water, to prevent contamination 0.06 2 0.12Totals 1   3.16

EFE

Critical Success factors Weights Rating Weighted Score Rating Weighted Score Rating Weighted Score0.0 to 1.0 1 to 4 1 to 4 1 to 4

0 0 0Advertising 0.12 4 0.48 4 0.48 3 0.36Price Competitiveness 0.11 3 0.33 3 0.33 2 0.22Product Diversity 0.1 4 0.4 4 0.4 3 0.3Market Share 0.1 3 0.3 4 0.4 2 0.2Company Image 0.12 3 0.36 4 0.48 3 0.36Customer Loyalty 0.12 4 0.48 4 0.48 3 0.36Financial Position 0.09 3 0.27 3 0.27 2 0.18Sales Distrubution 0.08 2 0.16 4 0.32 4 0.32Product Quality 0.09 4 0.36 4 0.36 3 0.27Global Expansion 0.07 3 0.21 4 0.28 3 0.21Totals 1 3.35 3.8 2.78

Dr. Pepper Snapple GroupPepsi Co. Coca Cola

CPM

Market Share

Sales Growth

Map - Firm’s Operations

Value chain analysis of Pepsico

Strategy Formulation

SWOT Matrix

Grand Strategy Matrix

BCG MatrixPepsi-co Divisions

BCG Matrix

Space Matrix

Space Graph

IE Matrix

Balanced ScorecardArea of Objectives Measure of Target Time Expectation Primary

Responsibility Customers

1. Customer satisfaction Costumer Survey Webinars Quarterly Human Resources

Representatives 1. Improve production

efficiency Increase in production Biannually Supply chain

Operations

2. Offer employee trainings Employee surveys Production efficiency Yearly Human Resources

Community/ Social Responsibility

1. Eco-Friendly company

Increase in recyclable bottle Being involve in

more events regarding water contamination

Yearly CEO

2. Ethical Company

Number and success of charitable events UNICEF amount of

money donated

Yearly CEO

Operations/Processes

1. Innovation

New products

Product appearance Acquisition of new

brands

Yearly CEO

2. Brand expansion

Numbers of new countries entered

Number of sales in the International

Segment

Yearly CEO

Financial

1. Reduce cost of production Income Statement Quarterly Chief Financial Officer

2. Increase profitability Increase annual report Quarterly Chief Financial Officer

Strategic Plan

Market development is a strategy that PepsiCo should apply by expanding in countries that not already established.

Use forward integration to acquire smaller companies in foreign markets to increase their market share.

Product development and related diversification should also be considered while trying to produce and distribute healthier products.

Strategy

Capture more of the aging population’s market share.

Increase production and distribution of carbonated drinks in Asian and European countries.

Expand more into social benefits, especially for those in developing nations.

Recommendations

Increase funds for R&D in order to research potential new product ideas.

PepsiCo should expand into Africa to make use of the international market they are not part of.

PepsiCo should cut their expenses by a set percentage every quarter in order to increase their Net Income each quarter and year.

Contd...

THANK YOU

Questions?