PepsiCo’s Diversification

Strategy in 2014Anika Rahman

ID: 53; 52D

Business Model Canvas of PepsiCo

Key Partners Distributors Food and

beverage Manufacturers worldwide

International Food & Beverage associations

Customers Media

Companies

Key Activities Bottling Distribution Producing Marketing

Value Propositions Nutritional foods

and beverages   

Customer Relationships Healthy snack

and beverage provider

Customer Segments Enterprises Young worldwide Common people Athletes

Key Resources Product Brand Employees Partner & Retail

Network

Channels Advertisements Global Sales

Cost Structure Marketing tools Designing of products Ingredients and materials

Revenue Streams Product Sales Bulk sales

Global Organization Chart

PepsiCo

PepsiCo American

Food (PAF)

FritoLay North

America

Quaker Foods North

America

Latin America Foods

PepsiCo American Beverages

(PAB)

Pepsi America Bottling

Pepsi Bottling Group

PepsiCo Internation

al (PI)

UK and Europe

Middle East, Africa

and Asia

Products of PepsiCo

18 Mega Brands

Each $1 Billion or more

Pepsi Cola

Gatorade

Diet Pepsi

Doritos

Quaker Foods

7 UP

Aquafina

Tostitos

Walkers Potato Crisps

$0 $5 $10 $15 $20

PepsiCo Mega Brands: Revenue by

Product(billions)

Milestones: Diversifications 1965: Merger of Pepsi cola and Frito Lay; Named PepsiCo Inc.

1977: Pepsi acquires Pizza Hut & Taco Bell

1986: Pepsi Cola acquires Mug Root beer

1989: PepsiCo acquires Walkers, UK

1990: Acquires Gamesa, Mexico

1991: Joint venture withUnilever tea based drinks

1994: Partnership with Starbucks Ready drink coffee

1998: Acquires Tropicana

2001: Merger with Quaker Oats

2010: Acquire Wimm-Bill-Dann, Russia

Financial Highlights (2014)

2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

10000

20000

30000

40000

50000

60000

70000

Continuous Increase in Net Revenue (million)

Financial Growth ( Division-wise) in 2014

21%

4%

13%

32%

21%

10%Frito-Lay North AmericaQuaker Foods North AmericaLatin Americas FoodsPepsiCo America BeveragesEuroPeAsia, Middle East, Africa

Competitor Analysis

PepsiCo

Dr Pepper

Coca cola

Competitor Analysis: Global Ranking in 2014

#2

#1

#12

Source: Bevindustry.com

41%

29%

31%

Coca-ColaPepsiCoOthers

SWOT analysis

Strength

• Extensive distribution channel

• Proactive marketing campaigns

Weakness

• Low price

• Weak brand awareness

Opportunities

• Increasing demand for healthy foods

Threats

• Change in customer taste

PEST Analysis

Following the regulations and

policies of different markets

Expensive labour in

some countries

Advertising based on

understanding the local society

Advanced techniques applied in

manufacturing

Planet

People

Profit

Triple Bottom Line

Competitive Advantage

People: Food and beverage to wide range of customersProfit: Continuous financial growth Planet: Maintaining sustainable environment

Key Takeaways Strategic fits between the operations of new acquisitions and its other businesses' has been maintained

Achieving the greatest possible economies of scale

Shared market research information among divisions to develop new product

Synergies among its business units generated approximately $ I billion annually in productivity

Built value to their shareholders by providing highest dividend

Thank You!