PepsiCo, Inc., one of American largest food and beverage icon took its name in 1965, when Pepsi-Cola Company merged with Frito-Lay, Inc. As one of the largest food and beverage companies in the world, their 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. The author was given the task to choose two segments of the general environment that would rank highest in the influence on the corporation and to assess how these segments affect the PepsiCo. Inc., and the industry in which it operates.
Many brands and products fall under the PepsiCo umbrella. With over 22 brands generating at least $1 billion in retail sales, including Doritos chips, Quaker oatmeal, Gatorade sports drinks and Mountain Dew soda (Esterl ,2014). Less than half of PepsiCo’s sales are from the sale of soft drinks. Despite the fact that beverage sales make up less than half of all incoming revenue, PepsiCo is often seen as a soft drink manufacturer. (Trefis Team 2015).”
Bolman and Deals four frames of organizations (1997) provide a foundation to determine how an organization functions and examine how operating within a certain frame may benefit or adversely affect an organization. In analyzing PepsiCo as an organization through Bolman and Deal?s (1997) frames of organizations the key elements of the structural and human resource frames as well as a review the Strengths, Weaknesses, Opportunities, and Threats that may affect Pepsi Co as an organization will be addressed.
Diversification – PepsiCo’s diversification is obvious in that the fact that each of its top 18 brands generates annual sales of over $1,000 million. PepsiCo’s arsenal also includes ready-to-drink teas, juice drinks, bottled water, as well as breakfast cereals, cakes and cake mixes.This broad product base plus a multi-channel distribution system serve to help insulate PepsiCo from shifting business climates.
Such recognition is what informed its pursuit of the business and corporate-level strategy. One of the business-level strategies that PepsiCo has implemented is cost leadership (Ferguson, 2017). This firm usually prices its products at levels that are lower than the price buy competitors, such as Coca-Cola, because it can produce at the lower cost compared to most of its competitors. Furthermore, the company has the option of pricing the same level with competitors to generate higher profits. Through this strategy, PepsiCo has been able to enhance its financial performance. Moreover, thanks to the cost leadership strategy, PepsiCo has developed a competitive edge (Ferguson, 2017). The cost leadership strategy has allowed PepsiCo to penetrate new markets and outperform such rivals as
The net profit was $6,320 million in FY2010, an increase of 6.3% over 2009 ($5,946). As stated in the mission statement, they seek to produce financial rewards. With the numbers previously mentioned, we can see they have succeeded. This significant financial performance gives them the resources they need to provide opportunities for growth and enrichment to their employees, their business partners and the communities in which they operate and to invest in the four key areas (performance, human sustainability, environmental sustainability and talent sustainability) so they can reach their goals. (Yahoo Finance, 2011) 4. Conduct a competitive and marketing analysis of the organization to determine strengths and opportunities. PepsiCo is the largest snack and non-alcoholic drink producer in the United States, with 39% and 25% of the respective market shares. PepsiCo operates in over 200 countries, with its largest markets in North America and the United Kingdom. PepsiCo has three direct competitors, the Coca-Cola Company, Dr. Pepper Snapple Group, and Kraft Foods. Unlike its major competitor, Coca-Cola, the majority of PepsiCo 's revenues do not come from carbonated soft drinks. In fact, beverages account for less than 50% of total revenue. Additionally, over 60% of PepsiCo 's beverage sales come from its key noncarbonated brands like Gatorade and Tropicana. PepsiCo 's revenues
This case describes the complexity of PepsiCo's competitive position in the Mexican soft-drink market during the late 1990's. Between 1993 and 1996 PepsiCo and Coca-Cola waged a classic cola war in Latin America. The goal for both companies was to gain market share and by the end of 1996, Coca-Cola had clearly won the Latin America cola war. In 1993 PepsiCo enjoyed a 42% market share in Venezuela thanks to the success of its bottling partner, the Cisneros Group but by the end of 1996, PepsiCo held less than 1% of the Venezuelan cola market. Following PepsiCo's anchor bottler in Mexico, Gemex, the case details the strategies employed by PepsiCo's senior management beginning in 1993 to expand its
The first company that conducted its operation in the soft drink industry was Coca-Cola. They brought a new revolution in the history of the world. Coca-Cola is the most popular and biggest-selling soft drink in history, as well as the best-known product in the world. Coca-Cola invented in May 1886 by Dr. John S. Pemberton in Atlanta, Georgia. The name 'Coca-Cola ' was suggested by Dr. Pemberton 's bookkeeper, Frank Robinson. He kept the name Coca-Cola in the flowing script that is famous today. Coca-Cola was first sold at a soda fountain by mixing Coca-Cola syrup with carbonated soda in Jacob 's Pharmacy in Atlanta by Willis Venable. During the first year, sales of Coca-Cola averaged nine drinks a day, adding up to total
Marketing is “an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationship in ways that benefit the organization and its stakeholders” (Kotler & Keller, 2009, p. 5). The main scope of marketing is to identify and to meet social and human needs. PepsiCo understands that as an international food and beverage organization that reaches millions of consumers daily, the agenda of its marketing campaigns can determine the success or failure of the company.
PepsiCo is a global food and beverage leader with net revenues of more than $65 billion and a product portfolio that includes twenty-two brands that generate more than $1 billion each in annual retail sales. PepsiCo’s main businesses - Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi-Cola - make hundreds of foods and beverages that are consumed throughout the world. It currently holds 36 percent of the total snack-food market share in the U.S. and 25 percent of the market share of the refreshment beverage industry. The products are classified under three main categories are “Good for You”, “Better for You” and “Fun for You”. “Good for You” category includes brands like Aquafina, Trop 50, Quaker Oats, Naked Juice, etc. “Good For You”
Partially due to decreasing interest in colas by consumers, PepsiCo faces increased competition in the fight for market share in the cola industry. Pepsi and Coke have gone head to head for years, with Dr Pepper and other smaller brands running a distant third, but with a shrinking consumer base, companies are left to fight over the remaining consumers. PepsiCo has usually played a close second throughout the years, but continuing to invest in a dwindling industry is no way to achieve sustainable profitability. Increased investment would be a wasted effort mainly because of the brand recognition and loyalty that Coca-Cola enjoys. While Pepsi does have its own brand recognition and loyal customers, it is not to the same degree that it is for Coke. In the fight for the remaining cola consumers, it is not likely that Pepsi will win out after being in second
PepsiCo’s corporate strategy had diversified, in 2008, the company into salty and sweet snacks, soft drinks, orange juice, bottled water, and ready-to-eat drink teas and coffees, purified and functional waters, isotonic beverages, hot and ready-to-eat breakfast cereals, grain-based products, and breakfast condiments. Strategies that kept their brands at the top were tied to new product innovation, close relationships with distribution allies, international expansion, and strategic acquisitions. A new element of PepsiCo’s corporate strategy was product reformulations to make snack
PepsiCo is a world leader in convenient food and beverages that manufacture, market, distribute and sell wide variety of beverages, foods and snacks, serving consumers in almost every part of the world. PepsiCo operates under six reportable segments: Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), Latin America Foods (LAF), PepsiCo Americas Beverages (PAB), PepsiCo Europe (Europe) and PepsiCo Asia, Middle East and Africa (AMEA). All of the mentioned segments are registered under one symbol “PEP” whose shares are traded on the New York Stock Exchange, Chicago Stock Exchange and SIX Swiss Exchange. Since 49% of PepsiCo’s operations are outside of the U.S. that generates significant portion of the company’s net revenue, PepsiCo selected the currency of its foreign subsidiaries in which they generally operates as its functional currency, which is translated into US dollars on the company’s financial statements. I have found that two major players, PepsiCo and Coca-Cola dominate the non-alcoholic beverage industry around the world. There is tremendous competition within a relatively slowing industry and PepsiCo currently controls nearly 21% of the industry with its Frito- Lay segment alone controls 60% of the U.S snack-food market.
Also when a customer tends to see the same company products everywhere and that too at a slightly elevate rate, and then the element of ‘Buyers illusion’ comes into the picture. The customers tend to believe that the product is priced higher as it is superior in quality and better as compared to other similar products priced at a lower rate.