PepsiCo is an American multinational corporation. The company is headquartered in Purchase, York. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Popular brands of PepsiCo are: Mountain Dew, Diet Pepsi, Lay’s, Doritos, Tropicana, Gatorade, and Quaker. Pepsi’s products are available in some 200 countries. In 2010 the company acquired its two largest bottlers, Pepsi Bottling Group and PepsiAmericas. SWOT analysis of the company is given below:
Pepsi is highly diversified company by having non-carbonated and carbonated beverages in addition to sweet, salty and cereal-based snacks.
Pepsi Corporation has strong image all over the globe and possesses 5 diverse billion-dollar brands.
PepsiCo has shaped partnerships with numerous brands in order to market and distribute them with its own brands.
PepsiCo brands stand for quality and are appreciated household names.
Pepsi has more diversified portfolio in food and beverage related products as compared to the Coca Cola.
PepsiCo mainly fights on differentiation, advertising and high market share.
PepsiCo has strong brand equity and greater number of loyal customer’s around the world.
It has huge production and distribution facilities of alcoholic, non-alcoholic beverages and food products.
PepsiCo has delivered solid operating and financial performance in current (2007-2009) challenging global environment and generated significant operating cash flow such as:
a. Net sales grew 5% on a stable currency basis.
b. Main division operating profit rose 6% on a stable currency basis.
c. Operating cash flow, without few items, arrive at $5.6 billion, an increase of 16%.
In 1993, PepsiCo had vast lines of discontinued products throughout the history which badly damage the company’s reputation..
PepsiCo directed to stave off a runaway fraud pertaining to supposed product tampering such as:
a. Needles were declared to have been found in bottles and cans of Diet Pepsi.
b. Consumers accounted finding pins, screws and a bullet in their Diet Pepsi.
Overdependence on the markets of United States and Wal-Mart. For example the company generates 52 percent of its sales from the U.S. and nearly 12 percent is generated by Wal-Mart.
PepsiCo is too away Coca-cola in the international market place and demand for its products is extremely elastic.
- India is a promising market and one of the top five market places in provisions of growth of soft drinks market.
- The level of consumption in India is seen to increase with increasing household incomes.
- Expand divisions with mergers and acquisitions for strong presence all over the world.
- Invest in R&D to expand offerings of more reasonable, nutritionally related products for lower-income and underserved communities.
- The improving economic conditions globally after economic slowdown 2007-10.
- Growing demand of juices products and health-conscious consumers and changing lifestyles.
- Bottled water drinking is increased by 11 percent.
- PepsiCo should offer the hygienic products due to increasing figure of health conscious consumers.
- PepsiCo and Coke have been main targets in India because they are familiar foreign firms. This draws abundance of attention and strong criticism by different groups.
- Improve or sustain brand equity figure for PepsiCo’s $19 billion brands in top 10 marketplaces.
- In this Industry Pepsi is fighting against increasing taxes on soft drinks.
- Carbonated drink consumption have been decreasing due to involvement of lofty fructose and sugar to obesity result to heart disease.
- Many smaller players are furious competitors which are also creating the competition harsh.
- Economic slow down resulted in volatile commodity costs, fluctuating currencies, frozen credit markets and negative GDP rates.
PepsiCo is facing strong regulations in different countries around the world.
Coca-Cola is the strong competitor which competes with strong advertising and differentiation.
Numerous substitutes such as water, juices, coffee and beer etc are available to the end consumers.