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PEPSICO
Weighte
Weight Rating d
Score
0.11
0.33
0.12
0.48
0.40
0.09
0.27
0.08
0.32
team
Key
Weaknesses
1
0.11
0.33
0.11
0.33
0.09
0.27
0.08
0.32
0.11
0.22
Total
3.79
The average total weighted score for PepsiCo is 3.79, which is above average for
companies in the consumer food category. This is to be expected since they are
number two in market share with the Coca-Cola company number one. The two have
battled for market share for many years, but also combined dominate this industry.
PepsiCo had a diversified product line from carbonated beverages, non-carbonated
teas, sports drinks, fruit juices as well as snacks like potato chips, baked snacks and
various healthy snack products.
External Matrix:
External PepsiCo Matrix
Key External Factors
Weighte
Weight Rating d
Opportunities
Score
1
0.12
0.36
0.12
0.36
0.09
0.36
0.08
0.16
0.27
0.12
0.36
0.09
0.18
0.09
0.18
0.10
0.20
and Europe
2
5
Threats
0.10
0.20
costs up
Total
2.63
Coca-Cola
Nabisco
Critical Success
Factors
Weight
Rating
Score
Rating
Score Rating
Score
Brand recognition
0.14
0.56
0.70
0.42
Product Quality
0.13
0.52
0.52
0.52
Price
Competitiveness's
0.12
0.36
0.36
0.36
Management
0.12
0.36
0.36
0.36
Financial Position
0.13
0.39
0.52
0.39
Customer Loyalty
0.11
0.33
0.44
0.33
Global Expansion
0.12
0.36
0.48
0.36
Market Share
0.13
0.39
0.52
0.39
Total
1.00
3.27
3.90
3.13
The Competitive Factor Evaluations Matrix shows that PepsiCo is out competing
Nabisco but not its chief rival Coca-Cola. PepsiCo produces high quality brand name
products that compete on price with Coca-Cola.
SWOT Matrix:
SWOT
Strengths S
Weaknesses W
1. Brand Recognition
2. The unification of bottling
plants
3. Diversified product line
including
snacks, juice
4. Expanding into other
countries
5. Company is run by
experienced
management team
economic climate
2. Increase healthy foods
divisions
development
4. Expand marketing to web
5. Reduce long term debt
Opportunities O
SO Strategies
WO Strategies
Threats T
1 Carbonated soft drink
. market in
decline
2 Industry operates
. unchanged
3 Campaign against bottle
. water
affecting usage
4 Kellogg and Nabiscos
. growing
snack divisions
5 Extensive marketing
. needed
ST Strategies
Experiment with other types
of
beverage containers based
on
regional market. (S4,T2)
Develop powdered drinks.
(S4,T3)
Management signing
strategic
partnerships with smaller
snack
companies. (S5,T5)
WT Strategies
Increase marketing of colas
on
alternate media outlets.
(W4,T1)
Restructure company by
paying
down debts. (W5,T2)
Redesign water bottles for
less
plastic, or develop
biodegradable
bottles. (W3,T3).
PepsiCos SWOT matrix shows that they have room to create new types of
products and packages for those products that will expand their market and reduce
their costs. They can use these new products and packages as they expand into
other countries while regionalizing those products to the areas which they serve.
They must reduce their total long term debt and can do this through decreasing the
amount of packaging they use in their products while reducing their fixed costs. The
case shows that PepsiCo is already reducing fixed costs, however reducing package
costs can only help them at this time.
Space Matrix:
Financial Position
Ratings
Leverage
Liquidity
Working capital
Cash flow
3
10
Industry Position
Growth potential
Profit potential
Financial stability
Resource utilization
2
11
Stability Position
Technological changes
-1
-3
Competitive Pressure
-4
-4
-12
Competitive Position
Market Share
-2
Product quality
-1
Customer loyalty
-3
Product lifecycle
-2
-8
Conclusions:
FP Average = 10/4 = 2.5
IP Average = 11/4 = 2.75
SP Average = -12/4 = -3
CP Average = -8/4 = -2
Space Matrix Coordinates:
X-axis: CP+IP or (-2 +
2.75) = .75 Y-axis: FP+SP
or (2.5 + -3) = -.5
Competitive:
Intensive strategies
Integration
Altenate
No.01
Mkt
Penetration
Strengths
1.Adjust costs downward
in economic climate
2.The unification of
Weig
ht
Alternate No.02
Mkt Development
AS
TAS
AS
TAS
0.33
0.44
0.48
0.36
0.2
0.4
0.36
0.27
0.32
0.16
0.33
0.44
0.22
0.11
0.27
0.09
0.16
0.32
0.33
0.44
0.48
0.36
0.36
0.48
0.18
0.27
0.08
0.16
0.11
bottling plants
3.Diversified product line
0.12
0.1
countries
5.Company is run by
0.09
experienced
management team
0.08
Weakness
1.Adjust costs downward
in economic climate
2.Increase healthy foods
0.11
divisions
3.Expand research and
0.11
development
4.Expand marketing to
0.09
0.08
0.11
opportunities
1:00
1.Increase in carbonated
soft drink usage in Asia
and Europe
2.Increased demand for
0.12
0.12
0.09
0.08