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SR.

SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

PepsiCo
HISTORY OF PEPSI COLA
In 1893 Caleb Bradham, a young pharmacist from New Bern, North Carolina, begins experimenting with many different soft drinks. In 1898, one of Caleb's formulations, known as "Brad's Drink" a combination of carbonated water, sugar, vanilla, rare oils and cola nuts, is renamed "Pepsi-Cola". On August 28, 1898, Pepsi-Cola received its first logo. In 1902, he applied for a trademark with the U.S. Patent Office, Washington D.C., and formed the first Pepsi-Cola Company. 1905, Pepsi-Cola's first bottling franchises were established in Charlotte and Durham, North Carolina. In 1906, Pepsi gets another logo change, the third in eight years. The modified script logo is created with the slogan, "The Original Pure Food Drink". In 1920, Pepsi theme line speaks to the consumer with "Drink Pepsi-Cola, it will satisfy you". In 1923, Pepsi-Cola Company was declared bankrupt and its assets were sold to a North Carolina concern, Craven Holding Corporation, for $30,000.

Mission Statement
Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. 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.

Proposed Mission
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. (1,2. 3,4) 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. (5,8,9) And in everything we do, we strive for honesty, fairness and integrity. (6,7) -----------------------------------------------------------------------------------------------------------------------------------------MUHAMMAD ALAM
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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________ Customer Products or Services Markets Technology Concern for survival, profitability, and growth Philosophy Self-Concept Concern for public image Concern for employee

Vision Statement
PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today."
Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.

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

External Assessment
Opportunities
1. Opening in market for less costly products 2. Growth opportunities in developed countries as well as international nonestablished 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)
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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

5. Growth in the carbonated drink market is the largest in Asia and Europe 6. The world's demand is experiencing a growth with the sports drinks, bottled water, and energy drinks

Threats
1. Fierce competition from Coca-Cola, which owns the largest piece of the market share 2. 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

CPM
Pepsi Co.
Critical Success factors

Coca Cola

Dr. Pepper Snapple Group


Weighted Score 0 0.36 0.22 0.3 0.2 0.36 0.36 0.18 0.32 0.27 0.21 2.78

Advertising Price Competitiveness Product Diversity Market Share Company Image Customer Loyalty Financial Position Sales Distrubution Product Quality Global Expansion Totals

Weights Rating Weighted Score Rating Weighted Score Rating 0.0 to 1.0 1 to 4 1 to 4 1 to 4 0 0 0.12 4 0.48 4 0.48 3 0.11 3 0.33 3 0.33 2 0.1 4 0.4 4 0.4 3 0.1 3 0.3 4 0.4 2 0.12 3 0.36 4 0.48 3 0.12 4 0.48 4 0.48 3 0.09 3 0.27 3 0.27 2 0.08 2 0.16 4 0.32 4 0.09 4 0.36 4 0.36 3 0.07 3 0.21 4 0.28 3 1 3.35 3.8

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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

EFE
Key External Factors Weights 0.0 to 1.0 Rating 1 to 4 2 0.1 Weighted Score

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

0.05

0.08

0.24

0.05

0.05

0.13

0.52

0.09

0.27

0.13

0.52 0

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

0.12

0.48

0.05 0.1 0.09

2 3 4

0.1 0.3 0.36

0.05 0.06 1

2 2

0.1 0.12 3.16

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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

Internal Assessment
Strengths
1. Strong brand equity 2. Well-known worldwide 3. Innovating company 4. Ethical, socially responsible, and sustainable company 5. Strong advertising company with more than 40 slogans and songs 6. PepsiCo as the largest part of the market share after Coca-Cola 7. PepsiCo owns a wide variety of smaller brands which able them to offer a large product range from beverages to snacks

Weaknesses
1.PepsiCo production is really expansive because of the need to constantly develop new products to meet the changing customers demands 2. PepsiCo is experiencing a lack of focus towards Pepsi sodas 3. PepsiCo is experiencing product recalls 4. PepsiCo has a low employment productivity and a weak distribution 5. PepsiCo depends too much on the US market 6. PepsiCo is far behind Coca-Cola in the international market

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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

IFE
Key Internal Factors Internal Strengths Weights 0.0 to 1.0 0.12 0.06 0.08 0.08 0.05 0.07 0.06 1 or 2 0.05 0.06 0.12 0.08 0.08 0.09 1 2 2 1 1 2 2 0.1 0.12 0.12 0.08 0.16 0.18 2.72 Rating 1, 2, 3 or 4 3 or 4 4 4 4 4 3 3 4 0.48 0.24 0.32 0.32 0.15 0.21 0.24 Weighted Score

Strong brand equity Well known worldwide PepsiCo owns a wide variety of smaller brands which able them to offer a large product range Innovating company Ethical, socially responsible, and sustainable company Strong advertising company with more than 40 slogans and songs PepsiCo as the largest part of the market share after Coca-Cola
Internal Weaknesses

PepsiCo production is really expensive because of the need to constantly develop new products to meet the changing costumers demands PepsiCo is experiencing a lack of focus towards Pepsi PepsiCo is experiencing product recalls PepsiCo has low employment productivity and a weak distribution PepsiCo depends too much on the US market PepsiCo is far behind Coca-Cola in the international market
Totals

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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

SWOT Matrix
SO Strategies
(O4, S1, S2, S6, S7) Continue to offer variety or product in various brands.

ST Strategies
(T1, S1, S2, S3, S8) Innov ate Pepsi product line with somethi ng that is going to differentiate us from Coca-Cola.

WO Strategies
(W2, W5, W6, O2, O5) Expand Pepsi sodas product in Europe and Asia.

WT Strategies
(W1, T2, T5) Adjus t production of bottles with downturn in economy.

(O5, O2, S2) Expand (W1, O4, O6)Improve (W1, T3) Produce and focus on the thei r sales in the bigger size of bottles carbonated drinks and (S1, S3, O4) Innovate beverage segment by and s ale them at the -----------------------------------------------------------------------------------------------------------------------------------------beverage segment in products by offering responding to the same price as the small MUHAMMAD Europe. increasing demand for one. Asia and ALAM heal thier alternatives. sports drinks, bottled M. com Roll #09 S6, S7) MINHAJ UNIVERSITY LAHORE (O6, O4, (T2, T3, S3) Offer more (W3, T6) Be water, and energy Respond to the promotions or responsible and drinks. growing demand of discounts to prevent cautious towards

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

BCG
Division Frito-Lay North America Revenue $ 13,224.00 % Revenue Profit 31% $ 3,258.00 Profit % Market Share Market Growth 38% 1

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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________ Quaker Foods North America Latin America Foods PepsiCo Americas Beverages Europe Asia, Middle East & Africa $ 1,884.00 $ 5,703.00 $ 10,116.00 $ 6,727.00 $ 5,578.00 4% $ 13% $ 628.00 904.00 7% 10% 25% 11% 8% 1 1 0.8 0.4 0.3

23% $ 2,172.00 16% $ 13% $ 932.00 716.00

Total

$ 43,232.00

100% $ 8,610.00

100%

BCG
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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

SPACE Matrix
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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________


Financial Strength rating is 1 (worst) to 6 (best) 1 Liquidity 2 Cash Flow 3 Return on investment 4 Earnings per share Industry Strength rating is 1 (worst) to 6 (best) 1 Ease of entry 2 Growth potential 3 Financial stability 4 Profit potential Environmental Stability rating is -1 (best) to -6 (worst) 1 Demand variablity 2 Price range from competing products 3 Barriers to entry 4 Price elasticity of demand Competitive advantage rating is -1 (best) to -6 (worst) 1 Market share 2 Product quality 3 Customer loyalty 4 Cotrol over suppliers and distributors 7 Ratings 4.0 5.0 4.0 4.0 FS Total 17.0 6.0 5.0 4.0 5.0 IS Total 20.0 -1.0 -1.0 -1.0 -1.0 ES Total -4.0 -2.0 -3.0 -3.0 -3.0 CS total -11.0

SPACE Graph

IE Matrix
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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

Matrix Analysis
Alternative Strategies Forward Integration Backward Integration Horizontal Integration Market Penetration Market Development Product Development Related Diversification Unrelated Diversification Horizontal Diversification Joint Venture Retrenchement Divesture Liquidation IE x x x x x x SPACE x x x x x x x x x BCG x x x x x x x x x x x x x GRAND Count 3 3 3 3 3 3 3 3 2 2 1 1 1

x x x

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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

QSPM
Innovate products with Improve international healthier alternative AS TAS 1 to 4 1 3 0.24 0 segment AS 1 to 4 3 4 Key factors External Opportunities: Weight TAS

Provide less costly products Improve presence in established countries and increase international market where they are not already settled Pepsi recently reacquired ownership of its two largest bottlers, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS) Compete in more than one industry (non-alcoholic beverage industry, the salty or savory snack food industry, and the breakfast food industry) Growth in the carbonated drink market is the largest in Asia and Europe The world's demand is experiencing a growth with the sports drinks, bottled water, and energy drinks.
Threats:

0.05 0.08 0.05

0.15 0.32 0

0.13 0.09 0.13 0.12 0.05 0.1 0.09 0.05 0.06 1


1 to 4 0.12 0.06 0.08 0.08 0.05 0.07 0.06

4 1 4 3 1 1 4

0.52 0.09 0.52 0 0.36 0.05 0.1 0.36 0 0


1 to 4

3 4 4 3 4 4 1

0.39 0.36 0.52 0 0.36 0.2 0.4 0 0.05 0

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

Strong brand equity Well known worldwide PepsiCo owns a wide variety of smaller brands which able them to offer a large product range from beverages to snacks Innovating company Ethical, socially responsible, and sustainable company Strong advertising company with more than 40 slogans and songs PepsiCo as the largest part of the market share after Coca-Cola
Weaknesses:

4 3 4 4 2 3 4

0.48 0.18 0.32 0.32 0.1 0.21 0.24 0 0.05 0 0.12 0.08 0.16 0.18 4.68

4 4 2 4 3 3 3

0.48 0.24 0.16 0.32 0.15 0.21 0.18 0 0.1 0 0.12 0.08 0.08 0.09 4.96

PepsiCo production is really expensive because of the need to constantly develop new products to meet the changing costumers demands PepsiCo is experiencing a lack of focus towards Pepsi PepsiCo is experiencing product recalls PepsiCo has low employment productivity and a weak distribution PepsiCo depends too much on the US market PepsiCo is far behind Coca-Cola in the international market

0.05 0.06 0.12 0.08 0.08 0.09 1

1 1 1 2 2

2 1 1 1 1

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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

Strategic Plan
Strategy
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

Porter's five forces analysis

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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

Recommendations
1. Products decisions : add in Soya drink and Ice cream to increase their product portfolio and sales revenue 2. Product Decision :Produce a range of Healthy, i.e. Sugar free or diet Alternatives of different brands. 3. Promotion their products through Effecting Marketing and Advertising strategies. 4. Improving production efficiencies through optimal outsourcing of production and integration
5. Market Positioning : The company should modify its advertising strategy and educate the customers about its age-old existence and enhance its brand image. This will appeal to the target customers of middle and older age groups apart from the younger generation in which PEPSI has a good hold. Placing Strategy: Rural market being a very potential segment needs very quick and prompt efforts to be taken to capture this high volume market.

6.

7. Pricing : Soft drink is still considered a treat virtually a luxury, so it possible company should cut down its price especially of cans. 8. PR: A company may create favorable impression among the youth if they sponsors small events like college festivals, university programs, school functions, fashion shows, quiz programs etc.

CONCLUSION
As a result, market segmentation is important to companies so that firms can easily enter the market and have a potential growth. If PepsiCo does not target young population in the beginning, it is hard to occupy the market and compete with its competitor which is Coca-cola. Pepsi can continue hire popular celebrities to advertise their products in different market such as David Beckham attracts sport enthusiast and Jay Chou
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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

attracts youths where this really can boom the sales. Moreover, Pepsi can come out with as many new innovative products as they can depend on countries cultures. With this target, Pepsi can enter many countries market to gain more profits

Sources
Sajjad ul Aziz "2010 Will be Changing for PepsiCo." Medill Reports Chicago. N.p., n.d. Web. 20 Apr. 2012. <news.medill.northwestern.edu/chicago/news.aspx?id=157896 >. "Coke vs Pepsi." Coke vs Pepsi. N.p., n.d. Web. 25 Apr. 2012. <http://cokevspepsi.net/>. " Google Image Result for http://41minds.files.wordpress.com/2011/04/bcggrowthsharematrix.png."Google. N.p., n.d. Web. 22 Apr. 2012. <http://www.google.com/imgres?hl=en&sa=X&rlz=1C1LENN_enUS472US472&biw=136 6&bih=677&tbm=isch&prmd=imvnsa&tbnid=VtCOuMODsooZM:&imgrefurl=http://41minds.com/tag/bcgmatrix/&docid=JDNK6PE50NlOOM&imgur "Key financial ratios: Financial results - MSN Money ." Money: Personal finance, investing news & advice - MSN Money. N.p., n.d. Web. 25 Apr. 2012. <http://investing.money.msn.com/investments/keyratios?symbol=PEP&page=TenYearSummary>. "PEP: Summary for Pepsico, Inc. Common Stock- Yahoo! Finance." Yahoo! Finance Business Finance, Stock Market, Quotes, News. N.p., n.d. Web. 25 Apr. 2012. <http://finance.yahoo.com/q?s=PEP>. "Pepsi History." Sirpepsi. N.p., n.d. Web. 25 Apr. 2012. <http://www.sirpepsi.com/pepsi11.htm>. "PepsiCo 2009 annual report." PepsiCo. N.p., n.d. Web. 19 Apr. 2012. <www.pepsico.com/Download/PEPSICO_AR.pdf>.
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MINHAJ UNIVERSITY LAHORE

SR.SAJJAD UL AZIZ QADRI _____________________________________________________________________________________

"PepsiCo Brands | PepsiCo.com." PepsiCo Home | PepsiCo.com. N.p., n.d. Web. 24 Apr. 2012. <http://www.pepsico.com/Brands.html>. "PepsiCo Investors | PepsiCo.com." PepsiCo Home | PepsiCo.com. N.p., n.d. Web. 25 Apr. 2012. <http://www.pepsico.com/Investors.html>. "PepsiCo MORE | PepsiCo.com." PepsiCo Home | PepsiCo.com. N.p., n.d. Web. 25 Apr. 2012. <http://www.pepsico.com/Global-Sites/More.html>. Reppo, Ilya, and Michelle Yan. "PepsiCo Valuation." Leeds-faculty Colorado. N.p., n.d. Web. 14 Apr. 2012. <leedsfaculty.colorado.edu/madigan/4820/Presentations%202010/PepsiCo%20Report.pdf>. segment. "PepsiCo Valuation." Google. N.p., n.d. Web. 23 Apr. 2012. <http://webcache.googleusercontent.com/search?q=cache:egHCTRx43AYJ:leedsfaculty.colorado.edu/madigan/4820/Presentations%25202010/PepsiCo%2520Report.pd f+PepsiCo+net+revenue+comparative+2007-2009&hl=en&gl=us> Steve. " Global Cola: 10 Pepsi-Cola Flavors You Cant Get Here | WebUrbanist ." WebUrbanist | From Urban Art & 3D Graffiti to Abandoned Cities . N.p., n.d. Web. 25 Apr. 2012. <http://weburbanist.com/2010/05/02/global-cola-10-pepsi-cola-flavors-youcant-get-here/>.

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