PepsiCo

By: Ashley Cleary, Sylvia LaBrie, Andrea Baril,

Marie-Michele Lachance

Overview

Company Overview
History of Pepsi
Growth
2009 Events and Issues
Existing Mission and Vision statement
New Mission and Vision Statement
SWOT Analysis
External Assessment
CPM
EFE
Positioning Map
Internal Assessment
Organizational Chart
Income Statement
Balance Sheet
Financial ratios
IFE Matrix

Strategy Formulation
SWOT Matrix
Grand Strategy Matrix
BCG
Space Matrix Data
Space Matrix
IE Matrix
Matrix Analysis
QSPM Matrix
Strategic Plan
Strategy
Objectives
Recommendations
Assumptions
Implementation
EPS/EBIT
Projected Financials
Evaluation
Balanced Scorecard
Key Future Ratios

History
In 1965: PepsiCo, Inc. is founded by Donald M. Kendall,
President and CEO of Pepsi-Cola and Herman W. Lay,
Chairman and CEO of Frito-Lay, through the merger:
1. Pepsi-Cola In 1898: Caleb Bradham, a New Bern, North
Carolina, pharmacist, created "Brad's Drink," a carbonated
soft drink he created to serve his drugstore's fountain
customers.
2. Frito Company

3. H. W. Lay Company

The Major products of the companies are:
Pepsi-Cola Company
Fritos brand corn chips, Lay's brand potato chips, Cheetos
brand cheese flavored snacks, Ruffles brand potato chips,
Rold Gold brand pretzels.
Mountain Dew

Growth
1966:
Doritos is introduced
Pepsi enters Japan and Eastern Europe.

1970:
PepsiCo moves from New York City to new world headquarters in Purchase, N.Y
Pepsi is the first company to respond to consumer preference with lightweight, recyclable, plastic
bottles.

1977:
PepsiCo acquires Pizza Hut, Inc

1978:
Taco Bell

1980:
PepsiCo Food Service International (PFSI) is formed to focus on overseas development of restaurants.

Growth Cont.
1982:

Pepsi Free and Diet Pepsi Free, the first major brand caffeine-free colas, are
introduced.
Inauguration of the first Pepsi-Cola operation in China.

1985:
PepsiCo is now the largest company in the beverage industry. The company has
revenues of more than $7.5 billion, more than 137,000 employees.
Pepsi-Cola products are available in nearly 150 countries and territories around the
world. Snack food operations are in 10 international markets.

1986:
PepsiCo purchases 7Up International, the third largest franchise soft drink
operation outside the United States.

1993:
Pepsi-Cola introduces Aquafina bottled water into test market.

1996:
Pepsi-Cola launches Pepsi World at www.pepsiworld.com

Global
Pepsi products are in almost 200 countries
throughout the world
There are 22 different brand lines that
account for at least $1 billion per year per
brand

2009
Celebrated 75 years in Canada
Was on the Best Food for Women list in
Womens Health magazine
Began a partnership with the NFL
Won U.S. EPA SmartWay Environmental
Excellence award
Became official beverage of Norwegian
Cruise Lines

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.

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 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)
1.
2.
3.
4.
5.
6.
7.
8.
9.

Customer
Products or Services
Markets
Technology
Concern for survival, profitability, and growth
Philosophy
Self-Concept
Concern for public image
Concern for employees

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)
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

EFE
Key External Factors

Weights

Rating

0.0 to 1.0

1 to 4

Weighted
Score

Opening in market for less costly products

0.05

0.1

Growth opportunities in developed countries as well as international unestablished countries

0.08

0.24

Pepsi recently reacquired ownership of its two largest bottlers, Pepsi Bottling Group (PBG) and
PepsiAmericas (PAS)

0.05

0.05

Compete in more than one industry (non-alcoholic beverage industry, the salty or savory snack food
industry, and the breakfast food industry)

0.13

0.52

0.09

0.27

0.52
0

0.12

0.48

0.05

0.1

0.1

0.3

0.09

0.36

0.05

0.1

0.06

0.12

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

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

0.13

3.16

Positioning Map
High Prices

Diverse
Products

Limited
Products
Dr. Pepper
Snapple
Group

Coca
Cola

Low Prices

Pepsi
Co.

Market Share

Revenue Distribution

Stock Price History

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

IFE

Income Statement

Balance
Sheet

Financial Ratios

Financial Trends

Adapted from www.moneycentral.msn.com

Organizational Chart

Revenues and Profits

Strategy Formulation

SWOT
Matrix

Grand Strategy Matrix

BCG

Division
Frito-Lay North America
Quaker Foods North
America
Latin America Foods
PepsiCo Americas
Beverages
Europe
Asia, Middle East & Africa
Total

Revenue
$
13,224.00
$
1,884.00
$
5,703.00
$
10,116.00
$
6,727.00
$
5,578.00
$
43,232.00

% Revenue Profit
$
31% 3,258.00
$
4% 628.00
$
13% 904.00
$
23% 2,172.00
$
16% 932.00
$
13% 716.00
$
100% 8,610.00

Profit %

Market Share

Market Growth

38%

5.42%

7%

-0.95%

10%

-3.26%

25%

0.8

-7.51%

11%

0.4

-2.38%

8%

0.3

8.97%

100%

BCG Cont.

SPACE Matrix

SPACE Graph

6
3

5
2

4
1
2
3
4
5
6

1
5

2
6

IE Matrix

Matrix Analysis

QSPM

QSPM Cont.

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

Recommendations
In the next 3 years, PepsiCo should acquire 3
brands per year in an international marketplace
One of these 3 brands per year must be healthy

Increase production and distribution of

carbonated drinks in Asian and European
countries
PepsiCo will expand into Africa to make use of the
international market they are not part of

Objectives
Spend $15 million on a healthier more eco-friendly
beverage brand in an already established country
Spend $15 million on a healthier more eco-friendly
snack brand in an already established country
Spend $10 million to acquire a smaller brand in
Africa
Increase our revenues by 5% in 2010
Start our own environmental cause fund with $1
million

Assumptions
Spend $40 million to acquire new brands
Spend $1 million to start an environmental
cause group
Revenue increase of 5%
Decrease short-term and long-term debt by
using some of our cash and cash equivalents
as well as retained earnings

Implementation

Projected Income Statement

Projected Balance Sheet

Evaluation

Balanced
Scorecard

Future Ratios

Fun Facts

Pepsi/Coke Rivalry
http://www.buzzfeed.com/pepsi/the-10-most-i
conic-pepsi-commercials-of-all-time-1q6t

Questions?

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