09 Performance Task 1

Strategic Management

Submitted to:

Ma’am Jubie Asis

Submitted by:

Bautista, Cathlyn May, Q.

Mallorca, John Paul

I. Company Background

Establishment: PepsiCo

PepsiCo is a multinational food and beverage corporation that was founded

in 1965 through the merger of Pepsi-Cola and Frito-Lay. The company has

since grown to become one of the world's leading consumer goods

companies, with a diverse portfolio of products sold in over 200 countries and

territories.

PepsiCo's product range includes a wide variety of foods and beverages,

including carbonated soft drinks (Pepsi, Mountain Dew, Mirinda), non-

carbonated beverages (Gatorade, Tropicana, Lipton), snacks (Lay's, Doritos,

Cheetos), and other food products (Quaker Oats, Aunt Jemima, Sabra).

Mission:

PepsiCo's mission is to be the global leader in convenient foods and

beverages by winning with purpose. They strive to provide enjoyable and

sustainable products and experiences to consumers, while fostering a positive

impact on society and the environment. PepsiCo aims to achieve this by

delivering strong financial performance and creating long-term value for their

shareholders.

Vision:

PepsiCo's vision is to be the world's premier consumer products company,

focused on delivering superior financial performance and creating sustainable

long-term value for their stakeholders. They aspire to achieve this by being a
responsible corporate citizen and by empowering their employees, partners,

and communities to thrive.

Objectives:

Sustainable Growth: PepsiCo aims to achieve sustainable and profitable

growth by consistently introducing innovative products that meet evolving

consumer needs and preferences. They focus on driving organic revenue

growth, expanding market share, and improving profitability.

Product Portfolio: The company seeks to diversify and enhance its product

portfolio by offering a wide range of food and beverage choices. This includes

developing healthier options, reducing sodium, sugar, and saturated fat

content, and addressing the changing preferences of consumers.

Environmental Sustainability: PepsiCo is committed to reducing its

environmental impact and conserving natural resources. They strive to

improve water usage efficiency, minimize greenhouse gas emissions, and

adopt sustainable sourcing and packaging practices throughout their value

chain.

Talent and Diversity: PepsiCo values its employees and aims to attract,

develop, and retain top talent from diverse backgrounds. They focus on

creating an inclusive and empowering workplace culture that fosters

innovation, collaboration, and professional growth.

Community Engagement: The company believes in making a positive

difference in the communities they serve. PepsiCo invests in various social

and environmental initiatives, supporting education, health and wellness,

disaster relief efforts, and sustainable agriculture programs.

Policies:

Environmental Sustainability: PepsiCo has established environmental

sustainability policies to reduce its ecological footprint. This includes initiatives

to conserve water, decrease greenhouse gas emissions, promote sustainable

packaging, and enhance waste management practices.

Responsible Sourcing: PepsiCo has policies in place to ensure responsible

sourcing of ingredients and materials. They work to promote sustainable

agriculture, support local farmers, and adhere to ethical and socially

responsible practices within their supply chain.

Workplace Diversity and Inclusion: PepsiCo emphasizes a diverse and

inclusive workplace. The company has policies aimed at fostering a culture of

equality, promoting diversity, and preventing discrimination in all forms. They

strive to create an environment where employees feel valued, respected, and

empowered.

Health and Nutrition: PepsiCo has implemented policies to address health

and nutrition concerns. They focus on product innovation, reformulation, and

responsible marketing practices to provide consumers with a range of options

that meet their evolving preferences for healthier choices.

Responsible Marketing and Advertising: PepsiCo follows policies that

promote responsible marketing and advertising practices. They aim to ensure

that their marketing efforts align with ethical guidelines, comply with relevant
 regulations, and promote balanced and accurate information about their

products.

Human Rights and Labor Standards: PepsiCo has policies that support and

respect human rights within their operations and supply chain. They strive to

uphold fair labor practices, promote worker safety and well-being, and ensure

compliance with international labor standards.

II. Statement of the Problem

• How can PepsiCo cope up with the rising number of competitors both old

companies and new entrants to the same industry?

• What are the ways PepsiCo can do to make their products tackle health

concerns considering that they are known for their soda?

• In what way can PepsiCo innovate their packaging to help solve the

environment concern?

III. Internal Environment

1. Financial Resources: PepsiCo is a multinational food and

beverage company with significant financial resources. It generates

substantial revenue and has a strong presence in the global market.

Resources
2. Manufacturing Facilities: PepsiCo operates numerous

manufacturing plants worldwide, enabling efficient production and

distribution of its products.

 3. Distribution Network: The company has an extensive distribution

network that allows its products to reach consumers across various

regions.

4. Brands and Intellectual Property: PepsiCo owns a diverse

portfolio of well-known brands, including Pepsi, Lay's, Gatorade,

Quaker, Tropicana, Doritos, and Mountain Dew. These brands and

their associated trademarks are valuable assets for the company.

1. Product Innovation: PepsiCo has a strong focus on innovation

and new product development. It continually introduces new flavors,

product variations, and healthier options to meet changing consumer

preferences.

2. Marketing and Branding: The company has expertise in

marketing and brand management, employing various advertising

and promotional strategies to maintain and enhance the visibility and

appeal of its brands.

Capabilities
3. Research and Development: PepsiCo invests in research and

development to develop new technologies, ingredients, and

manufacturing processes. This allows the company to improve its

products, enhance sustainability efforts, and explore emerging

trends.

4. Supply Chain Management: PepsiCo has a robust supply chain

management system that ensures efficient sourcing, production, and

distribution of its products.

 Competencies

PepsiCo possesses strong marketing capabilities and a diverse

portfolio of well-recognized brands. The company invests heavily in

advertising and promotional activities to maintain brand awareness

Marketing and drive consumer demand. It leverages its marketing expertise to

develop innovative marketing campaigns, engage with consumers

through various channels, and adapt to changing consumer

preferences.

PepsiCo has a solid financial position with a strong revenue stream.

The company generates substantial revenue from its global

operations, allowing it to invest in research and development,

Finance
marketing campaigns, and acquisitions. It maintains a robust

financial management system, allowing for effective budgeting,

capital allocation, and risk management.

PepsiCo has a well-established operational infrastructure to support

its diverse product portfolio. The company operates multiple

manufacturing plants, distribution centers, and warehouses

worldwide. It benefits from economies of scale and efficient supply

Operations
chain management, enabling it to deliver products to consumers in a

timely manner. PepsiCo continually focuses on optimizing its

operations to enhance efficiency, reduce costs, and improve

sustainability.
 IV. External Environment Threat of new Entrants:
• Offers new products
• More affordable products
RIVALRY AMONG
EXISTING COMPETITORS: • New competitors already
Threat of New Entrants studied what’s on-demand
• Number of competitors • Access to distribution
• Industry growth channels
• Brand loyalty • Cumulative experiences
• Quality differences

Suppliers Buyer
Power Competitive Power
Rivalry

Supplier’s Power:
• Number of suppliers
• Uniqueness of each
supplier’s products
• Their ability to
substitute
• Relationship to the
company
• Cost of products
Buyer Power:
• Number of customers
• Price sensitivity
• Buyer’s ability to substitute
Threat of Substitute • Customers preferences
Products
Threat of substitute Products:
• Perceived level of product differentiation
• Relative price performance
• Buyer propensity to substitute
• Lower costs of products from competitors

V. Analysis of Strategic Factors

SWOT Analysis of PEPSI

This SWOT Analysis by PepsiCo shown us how the world’s second-largest

food company is using its competitive edge to dominate the beverage and

snack food industry. Identify all major strengths, weaknesses, opportunities,

and threats affecting the company. It is a leading global food and beverage
 company with a complementary portfolio of exciting brands including Frito-Lay,

Gatorade, Quaker, and Tropicana. Many of their food and snack products hold

significant leadership positions in the food and snack food industry in the

United States and around the world. In 2017, PepsiCo and the Coca Cola

Company accounted for approximately 23% and 20% of the beverage

category in the U.S. According to retail metering channel estimates,

respectively.

Helpful Harmful

STRENGTHS WEAKNESS

• Best Global Brand • Competition

• Power of One Strategy • Product Dependence

• Highly Diversified Portfolio • Failed Products

Internal

• Brand Equity • Value Addition

• Strong Leadership • Unhealthy Product

• Customer Loyalty • Overdependence on Food and

Beverages

• Strong Distribution
 • Controversial Advertisements

• Supply Chain

• Brand Loyalty

OPPORTUNITIES THREATS

• Healthy Options • Competitors

• Product Diversification • Health Factor

External

• Increase Consumer Driven R&D • Economic Slowdown

• Flavors • Government Laws and Regulations

• Expanding Operation in • Changes in Demographic

Emerging Market

Strengths

• Brand Equity - It is one of the most famous and well-known global brands

in the food and beverage industry. It is also known as the brand of youth.

Has a high brand and reputation. It is worth $ 19.4 billion and is ranked 29th

on the Forbes list of Most Valuable Brands.

• Strong Leadership - Under the management of Indra, Nooyi PepsiCo has

been doing well. It has controlled to stay on the various functions in the

whole food and beverage region most effective in the back of Nestle in that

field.

• Customer Loyalty - PepsiCo has a very dependable consumer base. In its

beverage category, all its soft drinks have an iconic flavor and that's why

their customers do not opt to shift brands. They have emerged as a totally

robust brand in terms of the juices and bottled water category. Frito-Lay has

been one of the top-promoting manufacturers around the globe with

manufacturers beneath it which includes Doritos, Lay's, Funyuns, Uncle

Chips, Cheetos, Tostitos, and Walkers. They had controlled to grab 6 slots

in the top 10 international snack brands with topping the charts all three

spots as well.

• Strong Distribution - Pepsi has a global presence in more than 200

countries providing them with a very good distribution network.

• Supply Chain - It has one of the exceptional supply chain networks in the

world, making the goods available at some stage in the world. Apart from

this they also have very efficient reverse logistics associated with it.

• Brand Loyalty - Due to Pepsi's long-term stability in the market, the brand

has amassed a loyal customer base.

Weaknesses

• Competition - It has heavy opposition from Coca-Cola in its soft drink’s

category. They are constantly neck to neck with each other. This

competition thereby offers room for not so loyal client base to exchange

brands quickly. Products perceived as unhealthy: Most of the soft drinks of

PepsiCo are perceived as unhealthy.

• Product Dependence - They are only present in the food and beverage

industry, which can ultimately be harmful. They need to diversify into other

product segments to become global leaders.

• Failed Products - Many failed products such as 'Crystal Pepsi' hurt the

brand image of PepsiCo and thereby giving room for the competitors to

grow.

• Brand Ambassadors - Wrong feedback or sick overall performance by

well-known personalities/celebrities, in tum, may harm the brand image of

PepsiCo as they're the face of the organization. Over-dependence on

celebrities for endorsements is a massive risk.

• Value Addition - Pepsi is thought to have commercials that can be focused

in the direction of youngsters. However, it isn't recognized to display Value

advertising that's a feature of Coca-cola. Coca-cola has, again and again,

targeted the fantastic values of life, something which Pepsi can examine

from them.

• Unhealthy Product - As customers increasingly are choosing healthier

options, Pepsi and its competitors are losing customers.

Opportunity

• Healthy Options - They should implement extra fitness-specific ingredients

in their products and make the consumer aware of the same. Diet Pepsi is

a superb move in that direction.

• Diversification Business - Diversification into exclusive marketplace

segments is a massive opportunity. They have the talent, resources, and

economic backing to do the same. This can also be carried out through

acquisitions CSR: They can do more CSR activities to tackle the negative

remarks that hurt the brand image of the organization and benefit the local

people.

• R&D - Recently PepsiCo got here out with more healthy alternatives in soft

drinks. To make 7Up through the usage of the synthetic sugar known as

Stevia. This can become a game-changer. More such research needs to be

done. Focus extra on the weight loss program drinks category. They have

lately launched a variation in their cola sweetened with Stevia and sugar

known as Pepsi Next.

• Flavors - A brand that has risen strongly in the latest years is Paperboat.

Paperboat is thought of for its numerous flavors which include watermelon,

raw mango, etc. Bringing in such flavors even in carbonated beverage

shape can help Pepsi attract a bigger market.

 Threats

• Competitors - PepsiCo's main competitors are Coca-Cola, Kraft Foods,

Nestle, Dr. Peppers Snapple Group, and Mondelez.

• Health Factor - An unhealthy item associated with their product can

negatively affect health-conscious customers and they can lose them. This

is evidenced by the decline in sales of soft drinks.

• Economic Slowdown - With the recent reforms in the country PepsiCo

might see a drop in its sales due to a cash crunch in the economy. Other

factors such as recession and inflation may also impact the sales of the

company. Government Norms: Different norms of different countries might

prove difficult to handle and comply with it as well.

VI. Strategic Alternatives

a) Growth – The PepsiCo can use the Concentration Growth Strategy and

apply the Forward Integration to ensure to lessen the threat of new entrant

competitors or even the already existing companies since they broadened

their market range.

b) Stability – The suited Stability Strategy for the PepsiCo is the Profit

Strategy. This will make the company do nothing new but to remain gaining

profit.

c) Retrenchment – PepsiCo can use the Turnaround Strategy whenever the

company encounters a bigger problem that can be a threat.

 d) Best Strategy – The best Strategy will be in the Concentration Growth

Strategy and the Forward integration. This can broaden the PepsiCo more and

be more well known.

VII. Recommendation

The best suited strategic alternative will be the Concentration Growth

Strategy, the Forward integration. This can ensure not only to lessen the threat

of new competitors in the industry but will also help the PepsiCo gain more

insights from the people from other companies they will buy since there are

more workers to ask for opinions. The innovation of the product packaging can

also change and be more sustainable for the environment to fit the whole

organization and have unique yet still uniform packaging. Lastly, since they

will be broadening their market range, this can also be an opportunity to offer

and innovate products that will be healthy for all the target markets.

VIII. Implementation Program

a) Management Plan – In management plan, PepsiCo should always have

contingency plans so that whenever the situation gets rough or a problem

occurs, they can look for alternative solutions immediately. They should also

plan ahead what they can do to innovate and advertise their upcoming

products like how they do when they hired a popular Korean girl group

called Blackpink. This boost their sales because they keep up with the latest

trend which is engaging in K-pop industry. PepsiCo should also consider

 having a diverse work organization so that their employees can have a

variety of other insights from their co-employees.

b) Marketing Plan – The PepsiCo should focus on product development

strategy and develop new products for existing markets and new markets.

This can help them innovate more and bring out new products that can

attract customers while maintaining the other existing products.

c) Financial Plan – The suitable financial plan for this company is the equity

financing. Since PepsiCo is already thriving since then, maybe selling some

company stock can help them more to raise capital.

d) Operational Plan – In the operational plan, they can use Mass

Customization. This will help them fit their products more on what the

customers want and like. This can also resolve the health concerns on their

products since they can add healthier ingredients while maintaining the idea

of it being a soda or snacks.

e) Human Resource Plan – Having diversification in the work organization of

the PepsiCo will help because the employees can gain new learnings from

different perspectives and different ages or even different culture. This will

help them adapt and be more respectful with each other while having a

healthy competition within the company and help them boost the

productivity and work performance.

IX. Management Lessons Learned

We have learned that in order to grow, companies should really adapt to

new trends and make sure to incorporate innovation so that people will still be

loyal to them and not easily be bored of what they offer. Companies should

also make sure to be mindful to the environment and promote sustainability

because people nowadays are conscious and support on making the

environment better. Since PepsiCo has a lot of capabilities, they can grow

more and thrive harder in the industry with few changes in their products and

organization to make sure that they remain on top of the industry.

We have learned that the proposed marketing plan for PepsiCo includes

several key strategies. Firstly, they aim to focus on product development by

introducing new products for existing markets and exploring new markets. This

approach seeks to attract customers and drive innovation. Secondly, the

financial plan suggests utilizing equity financing, which involves selling

company stocks to raise capital for various initiatives. Thirdly, the operational

plan suggests implementing mass customization, allowing PepsiCo to

customize their products according to individual customer preferences while

addressing health concerns. Finally, the human resource plan highlights the

importance of diversification within the workforce to foster innovation,

adaptability, and a better understanding of diverse customer needs.

X. Bibliography

https://www.pepsico.com/who-we-are/mission-and-

vision#:~:text=By%20creating%20joyful%20moments%20through,prod

ucts%20and%20unique%20brand%20experiences.&text=By%20being%

20the%20best%20possible,growth%20unmatched%20in%20our%20ind

ustry

https://www.lifeissues.org/pdf/PepsiCopolicy.html#:~:text=PepsiCo's%

20Human%20Rights%20Workplace%20Policy&text=We%20do%20not%

20use%20compulsory,wherever%20we%20operate%20or%20work.

https://bstrategyhub.com/pepsico-swot-analysis/

https://fortune.com/advanced-search/?query=Pepsi%20market%20

https://fortune.com/advanced-search/?query=finance%20

https://fortune.com/advanced-

search/?query=Pepsi%20company%20capabilities%20

https://fortune.com/advanced-search/?query=Pepsi%20operations

https://fortune.com/advanced-search/?query=Pepsi%20resources%20