The SWOT Analysis: Pepsi

The SWOT abstract PepsiPEPSI is an international player in the spongy booze securities industry and operation across the world. In 1893, PepsiCo started its manufacturing in 1893. It got a untested name as Pepsi-Cola on August 28, 1898. Then in 1961, it was ultimately named as Pepsi. Initially it was commercialiseed as Brads Drink. The substitutes available in the identical foodstuff be as follows1) Coca-Cola2) Cola Turka3) Big Cola4) RC-ColaIn every segment of the target market, Pepsi is gamyly favorable. Due to its wise bedc everyplace use at homes, ceremonies and during travels, it has been chosen for this project.Problem StatementIn these days, commission at the alliance has observed a significant delay in the sales of their harvest-home, Pepsi in this case. The demand for the event has withal declined with age. These business managers throw off proposed different factors affecting this problem. For instance1) A relatively veracious savouring of Rival Products 2) Improved rate of Competitors Products3) Low Price Rival Product4) BetterPremeditatedDevelopment of Rival Companies wherefore Company Managers defend comprehended the affect of RE-FINANCING STRATEGIC MANAGEMENT PLAN.It evaluated the companionship processes on the side by side(p)s fatorsSWOT ANALYSIS gent5 Cs (company/collaborators/ customers/mood/competitors)4/7 Ps-product, impairment,place,promotion, mountain,process,physical purlieu.Market AnalysisIn the cold confuse market, some of the players wereDistributersRetailersCustomersSuppliers and CompetitorsWith the entrance of bleak(prenominal) players into the market, there can turn in threats or benefits. In the case of Pepsi, this was of a significant value. We will analysis these factors as entrance to barriers on the SWOT basis.SWOT ANALYSISPEPSIStrengthsBrandingThe postmortem brand of PepsiCo is Pepsi. In 2008, it got ranked at the 26th fructify knocked out(p) of 100 top brands of the world.The value of annual sale s is $15000 one thousand million different brands of the company imply Diet Pepsi, Gatorade toilet Dew and have the presence in oer 200 countries.In the US beverage industry, it has a market shargon of 39% and 26% in the Snacks Industry.A large affinity of the sales is accumulated through these brands.DiversificationThe diversification embarrasss the aspect that separately top 18 brands of PepsiCo generates approximately $ molarity million of annual sales. diffusionThe wider distribution network of Pepsi works such that the manufactured product is delivered to warehouses, whence to customers ware houses and then to retailers.WeaknessesOverdependence on Wal-MartPepsiCos largest customer is Wal-Mart. Wal-Mart operates through low price themes which indirectly put pressures on Pepsi to lower down its prices in conformance with its biggest customers.Overdependence on USMarketsThe US market generates around-+ 52% of Pepsis total revenues.Low productivenessLow productivity is ev ident from the fact that in 2008, the revenue that it generated was $219,439 per employee. It was importantly lower than its rivals in the market.Opportunities amplification of Product BasePepsiCo is pursuing to get away with unmatched of its study weakness enslavement on US markets by getting Russias topJuice Company, Lebedyansky, and vwwater in the UK. In this way, it would be able to increase its product ground in a more(prenominal) competitive market.International ExpansionCurrently PepsiCo is augmenting by making fit outment in China ($1000 million) and India ($500 million). This points out towards the fact that it is trying to increase its international base and lower its dependency on the US market. The future plans include expansions in Brazil and Mexico through huge investments.Growing Savory Snack and Bottled peeing Market in USThere is a huge potentiality for PEPSICO to capitalize on the expanding bottle water market which is expected to have a $24 star thousan d thousand volume by 2012.ThreatsSharp come down in the Sales of Carbonated DrinksThe sales of well-fixed jollifys have decrease significantly.Though PepsiCois experiencing diversification but it projected that it would be facing the impact of this decrease. come-at-able Negative Influence of Government RegulationPepsiCo can be negatively stirred as the state and central laws would hinder its operations in market, sales and manufacturing.Powerful CompetitionThe one major competitor of PepsiCo in the market is Coca-Cola. Nestle and Marina is overly counted as its rivals. The intensive, edge to edge arguing in the market can affect pricing policies, marketing, sales and other promotion strategies put forward by the company. For instant the sales of succus has significantly increased for Coca-Cola as compared to Pepsi.Potential Commotion Due to mash UnrestPepsi Co is susceptible to find outs and other labor disputes. For example, a strike in India in 2008 had prevented the ma nufacturing for almost a month. These can exacerbate problems for the company.PEST ANALYSIS PEPSIA particular business is dependent on an environs to get its revenues for the goods and services that it provides. These purlieus can both be external or indispensable.Political Environment PepsiTo run a successful business, PepsiCo is dependent on the ordinary policy as it is one of the largest multi nation companies in the world. gum olibanum an active participation is essential for the company towards the deliberations of public policy.Political conflict PolicyCitizens Fund (CCF) is the respective(prenominal) entity of PepsiCo that gets voluntary employee assistances to make political cause contributions to Federal and state political parties, PACs and electoral candidates.These actively help the company to take part in the democratic process in the country. frugal Environment PepsiThe Primary responsibility of the company, PepsiCo, is to take the necessary measures to preserve the sustain readiness of the environs in which it works for instance ecological environment, social and economic.Pepsi Co is witting of the critical role that agriculture plays towards different aspects of the business operations.Pepsi Co also recognizes the dangers emerging out of the shortage in solid food supply and the respective food security threats.Social Environment PepsiThe unique social environment at Pepsi Co is very desirable where its sight are operative together for a sustainable present of prosperity. This, in turn, would be salutary for Pepsi itself.Its promise is to provide the localize versions of its products by keeping in creative thinker the preferences of the local communities in which the business is operating.Technological Environment PepsiTechnological advancements have helped PepsiCo to enhance its production capacity. Therefore it is making full use of the new technology. PepsiCo is getting a key help through advancements in IT. spot Analysis PepsiIt is very necessary for a company to satisfy the of necessity of its customers while maintaining the profitability through sales. This can be achieved if company keeps wipe of all the internal and external factors in that environment.5Cs provide the Situation Analysis for a particular firm operating in a particular market.These are as followsCompanyProduct lineImage in the marketTechnology and ExperienceGoalsCultureCollaboratorsDistributersSuppliersCoalitionsCustomersMarket size and exploitationMarket SegmentsRetail channel-where does the consumer actually purchase the product?Consumer Information Sources-where does the customer obtain information about the product?Rate of Purchase, seasonal factors bill purchased at a timeTrends-how consumer needs and preferences change over timeCompetitorsReal or PotentialDirect or IndirectProductslocatingMarket SharesStrengths and Weaknesses of competitorsClimate or ContextThe climate or macro-environmental factors arePolitical and Regulatory En vironment Which specific policies affect the company sparing Environment business cycle, inflation rate, interest rates, and other topicsSocial/ heathen Environment Trends and fashions in a particular societyTechnological Environment The relationship between demand and the impact of technology7 Ps -Product,Price,Place, procession,People,Process, Physical Environment Pepsi7 Ps are called Marketing pleat and help in meeting marketing objectives for a company.Pepsi-ProductThe cola assimilate includes the ingredients such as carbonate water, high fructose corn syrup, sugar, colorings, phosphorous acid, caffeine, citric Acid and natural flavors.Following are the popular brands of PepsiCoPepsi Twist, Pepsi Tarik, Pepsi Samba, circle Dew, etc. reversal v/s Pepsi-ProductPepsi and Coke are the major rivals in the market and compete against a verity of products in the marketCOKEPEPSI1) The dark colored Cola drink initiated the rivalry with Pepsis carbonate drink1) Pepsi too has a cola ver sion of carbonated drink which competes against the coke2) Vaultwas released by the Coca-Cola company in June 2005. It is a carbonated drink.2) Mountain Dew MDXis the version released under Mountain Dew in 2005 afterwards a new marketing campaign3) Spriteis a clear lemon- time flavored easily drink manufactured by the coca-cola company.3) 7 UP is a lemon carbonated drink competing with Sprite4) Diet Coca-Colais a sugar free soft drink produced and distributed by the Coca-Cola Company4) Diet Pepsiis a low-calorie carbonated cola.5) Fantais a soft drink citrus brand owned by The Coca-Cola Company.5)Mirindais soft drink brand owned by PepsiCo and it competes with FantaTable Coke v/s PEPSIPricePrice is the monetary value of a good in a particular currency. Pricing is the major portion of the marketing mix. Before the entrance of PepsiCo in the market, Coke was the yet player in the market nd it directed the price of the cola drink. The argument emerged after the entrance of Pepsi. Now the price is determined on the basis of competition between Coke and Pepsi. Pepsi portrays a flexible attitude and cut downs its prices at times. This has also incurred some loses for Pepsi due to the risks attached. Though the lowered prices would attract more customers, it also badly affects the production cost which becomes difficult to cover. This was an early anatomy situation for Pepsi but now it has recovered due to the rapid addition that it is making.PlaceIn marketing, is a geographic location, an industry, a group of spate to who company sine qua nons to sell its products. Pepsi alike(p) Coke has its network all over the world. Pepsi has joined forces with companies like Quaker Oats,Lipton etc. It runs ads in different localities of the world.PromotionPromotion encompasses 4-subcategoriesAdvertisingPersonal sellingSales Promotion forwarding and Public RelationsA promotional strategy can includea) Sales Shootoutsb) New product receptionc) Brand Equity resultd) Po sitioninge) agonistic retaliationsf) Creation of a corporate imagePepsi and Coke have a special status regarding their promotional activities.The rivalry was initiated when Pepsi started its art taste challenges. It took the method of a taste test at public places like shopping malls, community centric hubs etc. By throw in people taste both the colas, they asked the people to select the preferred one so that people would buy Pepsi.The following chart provides a comparability between Pepsi and CokeFigure Price ComparisonPeople- PepsiPepsi has deeply affected the lives of people by changing their preferences.Process-PepsiProcess involves the transformation of inputs into outputs. With the latest technology, pepsi has helped people to get a much better carbonated product.Physical Environment-PepsiThe internal and external environment has been affected by the operations of Pepsi and it holds a well-established position for that.THE RE-FINANCING STRATEGIC MANAGEMENT PLANIt is the p articular strategy of framing, executing and gauging decisions that allow an organization to meet its objectives.The making and designing of a strategy includes the followingVision and Mission(the target of the business)Strength and WeaknessOpportunities and threatsThe contemplations for top strategy qualification areAllocation of resources channel to enter or retainBusiness to divest or liquidateJoint ventures or mergersWhether to expand or notMoving into foreign marketsTrying to avoid take overHRM and outlineStrategists are individuals who are most responsible for the success or failure of an organization. They are individuals who form strategies. They have various job titles, such as CEO, President, owner etc.Pepsi- Vision StatementPepsiCos responsibility is to continually improve all aspects of the world in which we operate- environment, social, economic-creating a better tomorrow than todayPepsi Cola Mission StatementOur mission is to increase the value of our shareholders in vestment. We do this through sales growth, cost controls, and wise investment resources. We turn over our commercial success depends upon whirl quality and value to our consumers and customers. Providing products that are safe, wholesome,economically cost-effective and environmentally sound, and providing a fair return to our investors while adhering to the highest standards of integrity.Types of StrategyCompetitive Advantage PepsiBy taking our competitive strengths, and investing in them to arrive at longer-term value to sustain growth. PepsiCo has 3 key advantagesbig, muscular brandsthe proven ability to innovate and create differentiated products , andPowerful go-to-market systems.Cost AdvantageIt is the world-wide leader in savory snacks, and those snacks can be paired with its beverages in the marketplace. Those pairings will enable PepsiCo to provide unique offerings to retail and foodservice customers.Market say-soIt is one of the worlds most familiar consumer food and beverage companies, offering brands like Frito-Lay, Gatorade, Tropicana and Quaker. The Coke vs. Pepsi conflict raged on for decades across the country on supermarket shelves, firm food restaurants and the like.New Product DevelopmentPepsi As a consumer-focused company, we want to enrich the lifestyles of our consumers while increasing the local relevance of the products we make. We recognize the need to understand and respect local cultures, rituals, patterns and intake gaps when developing delicious-tasting convenient and inexpensive products for consumers in that market. For example, in India, we have introduced a whole-grain product for breaking the abstain around the observance of Ramadan. In China, we have introduced congee (with whole grains and cut sodium) as a locally relevant breakfast offering to confer nutritional value to the Chinese diet, and were introducing products made from grains in sub-Saharan Africa as a change from those made with plain flour.Contraction/D iversificationIndraNooyi, PepsiCo lead and Chief Executive Officer, said, Our results this quarter reinforce the advantages of our balanced portfolio, as our food and international businesses delivered solid performance while we continued the transformation of our compass north American beverage business.As part of its strategy to grow in key markets, the company recently announced plans to invest $1 billion over the next four geezerhood in China, PepsiCos highest priority growth market. And, in Russia, PepsiCo along with its partner The Pepsi Bottling Group, Inc. announced a plan to invest $1 billion over the next three years.Price leaders StrategyAn observation made of oligopolistic business behavior in which one company, usually the dominant competitor among several, leads the way in determining prices, the others concisely following. The context is a state of limited competition, in which a market is shared by a small number of producers or vendors.Pepsi- spheric StrategyI t is not just another beverage on the spacious shelf of choices. Pepsi made a decision years ago to transform its offering and branch into the global arena. Pepsi is an American multinational corporation headquartered in Purchase, New York. It is a manufacturing company distributing beverages and snack foods across 200 countries.Pepsi-Reengineering StrategyReengineering initiatives typically lead to a business organization with these characteristics1. Business processes are simplified rather than being made more complex.2. Job descriptions expand and become multi-dimensional people perform a broader range of tasks.DownsizingPepsiCo Inc. is considering press clipping approximately 4,000 employees and reducing pension contributions in order to increase their income.Citing a source, reported the New York Post, quoted by Reuters on Friday (06.01.2012), currently the company offers retreat plans and matching contributions to 401 thousand hideaway savings account.One of these large c ompanies believes that by offering both of these are an act that is more generous.Pepsi-party claims when 401 thousand by eliminating the retirement savings account that will save the company up to USD75 million. The layoffs, accounting system for approximately one percent more than the payroll company, will include a small number of workers at its supply.DelayeringTo lessen the size of a business hierarchy, especially in terms of a reduction in direction. This creates a flatter(less layered) organizational structure.There have been numerous cases of companies delayering their organization structures over the past few years. Many of these companies include industry leaders seldom satisfied with their past success, continually searching to improve all facets of their business, including their management structure. Recent examples of well-known companies that have delayered include Pepsi-Cola, Hewlett-Packard, Corning, Tenneco, and General Electric, to name only a few.RESTRUCTURING PepsiCo Inc. plans to cut 8,700 jobs in a restructuring as it seeks to offset high commodity costs and increases investment in advertising and marketing in North America.Its a lower figure than sources had expected. Of PepsiCos 100,000 U.S. workers, about 2,000, or 2 percent, are on the chopping block, say knowledgeable sources, a figure Mr. Nicolas couldnt like a shot confirm. Some 1,800 people work at the West Loop headquarters of Quaker Oats, Gatorade and Tropicana. Other PepsiCo teams plus its global nutrition group also are in Chicago. Mr. Nicolas declined to comment on specific jobs or people before the company notifies workers of their status this week.The Financial AnalysisPepsi Bottling Group is the worlds largest manufacturer, seller and distributor of Pepsi-Cola beverages. With annual sales of nearly $11 billion, the companys fastest ripening segment is non-carbonated beverages, including the number one brand of bottled water in the U.S., Aquafina, as well as Tropicana juice drinks and Lipton Ice Tea. As part of a 24/7 production operation, the companys Detroit plant ships about 27 million cases per year.Production at the plant begins as empty bottles are deliver from trucks via conveyor and transported to a depalletizer. From there, they are, rinsed, dried and sent to a filling work (filler speeds at the plant vary based on bottle size, ranging from 350 to 1,000 bottles per minute). The bottles dedicate the fillers and make their way to a packaging machine, and then to a palletizer. to each one pallet is wrapped for distribution and moved to the warehouse for shipping.We can demonstrate the statement of financial position of PEPSI Inventory (raw materials) in different years in the following chart.Figure Financial Position of PEPSI Inventory (raw materials)