Pepsico Strategic Management

PepsiCo Strategic Management Case

1) Strengths :

- Ranked 21st in the Fortune 500

- International sales of $29.3 billion

- Markets more than 500 varieties of food and beverages

- Distributed in more than 200 countries

- Third largest food and beverage company in the world

- 16 brands produce more than $1 billion annually

- Loft Company purchased Pepsi Cola in 1931.

- Launched first radio jingle in 1939

- Well diversified

- Dedicated to growth

- Frito Lay is the world's largest seller of snack foods

- Beverages count for 1/3 of carbonated beverages sales in U.S.

- Joint ventures with Lipton and Starbucks

- Concentrates on emerging markets rather than going after markets already held by Coca Cola

Weaknesses:

- No vision statement

- Bad press associated with Wow! Potato chips and Olestra

- Poor choices in acquisitions in the past such as North American Van Lines and Wilson Sporting Goods, both of which were sold off in 1985.

- Hasn't been able to consistently achieve 15 or more percent annual increase in earnings since 1996.

2) Opportunities:

- Production of energy drinks to compete with Red Bull or Rockstar

- Creating more diet beverages to accommodate market growth in diet soda category.

- Create or acquire an alcoholic beverage division. None of the top three soft drink makers make alcoholic beverages.

- Creation of more health foods in Frito Lay division

- Use completely recycled materials in packaging and take steps to reduce the carbon footprint the company makes.

Threats:

- Coca Cola is the number one company in the soft drink market, competition from this brand is the largest threat.

- Healthy alternatives to sodas as competition; bottled water, teas, and sports drinks.

- Sugar and other raw materials prices fluctuate over the years.

3) Strategic Statement

I. Products Goods or Services

Frito Lay-Snack foods

PepsiCo Beverages North America - carbonated and non carbonated beverages