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Wednesday, 27 June 2012

SWOT Analysis of Pepsi Company


Pepsi is the world’s second largest beverage and food company based on net revenue. In North America it is first largest Beverage and Food Company by net revenue. PepsiCo is a multinational Corporation, offering manufacturing, distribution and marketing of soft-drinks, beverages, grain-based snack foods and other products.

PepsiCo has many diversify business units such as soft drinks (Pepsi, Slice, Mountain Dew), beverages (Tropicana Juices, Dole Juices, Lipton tea, Aquafina bottled water, Sport drinks, Tropicana Juices), Snacks (Rold Gold pretzels and Frito-Lay). In 2009, nineteen product lines of PepsiCo's achieved revenue of greater than $1 billion each, and its products are distributed more than 200 countries, by achieving annual $43.3 billion net revenue. As of 2010 it has more than 285,000 employees globally. Here is the SWOT analysis of PepsiCO.

Strengths

In 2009, nineteen product lines of PepsiCo's achieved revenue of greater than $1 billion each, and its products are distributed more than 200 countries, by achieving annual $43.3 billion net revenue. As of 2010 it has more than 285,000 employees globally.

Pepsi is the world’s second largest beverage and food company based on net revenue. In North America it is first largest beverage and food company by net revenue.

PepsiCo is a multinational Corporation, offering manufacturing, distribution and marketing of soft-drinks, beverages, grain-based snack foods and other products.

Diversify business units such as soft drinks (Pepsi, Slice, Mountain Dew), beverages (Tropicana Juices, Dole Juices, Lipton tea, Aquafina bottled water, Sport drinks, Tropicana Juices), Snacks (Rold Gold pretzels and Frito-Lay).

PepsiCo has adopted the globe’s most powerful “go-to-market systems”, serving more than 10 million outlets a week by operating greater than 100,000 different routes, and producing more than $300 million in retail sales per day.

Pepsi has the 25 percent of the world’s soft drinks with more than 70 percent of its revenue coming from North America.

On 14th March 2012, PepsiCo announced that its worldwide "Banner Sun" potato chip portfolio has earned annual retail sales of more than $10 billion; it is the world's number one potato chip brand and biggest largest food brand.

Innovative Marketing: It has leveraged its worldwide brand-building strength to attach with consumers in significant ways and impel the growth globally.

Packaging for products has developed into a sign for quality potato chips all over the globe.

It has most dominant global snack chip division Frito-Lay by having five leading snack chip products.

In world PepsiCo has larger number of restaurants than any other corporation; nowadays it has become one of the biggest consumer products companies in the globe with world recognized brands such as “Lay’s Potato chips, Taco Bell, Pizza Hut, Frito Lay and KFC.”

Pepsi continuously focusing on increasing its biggest beverage and food products, it has built some of the globe’s strongest brands that are loved by consumers throughout the world.

PepsiCo has the policy to recruit the person from all over the globe that it has achieved.

Weaknesses

During the 1970s and 1990s, PepsiCo had unsuccessful acquisition of diversify businesses outer of its primary businesses of packaged food and beverage brands.

In the beverage industry it had losses but and trying to built a new and prevailing beverage company.
PepsiCo is continuously fail to grant road-map for being a big global corporation and stir vision

PepsiCo does not have its corporate name on many of its brands.

PepsiCo’s new launched products such as regular soda and diet products; it appears that they are offered into markets without knowing sufficient regarding their target demographic.

In international market PepsiCo is far behind from Coca-cola and its products demand is highly elastic. It adopted coke’s strategy to survive in global market.

Opportunities

Facing sluggish market growth rate in its base grocery business, packaged-food organizations are gradually more spinning to snacks as an opportunity for growth.

Snacking "is a long-term trend and the future of eating," it is projected that growth in snacks market would be reached at the $560 billion.

Big opportunity by exploit on US market, because American consume more snacks during the day, and changing trends in developing markets, for instance growing of modern retail formats and females are entering the workplace.

According to analysts, after adding some value Snack prices can be raised more easily. Players can offer lower and premium priced chips to its portfolio to exploit on more growth in price ranges.

PepsiCo has significant opportunities within global supply chain to encourage and develop more sustainable practices to benefit consumers, customers and suppliers. While; it is still in the premature stages of exploring these opportunities and dedicated to the economic vitality and health of the farming communities our supply chain engages.

It is highly difficult for the new entrants to enter in the soft drink industry because of some factors such as brand image and loyalty, bottling network, advertising expense, retail distribution and fear of retaliation.

World population is expected to grow at 8 billion 2025, and 9.2 billion by 2050. Nearly 99% growth will take place in developing countries.

Focusing on its advertising and differentiation can increase its profits. Bottled water consumption in increasing day by day, 11 percent growth is reported.

Pepsi promotes and support sustainable agriculture not only because it makes good business sense, it purchase million tons of potatoes and fruits.

Changing consumer lifestyle; by becoming health conscious and preferring substitute products. Coke can relatively diversify and offering health conscious products.

Higher growth rate in American nonalcoholic beverage market, with fastest grow rate in fruit beverages.

With innovative marketing beverage and food players can build growth for their brands by highlighting their benefits, for instance healthiness in the cases of caffeine-free drinks, diet and snacks.
 
Threats

PepsiCo has the big threat from its primary competitor Cock because; coke is the world's largest beverage company, offering consumers almost 500 still and sparkling. Coke has the world's largest beverage distribution network; consuming in more than 200 countries enjoys the Coke’s beverages at an average of nearly 1.6 billion servings a day. In 2011, Coca-cola was declared the world’s most valuable brand according to Interbrand’s best global brand. The Coca-Cola is the world's largest beverage company, offering consumers almost 500 still and sparkling.

Smaller snack players such as General Mills and ConAgra foods would try to get larger market share, can be a big threat for players like PepsiCo.

Pepsi is facing the tough competition from local brands in all over the world such as in Central and South America Kola Real also known as Big Cola in Mexico is giving tough competition to Pepsi etc.

Large numbers of substitutes are available in the market such as water, tea, juices coffee etc.

PepsiCo is facing different regulations and policies set by government in different countries.

Low growth rate in carbonated drinks, which is recorded less than one percent in primary market of Pepsi.

Changing consumer lifestyle; by becoming health conscious and preferring substitute products. Different studies has been conducted and found carbonated drinks harmful if consumed excessively.

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