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.

Strengths, Weaknesses, Opportunities and Threats (SWOT) of

PepsiCo:

TYPE OF FACTOR

Favourable Unfavourable

Strengths

World’s second largest beverage and Food Company based on net revenue.

Strong market position Strong brand portfolio Strong growth in revenues and profits Innovative Marketing One of the biggest consumer products

companies in the globe with brands such as “Lay’s Potato chips, Taco Bell, Pizza Hut, Frito Lay and KFC.”

Weaknesses

Business concentration Does not have its corporate name

on many of its brands New launched products such as

regular soda and diet product are offered into markets without knowing their target demographic.

Far behind from Coca-cola in international market and its products demand is highly elastic.

Opportunities

Acquisitions and alliances Growing bottled water market Growing Hispanic population in US Significant opportunities within global supply

chain to encourage and develop more sustainable practices to benefit consumers, customers and suppliers

Bottled water consumption is increasing by 11%

Changing consumer lifestyle; by becoming health conscious and preferring substitute products.

Threats

Big threat from its primary competitor Cock because; coke is the world's largest beverage company, offering consumers almost 500 still and sparkling

Sluggish growth of carbonated beverages

Intense competition High oil prices 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.

Changing consumer lifestyle; by becoming health conscious

Different government regulations in different market