Implementation of strategic management tools and strategies

Name: HASEEB ULLAH

ID : 5801Semester: 5th

Selected company: PEPSICO

Topic : Implementation of strategic

management tools and strategies

IntroductionHistoryObjectives and GoalsVision and Mission4 P`sSegmentationSWOT AnalysisBCG matrix G.E model Space matrix QSPM matrix

Introduction

Mountain Dew is a carbonated soft drink produced by PepsiCo.

The original formula was invented in 1940.

History

The Hartman brothers developed Mountain Dew in the 1930 mixing soda in whiskey.The original formula was invented in 1940 by Tennessee beverage bottlers Barney and Ally Hartman.

William Hartman JonesFounder of Mountain Dew

Objectives and Goals

To build mutual trust with consumers.To ensure continuous improvement of PepsiCo's environmental performance.To fulfill customer satisfaction.Measuring the cost and benefits to business of it`s activities.

Vision statementPepsiCo's vision to grow Mountain Dew in the shortest possible time to number one in pakistan with a unique ability to capture consumers of youngsters.

Mission statementPepsiCo`s mission is to provide the best food and beverage to people throughout the world and gain high market shares

Marketing mix(4 P`s)

1. Product-- soft drink2. Place -- available every where3. Price-- reasonable price4. Promotion--T.V, Newspapers, billboards And internet.

Segmentation

SWOT Analysis

Strength

1. Strong brand awareness, recall through memorable advertisements2. Unique taste and clear positioning attracts a strong brand following3. International brand with lot of resources to grow in the markets4. Good distribution and availability of the product5. Strong brand name of the parent company adds value

Weakness:1. A lot of investment is required for branding exercises2. Stiff competition means limited market share Opportunities:1. Innovate a new healthy drink with citrus fruit flavor2. Multiple flavors already exist in foreign markets – launch them here

Threats:1. Sprite, its strongest competitor is well entrenched in the market2. Pepsi may cut its marketing budget in the future3. Lot of local drinks and Nimboo based brands are posing a threat.

S1 Strong brand awareness2 Unique taste and clear positioning3 International brand/ resources4 Good distribution & corporate brand

W1 Market for soda products is crowded

2. Stiff competition means limited market share

O1. Innovate a new healthy drink with citrus fruit flavor2. Multiple flavors already exist in foreign markets – launch them here

S1.O1 strong brand name Achieve new healthy drink.S4.S2 launch international product in Pakistan

W1.O3 healthy product can be innovated W2.O4 product related to sport can be launched

1. Sprite, its strongest competitor is well entrenched in the market2. Pepsi may cut its marketing budget in the future3. Lot of local drinks and Nimboo based brands are posing a threat4. Word demand for sport drink energy drink

S1 .T2 Pepsi can reduce marketing budget S3.T3 international brand can competitors

W1.T2reduce expenses related to different department W2.T3 position through local media

Suggested strategies by SWOT

• Market Penetration • Market development • Horizontal diversification

CPMfactors Weightage rating Total

scorerating Total

scorerating Total

score

Market share 0.20 5 1.00 4.5 0.90 3.5 0.70Distribution channel 0.15 4 0.60 3.5 0.52 3 0.45Pricing strategy 0.20 3 0.60 3 0.60 3 0.60HRM 0.15 4 0.60 4 0.60 3.5 0.52Cost reduction 0.15 4 0.60 4 0.60 4 0.60Advertising 0.10 5 0.50 4 0.40 3.5 0.35R & D 0.10 4.5 0.45 3.5 0.35 3.5 0.35total 1.00 4.35 3.97 3.57

PEPSI COKE Sprite 3g

PESPI = 4.35 COKE= 3.97 sprite 3g=3.57All companies result is above than average but PEPSI lead the market.

Financial Strength (FS)(+1 worst, +7 best)

Environmental Stability (ES)(-7 worst, -1 best)

Return on investment 6 Rate of Inflation -2Leverage 4 Technological Changes -4Net income 5 Price Elasticity of demand -1Working Capital 3 Taxation -5Inventory turnover 3 Barriers -2FS average 5.2 ES average -2.8

Competitive Advantage (CA)(-7 worst, -1 best)

Industry strength(IS)(+1 worst, +7 best)

Market Share -1 Growth potential 6Product Quality -1 Financial stability 7Customer Loyalty -3.5 Ease of entry to market 1Tech know How -1 Resource utilization 6

Control over suppliers & distributers -1 Profit potential 5CA average -1.5 IS average 5

Space matrix

Suggested strategies by SPACE matrixSpace Matrix

CA IS

FS

ES

Aggressive

Defensive Competitive

Conservative

X= CA+IS = (-1.5+5) =3.5Y= FS+ES = (5.2+-2.8) = 2.4

Suggested strategies

1. Market development2. Counter offensive3. Product development

BCG Matrix

IIStars

(Mountain dew)I

Question Marks

IIICash Cows

BataIV

Dogs

High 20+

Med. 0

Low -20

Indu

stri

al S

ales

Gro

wth

R

ate

Relative Market Share Position Low 0.0High 1.0 Med. 5.0

Suggested strategies by BCG matrix

1. Market development2. Market penetration3. Product development

General electric model

Strategic business unit Sale Demand Brand image Market share Quality Product innovation

Market attractiveness

Competitive intensity and competitive intelligence.

Historical Profit Margin Environmental Situation Economic Situation Customer Specification

High Medium low

High

Medium

low

Business unit strength Market att

ractivene

ss

65%

Suggested strategies by GEM matrix

• Market development• Product development• Counter offensive strategy

Strategy summary

Alternative strategies SWOT space BCG matrix GEM matrix

Count

Product developement 1 1 1 3

Market development 1 1 1 1 4

Horizontal diversification 1 1 1 3

Counter offensive 1 1 2

QSPM matrix (fixed method)

Key internal factors weight Product developement

Horizontal diversification

Market development

strength

Strong brand awareness 4 2 1 3

Unique taste and clear positioning 4 3 2 4

International brand/ resources 4 3 1 3

Good distribution & corporate brand 4 3 2 3

weakness

A lot of investment is required for branding exercises

4 2 1 3

Market for soda products is crowded

4 1 1 2


Horizontal integration

Market developement

opportunitiesInnovate a new healthy drink with citrus fruit flavor

4 3 3 2

Multiple flavors already exist in foreign markets – launch them here

4 2 2 3

ThreatsSprite, its strongest competitor is well entrenched in the market

4 3 2 3

Pepsi may cut its marketing budget in the future

4 2 1 2

Lot of local drinks and Nimboo based brands are posing a threat

4 2 3 3

Sum of total attractiveness score 26 19 31

Conti…



Market development

strength

Strong brand awareness -4 2 3 3

Unique taste and clear positioning -4 1 2 4

International brand/ resources -4 1 3 3

Good distribution & corporate brand -4 1 2 3

weakness


-4 2 3 3


-4 3 3 2

QSPM matrix fixed method (negative)

Key external factors weight Product developement


Market developement


-4 1 1 2


-4 2 2 1


-4 1 2 1


-4 2 3 2


-4 2 1 1

Sum of total attractiveness score -23 -28 -20

Conti…

QSPM matrix (variable method)



Market development

strength

Strong brand awareness 10 8 5 8

Unique taste and clear positioning 8 5 4 8

International brand/ resources 12 8 7 12

Good distribution & corporate brand 7 5 6 4

weakness 7


12 6 8 12


10 7 8 10



Market developement


12 10 8 10


15 9 9 14


10 8 7 9


9 8 7 8


12 11 6 10

Sum of total attractiveness score 80 75 90

Conti…

QSPM matrix (variable method)



Market development

strength

Strong brand awareness -10 2 5 2

Unique taste and clear positioning -8 3 4 3

International brand/ resources -12 4 5 2

Good distribution & corporate brand -7 2 1 3

weakness


-12 6 4 2


-10 3 2 3



Market developement


-12 2 4 2


-15 6 6 1


-10 2 3 1


-9 1 2 1


-12 1 6 2

Sum of total attractiveness score -32 -42 -23

Conti…