Pepsi have to make sure that the market keeps growing annually, and that company products are available everywhere. For over a century, PepsiCo has profited off its brutal combination of sugar, fats and salt despite the known consequences to consumers’ health and the company’s incredibly destructive and opaque supply chains. I. VAT Registration No: 842417633. PepsiCo comprises several food and drink brands, many of which have been making the same product for decades. PepsiCo makes money selling salty and sugary foods and whatever aims it has stated in Performance with Purpose, it cannot get away from this, says Michele Simon We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Its external issues consist of its products as reaching maturity stage industry… Specifically, by forming a strategic alliance with Starbucks – a global coffee house chain, PepsiCo has been able to claim its share from increasing energy drink market segment. One such case involves the legal battle between Pepsico … PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Pepsico… Their prices are affected by the local currency. Definition of the Issue The PepsiCo-2005 case study has several issues revolving it. It has to be very careful with the possible problems with the governments and those which could rise from PepsiCo act with the people of KSA. In PepsiCo’s case, the following are the most significant threats: 1. PepsiCo is a company that intends to continue its growth by strategically increasing its participation in the healthy food market; in this process, the company has faced many challenges and setbacks that add an interesting perspective for this review. Coca-Cola Co. and PepsiCo, Inc. are very similar businesses in terms of industry, ideal consumers, and … In addition to its large consumer base, Saudi Arabia has some of the region’s biggest athletic clubs, most passionate sports fans, and has a growing population of athletes and active people. According to Interbrand [7] and Forbes [8] , the Pepsi brand is the 22nd and 30th most valuable brand in the world, worth US$20.491 billion and US$18.2 billion, respectively. As said earlier, many of PepsiCo’s brands are relatively unhealthy. PepsiCo can enhance its corporate social responsibility activities to enhance the sustainable use of renewable resources and tackle issues affecting consumers directly, which strengthens loyalty while attracting new customers. Inflation, economic stability, and taxes affect PepsiCo. “Our strategy is very clear on this. PepsiCo has trouble standing against the health industry. PepsiCo, the food and beverage behemoth with $63 billion in annual revenues, is best known for their carbonated soft drinks.But consumers’ … Registered Data Controller No: Z1821391. Coca-Cola, the major competitor of Pepsi has been exiled from the desert kingdom. Do you have a 2:1 degree or higher? PepsiCo has made strategic investments to grow its portfolio in global markets like Africa and China, which could increase business travel costs. Initial tests showed that the high level of automation provided on location allows PepsiCo to service 7.5 times more units an hour than a traditional e-commerce warehouse operation. Pepsico was formed in 1965 after the merger of Pepsi and Frito-Lay. Aggressive competition 2. PepsiCo has interests in the manufacturing, marketing, and distribution of grain-based snack foods, beverages, and other products. Pepsi is inferior in its fountain drink division. 16th May 2017 Commerce Reference this Disclaimer: This work has been submitted by a university student. Revenue distribution in international markets. Since then, the brand has continuously worked on transforming its portfolio and to grow its popularity and market share. Coca Cola has been in the top locations for fountain beverages because of their ownership in Taco Bell, Pizza Hut, KFC, and many others. PepsiCo was founded in 1965. For the first quarter of 2018, the company reported sales of $12.6 billion with organic revenue growth of 2.3%. However, half of its revenues come through its food division with brands such as Doritos, Quaker, and Frito-LAY. Successfully Navigating The Global Economic Crisis. PepsiCo adopted the strategy of offering its products affordable prices to the customers. When PepsiCo started its own Pepsi Bottling Company, it allowed them to cut costs, reduce overhead, and coordinate their distribution to create a better synergy. Successfully Navigating The Global Economic Crisis. Strategic Management Essays, Term Papers & Presentations Pepsico, Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. On the hand, PepsiCo has focused on the differentiation of its products and services for increasing the reach to the customers. °ÿ݀ZGÉOll¨*A€B¾¤V³˜vÿ6‡¦ÊÎmd™XɧÍ&)}å•Y«Z0){XO_mNÐRažâßJQä’-·/jéü’„Í^¢ýQ—FZbܲk•¢óOš*h?þ[ie'WÚx}^,¥ŠÒ|X/ËÉþ¦c˜a^e2‹3²ù *dšÒI8è”j¯fHÁih€«È"Å(ŒíÀLö²•æ"f[̑œÍÕeF­` 1+åó²j"k³J­@°/ ¢œE3"saT%˯«ÔP×*År"¢åùr"ËÓ,t5 oœ™Bu©¡‡åP°ý`%.N¾h>—sCI=8Ÿ“MAgwI©d‡•N|Þ~ßcj^‹ÅØlU'?unvßvìpÚAÈ]òfŸ¶§ifÀüQn*kkkçs `Cµ#03ç×sš½áÐáÊäf—©[ó„ZÆÑ©^d⎄in*¢6’&j* ¯OŒ^]àٔ#¼¬j. PepsiCo’s sustainability agenda focuses on six overlapping priorities within our food system. Zm4S‹3Bßï‘ï¹»ú4nàç,÷kJí„^ úG1òÈ1¡@:r!†öÂx¦!A¥®b¨‘OuÇÈYÞÌR$]èû±{MúàKûC±12,ïBäK To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! In 1993, about 7% of Pepsi-Cola International’s sales came from Saudi Arabia. The case study shows the challenges faced by the company due to innovation. As Pepsi is US product and these days US and foreign products are campaigned not to be used to show rage against non-Muslim acts. PepsiCo’s values are the reflection of their stand on social and environmental issues, and what the company wants to be known for. PepsiCo Internal Analysis #5 : What Strategic Issues and Problems Merit Front- Burner Managerial Attention? Plan A) Strategic Marketing Mission PepsiCo is the second biggest player that dominates the soft drink industry just after Coca-Cola. "Given PepsiCo's robust growth in recent years, we are approaching a size which we can better manage as three units instead of two," said Indra Nooyi, chairman and chief executive officer. ‹u¡y/òLôÒ¥FõØ©ï-Šæ¯s1NÛ%FUy^Ók8r¤º!ÔXår:EÕÉP…ׯ旡¦ÇÒ¤VæƦ՚EÀ² Aà€Ás.J—óžQõ¤ÕÒæPÝ97V]…ʵÆäRÑçÜà’p5JWŸ§ÐœU0¸úZKJVE1ˆ5h¦…ÎFNªUJÀV‘ŽÄs ìK@Ç PepsiCo’s solution is powered by Atlanta-based automation supplier Dematic, which was chosen for its broad experience and ability to meet PepsiCo’s world-class standards. Currently a 50 percent rise in Pepsi prices in Saudi has angered customers and provoked the kingdom’s government to call on more than 30 soft drink companies to hold off on further price hikes. Both caused a 0.4 percent loss in PepsiCo’s revenue within one year. Her main strategic goal is to transform the company “from a purveyor of sugar-laden bubbly beverages and salty snacks, into one that has healthier and more wholesome offerings” (Wharton, 2012, p. 1). The economic impact of foreign exchange rates movements on them is complex because such changes are often linked to variability in real growth, inflation, interest rates, governmental actions, etc. At PepsiCo, we have been working with our Foundation to offer immediate community relief where we can. Pepsi also produces drinks and snacks such as Gatorade, Tropicana, Aquafina, and Frito. PepsiCo owns and markets some of the most recognizable global brands, including Pepsi, Tropicana, Gatorade, Mountain Dew, Aquafina, Lay’s, Doritos, Cheetos and many other popular brands. During the company's Q2 earnings call, Pepsico CEO Indra K. Nooyi, who is stepping down from the CEO role on Oct. 3, noted the slowdown in NAB … The ownership in fast food restaurants has always been problematic for pepsi. PepsiCo’s brands are enjoyed by consumers more than a billion times a day—they’re powerful drivers of … STRATEGIC MANAGEMENT FINAL PAPER PEPSICO CASE STUDY ANALYSIS LECTURER Their strategic plan must be one which keeps costs down and helps drive sales. STRATEGIC IMPLEMENTATION AND CONTROL 3 PepsiCo is among the large operators in the market facing a high level of competition from other giants like Coca Cola. PepsiCo Strategic Analysis Contents Contents 2 Introduction 4 Company Background 5 Market Overview 5 PepsiCo’s Stakeholders 6 External Environmental Analysis: PEST Analysis 6 Political Factors 6 Economical Factors 7 Social Factors 7 Technological Factors 7 Internal Environmental Audit: SWOT Analysis 8 Strengths 8 Weaknesses 8 Opportunities 9 Threats 9 Porter’s Five Forces Analysis … PepsiCo has an integrated approach to the 10 strategic decisions of operations management (OM). (Page 47 … Background ?Established in 1965 PepsiCo created in 1965 through the merger of Pepsi-Cola and Frito-Lay ? And that, mostly, is manageable. Overdependence on large supermarkets in general and Wal-Mart in particular is PepsiCo’s considerable weakness. 2. It becomes trickier when so many of their products are bought overseas. Pepsi can serve the 90% market but problem is the bottling of the drink. Health and stomach diseases due to over use. PepsiCo needs to manage its relationships carefully with the bottling units in order to make changes in its way to market the local retailers. A company as big as Pepsico needs no major introduction. To read the essay’s introduction, body and conclusion, scroll down. If you need assistance with writing your essay, our professional essay writing service is here to help! Pepsi is being forced to re-examine their strategic models, based on carbonated soft drinks and move to new beverage categories. This is because there are already four players in the market other then Pepsi itself. Thus, PepsiCo’s policies and approaches effectively address the main issues and concerns linked to the 10 strategic decisions of operations management. Broadening Its Diverse Portfolio of Global Products. PepsiCo has not only an opportunity, ... We’re going to make supporting the communities and issues that matter most to both our consumers and our planet a priority for our brands. However, half of its revenues come through its food division with brands such as Doritos, Quaker, and Frito-LAY. In 2008 PepsiCo announces plans to invest US $1 billion in China over the next four years as part of the strategy to expand in emerging markets and broaden the portfolio of locally relevant products. PepsiCo is also subjected to other economical factors like money supply, energy availability, cost and business cycles. Free resources to assist you with your university studies! PepsiCo, the Purchase, New York–based company known for beverages and its Frito-Lay snack business, has generally struggled in recent years as … Possible substitutes that continuously put pressure on Pepsi include tea, coffee, juices, milk, and hot chocolate. In current times where the consumers are being more aware of the ethical, social and health issues, such controversies may deeply dent the confidence of its consumers and shareholders in the company. Moreover consumers can simply switch to other beverages with little cost or importance. Segmentation is the important strategy which helps the brand in targeting the specific group of customers with differentiated offerings.Pepsi is the mass market product which uses undifferentiated targeting strategies in order to be competitive and increase its sales.In the non-alcoholic beverag… Pepsico Marketing Case. PepsiCo's Incoming CEO Faces Key Issues PepsiCo's new CEO will have to figure out how to spark the beverage business and whether or not to ... "We also see greater strategic … MAJOR ISSUES / PROBLEMS ( 2 paragraph, one for each issuse, root & impact) DO NOT GO OUTSIDE THE CASE STUDY – identify at least 2 strategic problems and/or issues facing the company (– explain the ROOT cause(s) and impact of each . PepsiCo has employed a performance with purpose approach which is very … Global strategies of Pepsi. Coca-Cola vs. Pepsi's Business Models: An Overview . There are 5 strategic issues and problems must be addressed by PepsiCo’s management: Revitalizing Its North American Beverage Business. m°ÖJýš4L9¼˜G:ÛОj\æuE€ïΖcN+8©‚6ñ=+2CM¤c®GY]ËØÿb«ŸdaŠARq÷¼A!9©÷YŸOô§O#gàcg!Íf2K‘nf± Œîú‘çhQáò¬Œ¤ÔE.€<9›€Kæ9ÖKu~æÕWьÄfÜ¹ªðü±ÕÖë*2ú`Ñ£â44d…o©>«òcPÇ}ûPˆ|ºäÌâb\jR˳Éàb{>+àj¼YL’Œ¤ÆnjšW;@«M öãàx½¾nlTâRˆ³e#‹|HÑîiM Consumers want to buy soft drinks delivered at convenient locations with the right package. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. Threat of New Entrants: The threat of new entrants in the industry is small yet substantial. Saudi Consumer Protection Association investigated the sudden “unjustified” price hike, the Saudi Gazette reported that official permission should be granted to soft drink firms before they are allowed to increase prices and price rise should not be more than 10 percent. Due to recent oil prices increase, there is international factor of inflation and on the other hand Pepsi is cheaper in KSA compared to other countries, so Pepsi is facing problem to maintain the profits. PepsiCo, since established in 1898 has grown into a vast well established organization with a diversified portfolio. Our ambition is to use our scale, reach, and expertise to help build a more sustainable food system, and the SDGs provide a vital framework for progress and partnership on a global scale. This is not an example of the work produced by our Essay Writing Service. That includes donating more than $60 million to support people impacted by COVID-19, providing 50 million meals, protective gear for healthcare workers, and other vital resources. Because of this, Pepsi expanded into Arab Countries & has an 80% share of the $1 billion Saudi soft-drink market. No plagiarism, guaranteed! PepsiCo brands are available in nearly 200 countries and territories. It has to pay attention while adopting flexible & advanced distribution techniques. No, they fear the strength of the dollar and consumer opinion. The bargaining power of the suppliers tends to be low according to the recent analysis. These days, people are more likely to reach for something sweet but lower calorie than a soda. The organisation has been able to lower its operating cost as a result of which, the financial performance of PepsiCo has been improved. Pepsi should use all media vehicles to attract consumers. 1223 words (5 pages) Essay. Third, focusing on emerging markets. PepsiCo, a well-greased corporation worth $18.2 Billion, is no stranger to stretching the truth, healthwashing its junk food, and greenwashing its environmental destruction. War crisis between Palestine and Israel is bringing hate against Pepsi that why USA is not interest in resolving the issue. Owing to the fact that the industry faces strong contention from a number of soft drinks producers throughout the world, the industry giants like Coca-Cola Company and PepsiCo constantly needs to come up with innovative ideas and strategic approaches in order to remain the most significant choice of the large-scale consumers. Pepsi spends 15% of overall budget on advertising and marketing to be no.1 in the consumer sight. PepsiCo's biggest lever in this endeavor is to increase the revenue of its largest profit driver, Frito Lay North America, or FLNA. The Issues Of PepsiCo International Strategy. The environment in Saudi Arabia makes the country very favorable to soft-drink sales because alcohol is banned & climate is very hot and dry. PepsiCo is exposed to new manufacturing techniques, for its three business units, snack food, juices and soft drinks. Maintaining Its Commitment To Sustainable Growth. Inflation, economic stability, and taxes affect PepsiCo. PEPSICO’S STRATEGIC SITUATION IN 2014 For the most part, PepsiCo’s strategies seemed to be firing on all cylinders in 2014. Pepsi promotes itself as the number one choice of the “Next Generation”. Pepsico, Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. Company Registration No: 4964706. PepsiCo is a world leader in convenient foods and beverages, with revenues of about $27 billion and over 143,000 employees. Free Essays on Strategic Issues Pepsico . Pepsi has a competitive advantage over Coke because of its brand image & good word of mouth. Table 1: Financial Performance of the PepsiCo. It has the internal issue that PepsiCo has not been able to consistently meet its growth goal of 15+ percent annual increase in earnings for the last 10 years. Either they’re high in calories, sugar, or both. PepsiCo has existed for many years now and is a well established company that is listed in the top 50 all around the UK and in the top 5 in the beverage industry which means that the strategic management works properly.This report noted the importance of the strategic management in every company, in this case PepsiCo and generally the whole corporate world. PepsiCo’s values are the reflection of their stand on social and environmental issues, and what the company wants to be known for. Pepsico’s net revenue in the year 2014 was USD […] Pepsi has won the International Quality Award and Bottlers of the year Award, so the company feels quite optimistic. There are 5 strategic issues and problems must be addressed by PepsiCo’s management: Revitalizing Its North American Beverage Business. Both caused a 0.4 percent loss in PepsiCo’s revenue within one year. Heavy investmentment in risky innovations may be suggested in order to transfer resources from other brands. PepsiCo's current performance. It uses mass marketing strategy to target the groups of the customers of different demographics and geographic regions. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc. PepsiCo has since expanded from its namesake product Pepsi to a broader range of food and beverage brands, the largest of which included an acquisition of Tropicana Products in 1998 and the Quaker Oats Company in 2001, which added the Gatorade brand to its portfolio. An aggressive pursuit of this strategy has had positive impact on the bottom line. The food and beverage industry experiences a variety of threats. The folllowing sample essay on Pepsico Case Study Strategic Management discusses it in detail, offering basic facts and pros and cons associated with it. Segmentation, targeting, positioning in the Marketing strategy of Pepsi – It uses mass marketing strategy to target the groups of the customers of different demographics and geographic regions. We're here to answer any questions you have about our services. But PepsiCo felt the first signs of trouble between 2015 and 2016. You can view samples of our professional work here. Saudi Arabia is the third largest foreign market of Pepsi, after Mexico and Canada. Source: Self-generated from Yahoo finance (2013). And that, mostly, is manageable. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Pepsico… This is not an example of the work produced by our Essay Writing Service. Expanding in International … Moreover, the report contains analyses of PepsiCo’s marketing strategy and discusses the issues of corporate social responsibility. Despite of having few strategic drift issues which cannot be ignored, PepsiCo continues to maintain their competitive advantage in the changing markets and is in a strategic fit. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on PepsiCo. PepsiCo is proud to be a Business Avenger for the UN Sustainable Development Goals. PepsiCo Case Study Analysis Paper Michael Gillespie Organizational Policy and Strategy, OML-450, Cohort (835) Professor Vicky Sons-Eiden September 15, 2011 PepsiCo Case Study Analysis Paper A case study analysis on PepsiCo’s diversion strategy in 2008 will be addressed in this paper. The production of conflict palm oil causes rainforest and peatland destruction, species extinction, greenhouse gas emissions, and human rights abuses. The statement that sheds light on the values of the company is as follows “PepsiCo is committed to delivering sustained growth through empowered people acting responsibly and building trust.” Key issues include discriminatory taxation, trade, commodities, restrictions in the marketplace and environmental regulation. The influence of the Coca-Cola Company is especially significant against PepsiCo. PepsiCo announced November 5 a strategic realignment of its organizational structure to position the company for continued strong growth and more fully leverage the talents of its senior leaders. íٍ¸ð@ëœû¡mŽÄ8 v9 y6[úÎ~5!þ­]b¤þ¥ßâе¬c£¢Aml[–ïr݈«ãI.äPU•¡ZÄÌàA`L°Áu‚\ý¢ÉÊÔßRãØ$”Ù±§¹ÎçnîH ΙTÓ]ûJ؄- L¯Q nDjMŒ ÷?} Indra Nooyi has been PepsiCo’s CEO since 2006 (PepsiCo, 2012c). Both Coca-Cola and PepsiCo are so large, they face the issue of market saturation. The ability of the product to survive several bankruptcies, numerous management changes, and major internal squabbles made it an even stronger player in the bid for consumer taste acceptance. Background ?Established in 1965 PepsiCo created in 1965 through the merger of Pepsi-Cola and Frito-Lay ? Pepsi increased the price of a can to 1.50 riyals $0.40 from 1 riyal.it. Has always been problematic for pepsi you can view samples of our professional work...., cost and business cycles buying power of consumers also poses a key threat the... 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