PepsiCo

History

The drink was first made in 1898 by pharmacist, Caleb Bradham in New Bern, North Carolina. The brand was trademarked on June 16, 1903.

There have been many Pepsi variants produced over the years since 1898.

History

Pepsi was purchased by Loft Candy in 1932

PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay.

Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats

Company, including Gatorade, in 2001.

1966: Doritos was introducedPepsi enters Japan and Eastern Europe. 1970:PepsiCo moved from New York City to new world headquarters in Purchase, N.YPepsi is the first company to respond to consumer preference with lightweight, recyclable, plastic bottles. 

Growth

 1977:PepsiCo acquires Pizza Hut, Inc. 1978:Taco Bell1980:PepsiCo Food Service International (PFSI) is formed to focus on overseas development of restaurants. 

Growth

 1982:Pepsi Free and Diet Pepsi Free, the first major brand caffeine-free colas, were introduced.  1985:PepsiCo is now the largest company in the beverage industry. The company has revenues of more than $7.5 billion, more than 137,000 employees.

Growth

 1986:PepsiCo purchased 7Up International, the third largest franchise soft drink operation outside the United States.1993:Pepsi-Cola introduced Aquafina bottled water into test market. 1996:Pepsi-Cola launched www.pepsiworld.com

Growth

Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.

Mission Statement

PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today.Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.

Vision Statement

At PepsiCo, we’re committed to achieving business and financial success while leaving a positive imprint on society-delivering what we call Performance with Purpose.

Performance with Purpose

How should PepsiCo cope with the rising competition against Coca-Cola?

Changing lifestyle of consumers PepsiCo as a diversified entity Who are the major competitors of PepsiCo? International market vs. US Market net revenue

What are the some of the brands that competitor sell?

Marketing and advertising strategies

AOC:

External Assessment

1. Opening in market for less costly products2. Growth opportunities in developed countries as well as international non-established countries 3. Pepsi recently reacquired ownership of its two largest bottlers, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS)

Opportunities

4. Compete in more than one industry (non-alcoholic beverage industry, the salty or savory snack food industry, and the breakfast food industry)5. Growth in the carbonated drink market is the largest in Asia and Europe6. The world's demand is experiencing a growth with the sports drinks, bottled water, and energy drinks

Opportunities

1. Fierce competition from Coca-Cola, which owns the largest piece of the market share2. The downturn in economy, which lead customers to shift away from bottles of water to tap water.3. Because of the recession, customers are finding cheaper alternatives to the national brands.

Threats

4. Customers are getting more conscious and concerned about their eating habits and general health. 5. Campaign against plastic containers has impacted the sale of bottled beverages 6. Highly dependent on supplies of clean water, to prevent contamination

Threats

Internal Assessment

1. Strong brand equity 2. Well-known worldwide3. Innovating company 4. Ethical, socially responsible, and sustainable company

Strengths

5. Strong advertising company with more than 40 slogans and songs6. PepsiCo as the largest part of the market share after Coca-Cola7. PepsiCo owns a wide variety of smaller brands which able them to offer a large product range from beverages to snacks

Strengths

1.PepsiCo production is really expansive because of the need to constantly develop new products to meet the changing customers demands2. PepsiCo is experiencing a lack of focus towards Pepsi sodas3. PepsiCo is experiencing product recalls

Weaknesses

4. PepsiCo has a low employment productivity and a weak distribution5. PepsiCo depends too much on the US market6. PepsiCo is far behind Coca-Cola in the international market

Weaknesses

SWOT analysis

Strength: Pepsi has a broader product line and outstanding reputation.

Record revenues and increasing market share. Lack of capital constraints (availability of large cash flow).

Great brands, strong distribution, innovative capabilities.

Number of maker of snacks, such as corn chips and potato chips.

PepsiCo sells three products through the same distribution channel.

SWOT analysis

Weakness:Pepsi hard to inspire vision and direction for large global company.

Not all PepsiCo products bears the company name.

PepsiCo is far away from leader Coca-Cola in the international market – demand is highly elastic.

SWOT analysis

Opportunity:Food division should expand internationally.

Noncarbonated drinks are the fastest-growing part of the industry.

There are increasing trend towards healthy foods.

Focus on most important customer trend – “Convenience”

SWOT analysisThreats: F&B industry is mature. Pepsi is blamed for pesticide residues in their products in one of their promising emerging market e.g. in India.

PepsiCo now competes with Coca-Cola and Kraft foods (because of their broader product line) which are well-run and financially sound competitors.

Size of company will demand a varied marketing program; social, cultural, economic, political and governmental constraints.

In the next years, PepsiCo should acquire brands per year in an international marketplaceOne of these brands per year must be healthy

Intensive study on the strategies of its major competitors (Coca-Cola, Kraft)

Recommendations

Increase production and distribution of carbonated drinks in Asian and European countries

PepsiCo will expand into Africa to make use of the international market they are not part of

Recommendations

• Healthy Lifestyle Campaign• New products• New packaging• Partnerships

-schools, offices, etc.

Recommendations

Allocate and spend budget on a healthier, more eco-friendly beverage brand in an already established country

Allocate and spend budget on a healthier more eco-friendly snack brand in an already established country

Acquire a smaller brand in Africa (other countries)

Start its own environmental cause fund

Recommendations

Adopt a cost-efficiency strategy Marketable but less-expensive advertising and innovative promotion.

Improving production efficiencies

Recommendations

Market development is a strategy that PepsiCo should apply by expanding in countries that not already established

Use forward integration to acquire smaller companies in foreign markets to increase their market share

Product development and related diversification should also be considered while trying to produce and distribute healthier products

Fallback

To acquire new brandsTo start an environmental cause group

Focus on developing and promoting fruit/vegetable juice, bottled water, energy drinks

A range of Vitamin-enriched waters under the name ‘Pepsi Fresh’

Fallback

Conclusion

It can be seen then that differences do exist between Coca-Cola and Pepsi Cola.

In a competitive market, both companies must identify and target different market segments in order to remain at the cutting edge.

Differences between the companies are evident with respect to product, pricing, place and promotion.

Conclusion

Coca-cola relies heavily on value: quality is more than something we see or taste. (http://www.coca-cola.com).

Pepsi, on the other hand, relies on its success resulting from superior products and high standards of performance (http://www.pepsico.com).