PepsiCo Case Analysis
Introduction
Company Background
The condition of Pepsi was initialized by Caleb back in 1880 New Bern. In the long run the company remained to be called Pepsi cola in the year 1898. The company picked its condition in 1903 where it made its business unavoidable at all cost. In 1931, the company was identified to bankrupt which intended to merge with other companies like Loft which rebranded itself as Pepsi Cola Company in 1941. In our modern society Pepsi company has further referenced as PepsiCo since it has extended its market globally and made known relationship with other companies.
Study analysis
External analysis: PESTEL
Political and legal forces
PepsiCo has expanded its operation to the global market for instance Europe, Africa, America and the Asian part of the world. For the company to sustain itself in the country it locates itself it must legitimize with the work force within that particular country. It needs to make a not too terrible framework and have a not shocking inside control about its exercises and master’s fundamental powers to be consistence with the law (Basu, 2017). It needs to make a not too terrible framework and have a not shocking inside control about its exercises and master’s fundamental powers to be consistence with the law. In the essence that, it should guide by the market framework of that country.
Social, Demographic, Cultural and Environmental Forces
The extensive structure of a company is the lifestyle of individual from any given country. The product the company intends to engage in the global market should undergo with the culture and beliefs of the society. PepsiCo can only promote it operation in terms of sales if only supports the events that promotes peace and unites individuals in the society such sports. The scenario is able to position PepsiCo company to pass its massage to the targeted market what it companies intends to produce in the long run and how they can access its products.
To achieve this company should target the age group who are the ready market for their products which include snacks and soft drinks. The young generation tends to like readily made products since they are lazy to produce their cooked food and exploit their attitude to maximize the profits at all cost. In addition, the company should focus on the level of education in that particular company it intends to expound it markets. The nature of the environment should also be consider since is a major key to the production of their products. Raw materials ought to be transported from point to another as well as their final goods to the customer. Lastly, the company should engage in the activities that are building the community through its contribution and creation of jobs to the members of the society.
Technology forces
Within the advanced technology the PepsiCo should adopt it to enhance its operation. Despite it being capital intensive food and beverage industry is advised to use modern technology. Technology inspires the company to expound its relation with other known company in order to sustain itself in this stiff market. In the view of many researchers is that PepsiCo is exposed to many danger in its operation in the global market as result it should create partnership to obtain raw materials from other companies which expose it as by-product. The advanced technology provides the company with numerous opportunities to have new market gap for it to strategize its operation within the market structure of that country. The network which is available enables the company to advertise it products to the market without any much cost hence reducing expenses for the company and therefore increasing its production rate.
Competitive force
Within the market structure conducting business is highly hectic to some extent. Similar company tends to introduce stiff competition to increase their sales to the market. From the research we all know that the company is the second largest in the global market in terms of shares. For the company to maintain its rank in the market share index it must ma8ntain its qualities in the process of production and improves on the approach to the customers through subsidizing their products (Srikanth, Donthireddy and Makkena, et al. 2018). In addition, the company should promote their products through giving out tokens and gifts to their esteemed customers around the world.
From the analysis provided the company has numerous chances within the market system it must exploit in order to penetrate its products across the global market. The company also should operate on the fast growing market through initializing the social trends that it is subjected to during its operation. The company should also adhere to health issue regarding its product in order to maintain its standards and retain their potential customers.
Internal analysis: SWOT
Strengths
The company has a strong brand which is the largest in the market system as it is recognized by many individual in the global market. We all know that the company has managed to set up its outlets production site in almost every country in the world. The brand makes it easier for the company to be in a position to market its products since not only it provides one brand of Coca-Cola but numerous soft drinks to fit the taste and preference of the customers. The brand has identified lots of success to the company and it has made it easier for the company to sell since it is highly acceptable within the market structure (Hlatshwayo, Munapo and Mavetera, et al. 2017). In the introduction of new products to the market by the company it has to attach it to the already existing brand to enable it reach out the customer in the market.
PepsiCo Company has the largest distribution channel for its products. The network to distribute its products to the market it has given an added advantage for the company to maintain its standards in the system of marketing. The company has managed to do its operation through the creation numerous distribution channels. Also it has managed to run numerous bottling units which make its operation easier at the lowest cost. The scenario has enabled the company to produce the goods for the nearest customer within the minimum time.
The company has managed to establish a stable connection with retailers and wholesalers linking the company directly to the final consumers. Through the partnership that has been established it has enabled the company to expand its operation to the market in all corners of the world without opposing forces for their activities. The company has shown the potential to conduct the business despite the stiff competition the market subject to them through the companies producing similar products. In addition, it has shown the capability to respond to the market opportunity outdoing the threats it might have subject to in the process of competition. The innovative minds that have been involved in the process of the activities have provided to the company with the best response to the market changes hence increasing its operation.
Weaknesses
Despite the strengths the companies have some of the weaknesses. The company over some time it has shown overdependence to other companies such as Wal-Mart which shows a representation of over 12% net revenue of PepsiCo Company. Wal-Mart is one of the company’s potential customers for its products. Due to overdependence on this customer the strategies that have been put in place within the operation of Wal-Mart has greatly influenced the activities of PepsiCo Company. If the customer tends to lower the prices to the final consumer they will tend to force the producer to lower their prices hence increasing the production cost of the same products to the market.
Due to the image damage to product recall has largely influenced the production rate and the rate at which the company sale its products to the market system. Recent studies have shown that in 2008 the contamination of their products pulled out some of their potential customer lowering their sales and making loses in the long run. Such incidence has damaged the brand of the company and reduced the confidentiality of the customer to the PepsiCo Company.
Threats
The decline of raw material such as carbonated Drink can cost the company since it might be in shortage of its products in the market. In the near future it has been forecasted by the researchers that soft drinks sale will decline by 3% by 2030 which is approximately $70000 million in terms of value. It is therefore advised that the company ought to undergo diversification process despite the chances of it feeling the effect of the sales decline.
The government rules and regulation in different countries might tend to unmanageable sometimes hence affecting the PepsiCo Company negatively. The company should anticipate conducting its operation which is friendly to the environment (Tobin, Brennan and Radhakrishna, et al. 2016). In addition, the stiff competition the company gets from its primary competitors might influence the sale promotion initiatives and pricing of their products within the market structure.
The presence of poor business strategy might influence the future of the PepsiCo Company. It is believed that the strategies of the company are working nicely except when it comes to the international market. As result of different political environment strategies ought to change in order to maintain its life in the marketing system.
Conclusion and Recommendation
The PepsiCo Company is a strong food and beverage industry in the global market worldwide. In the transition of its process within the market system it has maintain in its mission and objectives towards the customers. Not only has it become dominant in the United States of America but also in the world where it is known throughout the world through quality service delivery and the care they show their clients.
The success of the company has been influenced by the views they obtain from the end user of their products and employment of modern technology through innovation (QUINTERO, CHAUDHRY and FENG et al. 2016). The company is further advised that it should not make major strategy since its operation within the forces of the market differs from one country to another. Upon following the following recommendation the company will be able to overcome the challenges and improve upon them to their advantage, this include;
- The company should continue expand its market within the boundaries of human sustainability. Human beings are the major clients to their products and their health matters a lot despite the shortcomings. When the demographic grows the company will continuously grow i9n future and retain much profit at the end.
- The company should emphasize more on achieving the social life of every individual within the market system more so in developing countries through implementing projects which are beneficial to the society. The scenario will increase the recognition of the brand in a very significant process.
- The company should formulate a budget that can conduct market survey for the market segments to enable them increase service delivery to their potential clients for the products at all time. The process will enable the company to maintain the proactive in the health of the products within the marketplace. Since the company ought to improve the responsiveness to the market trends.
In the overall view the company has proved itself to be a successful company in the global market with net revenue which is substantial where its footprint within the market system is extremely large.
Reference
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Hlatshwayo, S., Munapo, E., & Mavetera, N. (2017). Inefficient Communication amongst the
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Srikanth, A., Donthireddy, C., & Makkena, K. D. (2018, October). Improvising Downtrend
Product Using Conjoint Analysis: A Special Analysis on Mirinda of Pepsico. In ICRTEMMS Conference Proceedings (Vol. 546, No. 549, pp. 546-549). Swarna Bharathi lnstitute of Science and Technology.
Tobin, D., Brennan, M., & Radhakrishna, R. (2016). Food access and pro-poor value chains: a
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