Pepsico Strategic Management Case

PepsiCo Strategic Management Case

1) Strengths :

-          Ranked 21st in the Fortune 500

-          International sales of $29.3 billion

-          Markets more than 500 varieties of food and beverages

-          Distributed in more than 200 countries

-          Third largest food and beverage company in the world

-          16 brands produce more than $1 billion annually

-          Loft Company purchased Pepsi Cola in 1931.

-          Launched first radio jingle in 1939

-          Well diversified

-          Dedicated to growth

-          Frito Lay is the world’s largest seller of snack foods

-          Beverages count for 1/3 of carbonated beverages sales in U.S.

-          Joint ventures with Lipton and Starbucks

-          Concentrates on emerging markets rather than going after markets already held by Coca Cola

Weaknesses:

-          No vision statement

-          Bad press associated with Wow! Potato chips and Olestra

-          Poor choices in acquisitions in the past such as North American Van Lines and Wilson Sporting Goods, both of which were sold off in 1985.

-          Hasn’t been able to consistently achieve 15 or more percent annual increase in earnings since 1996.

2) Opportunities:

-          Production of energy drinks to compete with Red Bull or Rockstar

-          Creating more diet beverages to accommodate market growth in diet soda category.

-          Create or acquire an alcoholic beverage division. None of the top three soft drink makers make alcoholic beverages.

-          Creation of more health foods in Frito Lay division

-          Use completely recycled materials in packaging and take steps to reduce the carbon footprint the company makes.

Threats:

-          Coca Cola is the number one company in the soft drink market, competition from this brand is the largest threat.

-          Healthy alternatives to sodas as competition; bottled water, teas, and sports drinks.

-          Sugar and other raw materials...