PepsiCo Inc is a publicly traded company that operates in the beverage industry. Established in the 1890s by Caleb Bradham, who was a pharmacist, the company became publicly traded in 1903. As such, the company was provided with an excellent opportunity to operate within the larger United States of America market, and this set the beginning for the globally recognized company. Currently, PepsiCo operates in more than 200 countries around the world. Some of the company’s main products include Pepsi Max, Pepsi Samba, Mirinda, Pepsi Twist, Crystal Pepsi, Pepsi Jazz, and Pepsi One. However, three brands perform best in the U.S, which includes Diet Pepsi, Mountain Dew, and Pepsi-Cola. Apart from beverages, the company also holds a market share of 56% through production and distribution of salty snacks.

The company’s major competitors include Coca-Cola Company, Monster Beverage Corporation, DPSG, Mondelēz International, Hansen Natural Corporation, Kraft Foods Group, National Beverage Corp, The Kellogg Company, Nestlé S.A., ConAgra Foods., Snyder’s-Lance and other beverage, food and snack companies. The success and growth of the company is due to its increasing market share, brand loyalty, competitive advantage, as well as enhancement of customer confidence and loyalty (Gamble & Thompson, 2013). In addition, the company has a variety of products that are available all over the world a clear indication that it is a success and growth oriented Beverage Company.

Strengths

PepsiCo Inc operates in over 200 countries. This enables the company to access a large base revenue sources. Successful penetration in multiple national markets has provided a much broader customer base from which it generates revenue while minimizing costs and increasing profits. With its globalization, the company has a larger market base and development meaning the company risk is spread across a larger customer base. If issues of supply, regulation or environment arise in one country, the company still operates in the other countries. Globally the company has a larger human resource pool creating access to a larger talent access. Having diverse employees who can interact with different populations and different business partners is also an advantage. This has also given the company an ability to move people around to different locations and roles, and that’s an advantage to the company.

The company has a diversified product portfolio. The company has a wide range of `products in the market ranging from carbonated drinks to snacks. That ensures that the risks in the market are spread along a wide variety of products. The company also has popular subsidiary brands. Through the years, the company has acquired other companies such as Frito-Lays, Tropicana, Quaker Oats Company, Quaker Foods North America and Gatorade. These subsidiaries have been very influential in the growth of the company. PepsiCo Inc has an efficient and strong supply chain (Young, 2015). The company has regional stores where the products are stored and supplied to different areas. This has enabled the company to reach the remote areas where other companies have not managed to reach. Combined with the global advertising done by the company by use of celebrities, the brand awareness in all regions is high.

Another strength the company has is the Pepsi Refresh project which is involved in funding new ventures and idea aimed at benefiting the society. This is part of the corporate social responsibility. Other corporate social responsibility activities include the PepsiCo Foundation. The foundation works in the sectors of health, education, water conservation, and others.

Weaknesses

The major weakness faced by the company is competition, especially in the drinks segment. Coca-Cola is the leading brand in this segment and this force PepsiCo to highly switch brands (Young, 2015). Competing against such a strong brand as Coca-Cola is hard and requires switching brands from now and then which is very risky.

Another weakness is that PepsiCo Inc has a low penetration outside America. Most of the revenue generated by the company comes from the North and South America. This shows that the company has not yet maximized on its potential regarding reaching other markets. Though the company is present in more than 200 countries, the market share in these countries is very low. Additionally, the company concentrates in the food and beverage industry. The company has not diversified its products, and it is vulnerable to risks in the food and beverage market.

In recent years, the consumers are becoming very health conscious. With the high increase in diseases such as obesity, people are very considerate of what they eat and drink. PepsiCo Inc has yet not managed to market its products to the health conscious consumers (Young, 2015). The marketing endeavors are mostly directed to the non-conscious consumers.

Opportunities

PepsiCo Inc has opportunities for growth globally. A major opportunity is product diversification. There are many other industries that the company can venture in. By acquiring complementary firms not in the beverage industry, the company can be able to diversify its business. Another opportunity is that PepsiCo Inc should increase its efforts in the developing countries. The developing countries are an emerging market that the company can tap into. By penetrating into such countries the company will be able to increase its revenues outside America.

The company has an opportunity to form alliances with complementary businesses. This will enable the company to increase its market presence (Young, 2015). Again, just like the company has been able to acquire other brands, the endeavors should be increased and many more brands acquired in different regions. In addition, the company has an opportunity to improve its brand image by getting involved in more corporate social responsibility activities in the communities where it operates.

Threats

PepsiCo Inc operates in the food and beverage industry which is faced with some threats. A major threat to PepsiCo Inc is the aggressive competition in the industry. In this industry, the decision of one company affects the other companies. The influence of the Coca-Cola brand is the major threat to PepsiCo Inc (Young, 2015). Through the years; Coca-Cola has managed to create the best brand in the industry. This is a threat to other players in the industry including PepsiCo Inc.

Most of the PepsiCo Inc products are seen by people as unhealthy because of their salt, sugar, and fat content. The healthy lifestyle adopted by consumers in this century is against the products of PepsiCo Inc. in addition; environmentalism poses a threat to the company. Consumers respond negatively to the waste and lifecycle issue raised about the company.

References

Gamble, J., & Thompson, A., (2013). Essentials of strategic management: The Quest for    Competitive Advantage. New York: McGraw-Hill/Irwin.

Young, J. (2015, December 02). PepsiCo SWOT Analysis & Recommendations – Panmore Institute. Retrieved April 11, 2016, from http://panmore.com/pepsico-swot-analysis-recommendations

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