The SWOT Examination: Pepsi

PEPSI can be an international player in the soda market and procedure around the world. In 1893, PepsiCo started its making in 1893. It acquired a new name as Pepsi-Cola on August 28, 1898. Then in 1961, it was finally known as as Pepsi. First it was sold as "Brad's Drink". The substitutes available in the same market are the following

1) Coca-Cola

2) Cola Turka

3) Big Cola

4) RC-Cola

In every portion of the prospective market, Pepsi is highly advantageous. Due to its wise get spread around use at homes, ceremonies and during moves, it's been chosen for this project.

Problem Statement

In nowadays, management at the business has observed a substantial wait in the sales with their product, Pepsi in this case. The demand for the particular has also declined as time passes. These business professionals have proposed different facets affecting this issue. For example

1) A comparatively good flavor of Competitor Products

2) Improvedvalue of Competitor's Products

3) GOOD DEAL Rival Product

4) BetterPremeditatedDevelopment of Rival Companies

Consequently Company Managers have comprehended the need of RE-FINANCING STRATEGIC MANAGEMENT PLAN.

It evaluated the company processes on the followings fators



5 Cs (company/collaborators/customers/climate/competitors)

4/7 Ps-product, price, place, promotion, people, process, physical Environment.

Market Analysis

In the wintry drink market, a few of the players were




Suppliers and Competitors

With the entrance of other players in to the market, there can have risks or benefits. Regarding Pepsi, this was of a significant value. We will research these factors as access to barriers on the SWOT basis.

SWOT Evaluation:PEPSI



The premier make of PepsiCo is Pepsi. In 2008, it acquired ranked at the 26th position out of 100 top brands of the world.

The value of total annual sales is $15000 million

Other brands of the company include Diet Pepsi, Gatorade Pile Dew and also have the presence in over 200 countries.

In the united states beverage industry, they have a market talk about of 39% and 26% in the Appetizers Industry.

A large proportion of the sales is accumulated through these brands.


The diversification includes the aspect that each top 18 brands of PepsiCo creates about $1000 million of twelve-monthly sales.


The wider circulation network of Pepsi works in a way that the manufactured product is delivered to warehouses, then to customers ware properties and then to merchants.


Overdependence on Wal-Mart

PepsiCo's most significant customer is Wal-Mart. Wal-Mart functions through low price themes or templates which indirectly put stresses on Pepsi to lower down its prices relative to its biggest customers.

Overdependence on USMarkets

The US market creates around-+ 52% of Pepsi's total profits.

Low Productivity

Low production is obvious from the actual fact that in 2008, the earnings that it generated was $219, 439 per worker. It was significantly less than its rivals on the market.


Expansion of Product Base

PepsiCo is chasing to handle one of its major weakness: enslavement on US marketplaces by getting Russia's topJuice Company, Lebedyansky, and vwwater in the UK. In this way, it might be able to increase its product platform in a more competitive market.

International Expansion

Currently PepsiCo is extending by causing investment in China ($1000 million) and India ($500 million). This highlights towards the fact that it is seeking to increase its international base and lower its dependency on the US market. The near future plans include expansions in Brazil and Mexico through huge opportunities.

Growing Savory Snack and Bottled Water Market in US

There is an enormous prospect of PEPSICO to capitalize on the extending bottle normal water market which is expected to have a $24 billion amount by 2012.


Sharp Reduction in the Sales of Carbonated Drinks

The sales of carbonated drinks have lowered significantly. Though PepsiCois experiencing diversification but it projected that it might be facing the impact of the decrease.

Possible Negative Impact of Administration Regulation

PepsiCo can be adversely affected as the state of hawaii and central regulations would prevent its operations in marketing, sales and processing.

Powerful Competition

The one major competition of PepsiCo on the market is Coca-Cola. Nestle and Marina is also counted as its competitors. The intensive, edge to edge competition on the market can affect charges plans, marketing, sales and other advertising strategies submit by the company. For instant the sales of drink has significantly increased for Coca-Cola when compared with Pepsi.

Potential Commotion Because of Labor Unrest

Pepsi Co is vunerable to hits and other labor disputes. For example, a strike in India in 2008 got prevented the processing for almost per month. These can exacerbate problems for the company.

PEST Evaluation: PEPSI

A particular business would depend on a host to get its income for the products and services that it provides. These conditions can both be internal or external.

Political Environment: Pepsi

To run a successful business, PepsiCo would depend on the public policy as it is one of the greatest multi country companies on earth. Thus a dynamic participation is essential for the business towards the deliberations of public policy.

Political Engagement Policy

Citizens Fund (CCF) is the particular entity of PepsiCo that gets voluntary worker assistances to make political campaign contributions to Federal and state politics parties, PACs and electoral individuals.

These actively help the business to take part in the democratic process in the united states.

Economic Environment: Pepsi

The Key responsibility of the company, PepsiCo, is for taking the necessary options to protect the sustainability of the environment where it works for occasion ecological environment, social and economic.

Pepsi Co is aware of the critical role that agriculture performs towards different aspects of the business operations.

Pepsi Co also recognizes the dangers growing from the shortage in food resource and the individual food security dangers.

Social Environment: Pepsi

The unique cultural environment at Pepsi Co is very attractive where its people will work collectively for a sustainable present of wealth. This, in turn, would be good for Pepsi itself.

Its promise is to provide the localize types of its products by keeping in mind the tastes of the neighborhood communities where the business is operating.

Technological Environment: Pepsi

Technological improvements have helped PepsiCo to enhance its creation capacity. Therefore it is making full use of the new technology. PepsiCo gets an integral help through improvements in IT.

Situation Evaluation: Pepsi

It is very necessary for an organization to satisfy the needs of its customers while preserving the success through sales. This can be achieved if company keeps track of all the internal and external factors in that environment.

5C's provide the Situation Examination for a specific firm operating in a specific market.

These are as follows


Product line

Image in the market

Technology and Experience








Market size and growth

Market Segments

Retail channel-where will the buyer actually choose the product?

Consumer Information Sources-where will the client obtain information about the merchandise?

Rate of Purchase, seasonal factors

Quantity purchased at a time

Trends-how consumer needs and preferences change over time


Real or Potential

Direct or Indirect



Market Shares

Strengths and Weaknesses of competitors

Climate or Context

The environment or macro-environmental factors are

Political and Regulatory Environment: Which specific procedures have an effect on the company

Economic Environment: business circuit, inflation rate, interest rates, and other topics

Social/Cultural Environment: Styles and fashions in a particular society

Technological Environment: The relationship between demand and the impact of technology

7 P's -Product, Price, Place, Promotion, People, Process, Physical Environment: Pepsi

7 P's are called Marketing Combine and help in meeting marketing aims for a business.


The cola drink includes the ingredients such as carbonated water, high fructose corn syrup, glucose, colorings, phosphoric acid, levels of caffeine, citric Acid and natural flavors.

Following will be the popular makes of PepsiCo

Pepsi Twist, Pepsi Tarik, Pepsi Samba, Mountain Dew, etc.

Coke v/s Pepsi-Product

Pepsi and Coke will be the major rivals on the market and compete keenly against a verity of products on the market



1) The dark colored Cola drink initiated the rivalry with Pepsi's carbonated drink

1) Pepsi too has a cola version of carbonated drink which competes resistant to the coke

2) Vaultwas released by the Coca-Cola company in June 2005. It really is a carbonated drink.

2) Hill Dew MDXis the version released under Pile Dew in 2005 after a fresh marketing campaign

3) Spriteis a specific lemon- time flavored soft drink created by the coca-cola company.

3) 7 UP is a lemon carbonated drink fighting with Sprite

4) Diet Coca-Colais a sugars free soft drink produced and written by the Coca-Cola Company

4) Diet Pepsiis a low-calorie carbonated cola.

5) Fantais a soft drink citrus brand possessed by Coca-Cola Company.

5)Mirindais soft drink brand had by PepsiCo and it competes with Fanta

Table : Coke v/s PEPSI


Price is the monetary value of a good in a particular currency. Pricing is the major part of the marketing mixture. Before the entry of PepsiCo on the market, Coke was the only player in the market nd it directed the price of the cola drink. Your competition emerged after the entry of Pepsi. Now the purchase price is determined on the basis of competition between Coke and Pepsi. Pepsi portrays a versatile attitude and chop downs its prices at times. It has also incurred some loses for Pepsi due to the risks attached. Although lowered prices would attract more customers, it also terribly affects the creation cost which becomes difficult to cover. This was an early stage situation for Pepsi but now it has retrieved due to the rapid growth that it is making.


In marketing, is a geographic location, an industry, a group of men and women to who company wishes to market its products. Pepsi like Coke has its network all around the globe. Pepsi has joined makes with companies like Quaker Oats, Lipton etc. It runs ads in different localities of the world.


Promotion encompasses 4-subcategories


Personal selling

Sales Promotion

Publicity and Community Relations

A promotional strategy range from

a) Sales Shootouts

b) New product reception

c) Brand Collateral Emergence

d) Positioning

e) Competitive retaliations

f) Creation of the corporate image

Pepsi and Coke have a particular position regarding their promotional activities. The rivalry was initiated when Pepsi started out its blind flavour challenges. It took the method of your style test at public places like shopping malls, community centric hubs etc. By allowing people taste both colas, they asked the visitors to choose the preferred one so that people would buy Pepsi.

The following graph provides a contrast between Pepsi and Coke

Figure : Price Comparison

People- Pepsi

Pepsi has deeply afflicted the lives of individuals by changing their tastes.


Process will involve the change of inputs into outputs. Along with the latest technology, pepsi has helped people to get a much better carbonated product.

Physical Environment-Pepsi

The interior and external environment has been afflicted by the functions of Pepsi and it keeps a well-established position for your.


It is this strategy of framing, executing and gauging decisions that allow a business to meet its objectives.

The making and making of a strategy includes the next

Vision and Mission(the target of the business enterprise)

Strength and Weakness

Opportunities and threats

The contemplations for top level strategy devising are

Allocation of resources

Business to enter or retain

Business to divest or liquidate

Joint endeavors or mergers

Whether to expand or not

Moving into international markets

Trying to avoid take over

HRM and Strategy

Strategists: are those who are most responsible for the success or inability of a business. They are people who form strategies. They may have various job titles, such as CEO, Chief executive, owner etc.

Pepsi- Eye-sight Statement

"PepsiCo's responsibility is to continuously improve all aspects of the world in which we operate- environment, cultural, economic-creating a better tomorrow than today"

Pepsi Cola Quest Statement

"Our objective" is to increase the value of our own shareholders' investment. We do that through sales development, cost settings, and wise investment resources. We believe that our commercial success relies after offering quality and value to our consumers and customers. Providing products that are safe, wholesome, economically reliable and environmentally reasonable, and providing a fair return to our shareholders while sticking with the highest requirements of integrity. "

Types of Strategy

Competitive Gain: Pepsi

By taking our competitive talents, and buying those to create longer-term value to support expansion. PepsiCo has 3 key advantages

big, muscular brands

the proven potential to innovate and create differentiated products, and

Powerful go-to-market systems.

Cost Advantage

It is the global innovator in savory snacks, and those snack foods can be paired with its drinks in the marketplace. Those pairings will allow PepsiCo to provide unique offerings to retail and foodservice customers.

Market Dominance

It is one of the world's most familiar consumer food and drink companies, offering brands like Frito-Lay, Gatorade, Tropicana and Quaker. The Coke vs. Pepsi turmoil raged on for many years across the country on supermarket cabinets, fast food restaurants and so on.

New Product Development

Pepsi "As being a consumer-focused company, we want to enrich the lifestyles of your consumers while increasing the neighborhood relevance of the merchandise we make. We acknowledge the need to understand and respect local civilizations, rituals, patterns and intake gaps when expanding delicious-tasting convenient and affordable products for consumers in that market. For instance, in India, we have unveiled a whole-grain product for breaking the fast about the observance of Ramadan. In China, we've introduced congee (with whole grains and reduced sodium) as a locally relevant breakfast offering to include vitamins and minerals to the Chinese language diet, and we're adding products made from grains in sub-Saharan Africa as a differ from those made out of basic flour".


IndraNooyi, PepsiCo Chairman and CEO, said, "Our results this one fourth reinforce the features of our balanced stock portfolio, as our food and international businesses provided sound performance while we persisted the transformation of our own North American drink business. "

As part of its strategy to increase in key marketplaces, the company just lately announced plans to invest $1 billion over another four years in China, PepsiCo's highest concern expansion market. And, in Russia, PepsiCo along using its spouse The Pepsi Bottling Group, Inc. released a plan to invest $1 billion over another 3 years.

Price Control Strategy

An observation manufactured from oligopolistic business behavior where one company, usually the dominating competition among several, leads the way in deciding prices, others soon following. The context is circumstances of limited competition, in which a market is distributed by a little number of makers or sellers.

Pepsi- Global Strategy

It is not only another drink on the huge shelf of choices. Pepsi determined years back to diversify its offering and branch into the global arena. Pepsi can be an American multinational corporation headquartered in Purchase, NY. It is a processing company distributing beverages and snacks across 200 countries.

Pepsi-Reengineering Strategy

Reengineering initiatives typically lead to a business corporation with these characteristics

1. Business functions are simplified somewhat than being made more complex.

2. Job information expand and be multi-dimensional -- people execute a broader selection of tasks.


PepsiCo Inc. is considering chopping approximately 4, 000 employees and lowering pension contributions to be able to increase their income. Citing a source, reported the New York Post, quoted by Reuters on Fri (06. 01. 2012), currently the company offers old age plans and corresponding efforts to 401 thousand pension savings account. One of these large companies believes that by offering both of these are an function that is more generous. Pepsi-party claims when 401 thousand by eliminating the retirement savings account that will save the company up to USD75 million. The layoffs, accounting for about one percent more than the payroll company, will include a small range of employees at its head office.


To lessen the size of an enterprise hierarchy, especially in terms of a decrease in management. This creates a flatter(less split) organizational structure.

There have been numerous instances of companies delayering their firm structures within the last few years. Many of these companies include industry leaders rarely satisfied with their earlier success, continually searching to boost all areas of their business, including their management composition. Recent examples of well-known companies that have delayered include Pepsi-Cola, Hewlett-Packard, Corning, Tenneco, and General Electric, to name just a few.


PepsiCo Inc. ideas to lower 8, 700 jobs in a restructuring as it looks for to offset high commodity costs and boosts investment in marketing and advertising in North America. It's less figure than options had expected. Of PepsiCo's 100, 000 U. S. staff, about 2, 000, or 2 percent, are on the chopping block, say knowledgeable options, a body Mr. Nicolas couldn't immediately verify. Some 1, 800 people just work at the Western Loop headquarters of Quaker Oats, Gatorade and Tropicana. Other PepsiCo groups plus its global nourishment group are also in Chicago. Mr. Nicolas declined to touch upon specific careers or people prior to the company notifies workers of their position this week.

The Financial Analysis

Pepsi Bottling Group is the world's greatest manufacturer, retailer and distributor of Pepsi-Cola drinks. With gross annual sales of practically $11 billion, the company's fastest growing segment is non-carbonated drinks, including the number one brand of water in bottles in the U. S. , Aquafina, as well as Tropicana drink beverages and Lipton Snow Tea. Within a 24/7 development operation, the business's Detroit plant boats about 27 million instances per 12 months.

Production at the place begins as vacant bottles are unloaded from vehicles via conveyor and transported to a depalletizer. After that, they are, rinsed, dried out and delivered to a filling machine (filler rates of speed at the vegetable vary based on bottle size, ranging from 350 to 1 1, 000 containers per minute). The containers leave the fillers and make their way to a packaging machine, and then to a palletizer. Each pallet is covered for distribution and moved to the warehouse for shipping.

We can show the declaration of budget of PEPSI Inventory (raw materials) in various years in the following chart.

Figure : Financial Position of PEPSI Inventory (recycleables)

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