Strategic Business Management And Planning A Swot Analysis Of Pepsico Business Essay

Strategic craft Management And Planning A Swot Analysis Of Pepsico Business EssayThe greatest rival of Pepsi is Coca Cola. Coca Cola is an international recognized brand. Its brand name is its basic strength. But Pepsi is successfully maintaining its No.1 position in India as with its aggressive marketing planning and quick diversification in creating and developing more ideas and merchandise packaging. Pepsi is operating in India, through 36 bottlers solely over India. These bottlers are Pepsis strength. Pepsi has given franchise to these bottlers. Bottlers distribute, produce and help in promoting the brand. Pepsi to a fault launched its fast food chain KFC i.e. Kentucky Fried Chicken.Pepsi is a very sound organized multinational company, which operates almost all over the globe even in India it has also proved to be the No.1 soft sop up. The purpose of this assignment is adopt the strategies which Pepsi has applied in India market for its product Pepsi Cola. Pepsi Internati onal is a world renowned brand.Also did analysis of the soft drink assiduity in India and worldwide. The worlds confidential cultivation beverage sector are soft drinks. Global usage of soft drinks is rising by 7-9% a year and soft drink consumption change magnitude by almost 500% during last 50 years (Putnam and allshouse 1999).ContentsIndex Page No.IntroductionPepsi operates almost all over the world and it is a very well organized multinational company. Pepsi International is world renowned brand. One of the best carbonated drink producers is Pepsi. It is best in quality, hygienics and serving all over the world. The production of Cola by Pepsi is more than 100 years and it has controlled the world market for over a century now, its breaker point office is situated in New York.About PepsiCo in IndiaPepsiCo arrived in India in 1989 and has become the countrys largest selling food and beverages Company. PepsiCo has created a business which serves the long destination dynami c needs of consumers in India and it is iodine of the largest multinational investors in the country. Soft drinks observe healthy growth in India. The group has developed an expansive beverage and foods business. There are 36 bottling plants in India of which 13 are owned by the company and 12 are owned by the franchisee, to support its operations. In expansion to this, PepsiCos Frito Lay foods division has 3 state-of-the-art plants. PepsiCos vision is to make tomorrow better than today as it business is based on sustainability. Its faithfulness to living by this vision every day is visible in its contribution to the country, consumers and farmers.MissionEvery business starts with mission and vision. A mission logical argument is an approved, short, written statement of the purpose of the company or organization. The mission statement should teach the activity of the organization, give out its boilersuit goal, and guide the sense of instruction and decision making. It arranges the framework or context within which companys strategies are designed. (hughes K 2005)According to the companys official site, PepsiCo Incorporateds mission is to make itthe worlds chair consumer products company, focusing on benefitted foods and beverages. PepsiCo bout to produce healthier financial rewards to investors as it provides chances for growth and enhancement to its employees. So the overall mission of PepsiCo is to expand the value of donationholders investments. This is outleted through growth of sales, cost controls and refreshful investments of resources. PepsiCo believes in providing products that are safe, wholesome, economically efficient and environmentally sound and also believes that their commercial success depends upon offering quality and value to their customers and consumers.VisionPepsiCo is one of the largest companies in the world. It is the worlds largest consumer products companies. PepsiCo initiates in focusing various strategies and believes that they exit drive growth and ensure the companys success. When planning any change in mission and objectives it is important to consider their result of such a change on the companys long term strategies. Whatever PepsiCo is doing, it seems to be doing well. The biggest exposure combined in changing mission and objectives would be a loss of focus and loss of momentum. (PepsiCo Vision and Strategy) bone AnalysisStrength-Weakness-Opportunities-ThreatsA SWOT analysis summarizes the key issues from the business environment and the strategic capability of an organization. SWOT helps the company to look itself for better and for worse. SWOT is a mean by which the company can better understand what it does very well and where its shortcomings are. It helps company sizing up the competitive landscape and gets some insight into the vagaries of market place. SWOT is centered to make an internal analysis effective and accurate so that special(prenominal) strengths and weaknesses of the compan y with the sound strategy can be built.Source www.scribd.com/doc/30755295/swot-analysis-pepsiPorter Five ForcesStrengthsOne of PepsiCos top brands i.e. Pepsi is one of the most acknowledgeable brands of the world, be according to Interbrand. It was ranked 26th amongst top 100 global brands since 2008. The strength of the brands of PepsiCo is distinct in PepsiCos presence in over 200 countries. It has the largest market share at 39% in the US beverage and at 25% in snack food. It is a multinational company which is very salutary and has strong and vast distribution channels. It has a very good relation with Franchise. This company is quality advised and provides good quality products.Technological FactorTechnology is utilise in manufacturing and packaging of the product, transportation of raw material or delivery of product. Technology affects the transportation costs, production costs and unskilled labor. It also plays an important grapheme in packing of product. The market nee d to study several important topics to make the best use of modern information technology and marketing information system as strategic asset. The company has a tag line Ye Hi Hai Right Choice Baby. Technology is shaping populations lives as the most hammy forces. PESTEL Framework relates this factor.PESTEL FrameworkWeaknessBy using weakness analysis we can know about the companys weaknesses and shortcomings so that the profit can be rebuilt. PepsiCo is dependent upon particular carbonated drinks and there is a saturation of carbonated soft drink segment. The company has centralized making factor. One of the strongest weaknesses of this company is that the products it produces target solely the young customers. The Franchises are political. Not all products bear the company name.Overdependence on Wal-MartThe largest customer of PepsiCo is Wal-Mart. whence the business strategy of Wal-Mart influenced the PepsiCos fortunes. PepsiCo is in pressure to hold smoothen its prices becau se of Wal-Marts low price themes. talk terms Power of CustomersThe power of buyers is the force that customers have on a producing diligence. In general, when buyer power is strong the relationship to the producing industry is near to what economist terms- a market in which there are many suppliers and one buyer. Under such market conditions the buyer sets the price. In India the negociate power is low as the products produces the company is accepted by the consumers. There is no participation of consumers in deciding the taste of soft drink. (Porters Five Forces)Bargaining Power of SuppliersFor carbonated soft drink industry there are few suppliers. Every producing industry requires raw materials- components, labor and other supplies. This enhances the buyer-supplier relationship among the industry and the firms that provide it the raw materials used to create products. Also, it is safe to assume that Pepsi and Coke sales account for a large percentage of the suppliers total rev enues. The overall bargaining power of suppliers is resulted to be low. Porters Five Forces model can be applied from the above.Today the people are very trendy sensitive towards the advertisement. Therefore people drink Dew on fashionable and trendy. Considering this PepsiCo targeted refreshing generation people and they are able to variediate between them, few people are conscious about caffeine so they might have negative anticipation about soft drink. Also some people think that in manufacturing wait on soft drink companies spreading the pollution. We can relate this above statement by applying PESTEL analysis as the social factor is affected because of above point.OpportunitiesBy the increasing population in India it increases the opportunities to the company. As more people keep more look ats and also the continuous shifting trend of population also increases the opportunities for the company. For instance, people will exchange to soft drinks from juice and fast foods as t he effect from changing social trends. One of the most potential weaknesses seeking by PepsiCo is settlement on US Markets by acquiring Russias leading Juice Company, Lebedyansky in the United Kingdom. By introducing TrueNorth Nut Snacks and increasing its Lipton Tea venture with Unilever, it continues to expand its product based. These recent initiatives enable PepsiCo to regulate in changing lifestyles of its consumers.The demand of Pepsi is over the competitor. PepsiCo can join with major showrooms restaurants with more opportunities. New products can easily while away in the market and the most benefitted chance for this company is that non-carbonated is fast growing industry in the world. With increasing opportunities the company does internet promotions and ordering processes.ThreatsNew Entrants whatever firm can enter or exit in a market and if free entry or exit exists, then profits evermore could e nominal. As the raw materials, machinery, labors are easily available in the country there are no barriers to entry in the soft drink processing industry. Because of the generations of loyal customers, the retaliation level of the companies in the industry is very low.According to Porters Five Forces model a new entrant to an industry brings new competence a wish to gain market share position and rather new approaches to serving customer. New player means price will be decreased and margin squeezes which results in low profitability in long run. (Michael Porter, competitive strategy 1980 pp7- 33). The challenge to Pepsi is to build further the brand loyalty in their core cola products so that the consumers will not switch to the cheaper, private label imitations products. Pepsi must maintain the good relations with large retailers as the access to distribution channels is currently one of the largest barriers to entry.Rivalries can also affect the threats of the company. From the model of Porters Five Forces rivalry refers to the actions taken by the fi rms in the industry to improve their position and gain advantage over each other. All the companies are charging the same prices against their products in the industry. If Pepsi increases the prices of the soft drink, all the companies follow the same path. In a maturing market such as the domestic carbonated sodas, the only way to gain market share is to steal from ones rivals.Substitutes- Substitute products refer to the products in other industries. A threat of substitutes occurs in the change of prices and the product demand is affected of a substitute product. If the more substitute products become available of Pepsi, the demand becomes stretchier since customers have more alternatives. (Michael E Porter Competitive Strategy 1980 pp7-33)Pepsi has a substitute available in the market so that the cola consumption decreases it increases the consumption of bottled water, juices, teas and energy drinks of Pepsi.ConclusionFrom the above discussion on PepsiCo should increase its marke t share by tie up with different restaurants and clubs as well as continue or go up with already adopted strategies increase its share through huge advertisement and through sponsoring different events such as it continuously sponsoring cricket matches at national and international levels. It is concluded that the strategies bought up by PepsiCo is not making any effect on the sale of Cola, whereas one is cannibalizing others market only. It is also found that Pepsi brand is behind the Coke especially in Muslim dominated area, which makes a major difference in the market.Pepsi should also focus on increasing pricing advantage. This can be done by one of the ways by giving reverse quantity discounts on new packaging. Another strategy can be used y providing bundled products to convenience stores and restaurants. It can be said that although lagging behind in different products or different areas Pepsi has been able to market their products and increase market share and market growth by applying different strategies and approaches.