PepsiCo sells their products in more than 200 countries and territories around the world. Their mission statement is, “As one of the largest food and beverage companies in the world, our mission is to provide consumers around the world with delicious, affordable, convenient and complementary foods and beverages from wholesome breakfasts to healthy and fun daytime snacks and beverages to evening treats. We are committed to investing in our people, our company and the communities where we operate to help position the company for long-term, sustainable growth.” (PepsiCo, 2018). I have analyzed the company on many levels, but I started with a SWOT analysis which stands for strengths, weaknesses, opportunities, and threats. I began with the strengths and moved my way through the analysis.
The Strengths of PepsiCo are its brand equity, strong leadership by CEO Ramon Laguarta, great customer loyalty, strong distribution, and strong supply chain. (Bhasin, 2018). The strength of brand equity is very important because that means it’s seen as a valuable and reputable brand to many consumers. It’s also a great strength in a company to have strong leadership and Ramon provides this for PepsiCo. He has been within the company for 22 years, but just very recently became a CEO as of October 3, 2018. (PepsiCo, 2018). Having a new CEO usually is taken as a weakness, but I saw it as a strength to have new ideas and the prior CEO is a chairman and can help create a smooth transition for Ramon. Customer loyalty is a large part of why PepsiCo is so successful because without loyal customers, they would have a lot of customers moving to products made by Coca-Cola. The customers are loyal to PepsiCo because they always get the same great tasteful products and their customer service is easy to access and helpful. The strong distribution and supply chain together create an environment for people to want their products because the consumer knows they will get what they need when they need it. There are many strengths, but there are also weaknesses which I will go over.
The weaknesses are the heavy competition from Coca-Cola, failed products, and professional people who are sponsored by PepsiCo, and accidentally hurt the brand image in some way. The competition from Coca-Cola can make people who aren’t loyal to PepsiCo products to go with Coca-Cola products instead. (Bhasin, 2018). Failed products can hurt PepsiCo’s brand name because consumers try that product and relate their distaste with the brand name. An example of a failed product is Crystal Pepsi, it was released 25 years ago during the super bowl, but failed because PepsiCo didn’t explain why it wasn’t colored. (Murray, 2017). An example of a professional signing with PepsiCo and it going wrong would be in 1989 Madonna signed a deal with Pepsi for a commercial with her song, and a week later her not so “family friendly” version of the song came out and PepsiCo had to pull their commercial because of threats of boycotts. (Trout, 2007). The next part of the analysis is opportunities.
The opportunities PepsiCo have are to engage in corporate social responsibility activities to rid of any negative remarks on the company, and adding more flavors to their products, especially sodas, can widen their market. Some examples of corporate social responsible activities PepsiCo could engage in are decreasing the amount of plastic they use, reduce their carbon footprint, and invest more into recycling efforts. Widening their flavors for products can intrigue new buyers or encourage loyal consumers to purchase something different. They can do this by adding more carbonated drink flavors or sports drink flavors, or more food flavors. Alongside the opportunities there are threats as well.
Threats on PepsiCo are the large competitors, the unhealthy stance many people have about Pepsi products, and the government norms for different countries. The large competitors may take some consumers to buy their products. The stance most people have when they see the word Pepsi is that it’s unhealthy, but PepsiCo is trying to tap into the healthy market so that viewpoint damages their name. The different government norms can make it difficult to sell to them or may even cut off selling completely. These threats are something PepsiCo needs to keep in mind, and the next thing I will touch is their strategy which will help them to work through these threats.
PepsiCo competes from a low cost and differentiation strategy. They compete with top competitors, mostly Coca-Cola, with offering the lowest price, so people will buy Pepsi over Coca-Cola products. They also compete with the differentiation strategy by always trying to expand into new markets, such as, a healthier market like their purchase of Bubly or a new market like their purchase of Quaker Oat Milk. (PepsiCo, 2018). With their two strategies, they draw a specific market in to buy their products.
PepsiCo’s target market is the younger crowd. People can tell this by their advertisements with younger people trying to display their product as the “in thing”. (Bhasin, 2018). PepsiCo also pays famous singers or actors to be in their advertisements which also draws the younger crowd to buy their product because they want to be like the famous individual they saw on television drinking or eating the product. PepsiCo has a defined crowd which is advantageous to their company, but there is one specific competitive advantage that helps them the most.
I think PepsiCo’s competitive advantage is their variety of products. I believe that it will remain as an advantage if they keep expanding into new markets, and pay close attention to which products are working well or not so well. They also must look to their major competitors and keep up with the products they are selling, so they remain as a major competitor and not ahead of PepsiCo. PepsiCo’s major competitor is Coca-Cola. However, they have other companies they compete with and those include, but aren’t limited to, Dr Peppers Snapple Group, Nestle, and Kraft foods. (Bhasin, 2018)
PepsiCo may have a competitive advantage over other companies, but they also have their faults, which in this case are strategic issues. One major strategic issue I found in the news by Scoop Politics is that PepsiCo is behind a plastics pollution pandemic which found that it’s using single use packaging as the main delivery system. Globally this is a large issue because out of all the plastics used globally more than 90% have never been recycled. This is going to affect PepsiCo’s planning because they now must change up their packaging on their products. On PepsiCo’s website, they state, they will “design 100% of their packaging to be recyclable, compostable or biodegradable by 2025” (PepsiCo, 2018).