Pepsi: Company Overview, Business Strategies, SWOT Analysis - Essay.

Learners will research and analyse an organization of their choice and is designed for you to apply the concepts learned in the course (modules 1-4), and involves the application of:

• Management and organizations.
• Environmental constraints on management.
• Leadership.
• Planning and strategic management.

Learning Outcomes

• Identify key functions and skills required of management within an organization.
• Identify and analyze leadership approaches in a variety of situations.
• Analyze constraints managers encounter within the external environment.
• Identify the steps involved in the strategic planning process.

Company Overview

Management is the practice of getting people together to achieve desired goals and objectives. It is made possible by coordinating and integrating available resources in an efficient way. This report comprises the research on Pepsi. Pepsi is an American food and beverage company. The company has products available in more than 200 countries. The company started expanding its operations from the early 21^st century.

The customers comprise wholesale, distributors, grocery stores, food service customers, drug stores, mass merchandisers, discount stores, membership stores, and authorized dollars. Pepsi grant autonomous bottlers exclusive agreements to sell and produce definite beverage products bearing trademarks. Pepsi targets schools, universities, colleges, hotels, restaurants along with the fast food stores. The company spends a huge amount of money to compete with companies like Coca-Cola. It helps the company in acquiring contracts with the universities to the sold depiction of the product distribution. The customers targeted by Pepsi are mostly teenagers and young adults in the age of 14-29. Pepsi even makes use of several strategies to target customers such as niche marketing, concentrated marketing, micromarketing and more.

Pepsi considers that being an accountable corporate citizen is not enough but also the right to do for the business. The mission of Pepsi is to be the globe’s foremost consumer products company concentrated on the opportune beverages. The company seeks to create financial awards to the investors as they have a role in the growth and enhancement to the business, workers, partners, and communities. Pepsi conducts the business activities for fairness, honesty, and integrity (Aras & Crowther, 2016).

The values reflect the philosophy of Pepsi to be socially and environmentally responsible. It is the foundation for every business decision taken. The core values of the company comprise sustained growth which is fundamental to motivate and measure the success of the company. It believes that today’s action will contribute to the company’s future. The company equally believes in empowering people which means to give freedom to act and think in order to get the job done. The company also follows processes which ensure proper governance. The responsibility and trust are the basis for the growth of the company. The company considers itself responsible for everything done by it.

It is the responsibility of Pepsi to improve all the aspects in the environmental, social and economic way to create a better tomorrow than today. The vision of Pepsi is to focus on environmental stewardship and lead activities which can benefit society. Pepsi makes use of programs to build shareholder value of the company. Pepsi is even dedicated to building strong shareholder value by making itself a truly defensible company. Pepsi believes in serving society and shareholder in a better way by working on the numerous projects. Pepsi is capable of achieving its vision due to the size and finance availability.

Business Strategies

PepsiCo always attempts to come up with the innovative products in order to uphold a competitive advantage. Pepsi makes use of growth strategies and out of growth strategies, intensive growth strategies are used by the company. The intensive growth strategies comprise the following elements:

Market penetration: The primary exhaustive growth strategy implemented by Pepsi is market penetration. This strategy assists the growth of the business through the increased sales like from a bigger market share. For instance, Pepsi makes use of aggressive marketing to appeal to customers. The objective of this strategy is to curtail costs and prices to appeal more customers (Brick, et al. 2017).

Product development: The additional intensive growth strategy is product development. It requires proposing new products to seizure more customers. For instance, Pepsi is involved in developing products or modifications of the existing ones on the regular basis like reduced salt, low calorie or low saturated alternates. The objects associated with this strategy is to boost R&D investments of product innovation.

Market development: The market development is applied by Pepsi as a supporting intensive growth strategy. It assists business growth by discovering new market segments. For instance, Pepsi endures expanding its distribution network to grasp the remaining market segment mainly in the developing nations (Welford, 2016). The strategic objective identified behind this strategy is to expand the supply chain of the company to support the distribution network.

The business strategy is the plan of actions is used by Pepsi to advance a competitive advantage by using the company’s resources and distinctive competitiveness. Pepsi involves itself in the low-cost differentiation strategy and takes advantage of the economies of scale. It is possible through the mass production of the products and by differentiating products. Pepsi is able to differentiate the products through taste and marketing (Bocken, et al. 2016).  The company has added unique attributes in the products which appeal most to the customers when it comes to the beverages. The low-cost differentiation strategy offers comparatively lower prices to stimulate demand and gain market share. In 2009, even when the recession ended, the company announced to produce products at the lower prices and planned to continue offering discounts in its some segments. Pepsi has attained effective business strategy which helps to gain competitive advantage. The effective marketing also helped the company to differentiate from other brands. The originality and creativity of the marketing with the desire to become a strong competitor has made a business strategy of Pepsi successful. Human resource management has also role behind gaining the competitive advantage of the company. The training programmes have geared managers for their contribution to the global operations (Saebi & Foss, 2015).

Intensive Growth Strategies

Strength

Brand equity: Pepsi is one of the conspicuous brands in the world of the food industry. It is even identified as the ‘brand of youth’. Pepsi has attained high brand recognition. It has been even ranked 29^th in the Forbes as the most valuable brands list. The company has attained high brand recognition (Bull, et al. 2016).

Customer loyalty: Pepsi has a great loyal customer base. The company is identified for the iconic taste of the soft drinks and has a great number of beverages in the list. The customers do not shift to other brands due to the amazing taste and the company has attained loyalty. Pepsi emerges as a strong base when it comes to juice and packed water.

Efficient supply chain system: Pepsi has maintained one of the best supply chains in the globe. It makes products obtainable throughout the world. Other than the supply chain, Pepsi also has efficient reverse logistics associated with it (Fayol, 2016).

Weaknesses

Competition: Pepsi has attained heavy competition from companies like Coca-Cola in the category of soft drinks. These both companies are always in strong competition with each other (Kolbina, 2015). This competition provides room to the customer to switch their brand along with the loyalty.

Product dependence: Pepsi is only present in the food and beverage industry which can be destructive in the future. The company needs to differentiate its business to other product categories in order to become a global leader.

Brand ambassadors: The ill performance or wrong remarks of the famous personalities can result in damaging the goodwill of the company. As the personalities represent the brand. The over dependency on the celebrities for the promotion has become a huge risk for Pepsi (Kazanjian, Drazin & Glynn, 2017).

Products alleged as unhealthy: Nowadays people are focused on more healthy drinks then cold drinks. This way soft drinks of the company are professed as unhealthy. Other than this, some products like ‘Crystal Pepsi” failed to attain popularity and failed. Such incidents damage the goodwill of the company and give competitors a chance to grow.

Opportunities

Healthy options: Pepsi can focus on healthy products to improve the health implications. The customers should be aware of the same. Diet Pepsi is one of the positive remarks towards healthy options (Moghaddaszadeh, et al. 2015).

Diversification: Pepsi can diversify its business into various market segments. It can be a huge opportunity for the company. Pepsi has sufficient talent, resources and finance to expand its business in advanced product categories (Noe, et al. 2017). It can also be initiated by the acquisitions.

SWOT Analysis

Corporate social responsibility (CSR): Pepsi can do more of the CSR activities which are helpful in tackling the negative remarks which spoil the brand image of the company. It can equally benefit the local people.

Threats

Health factor: The unhealthy factor linked with the products of Pepsi can take a peal on the health-conscious customers and can result in losing them. It is clearly evident from the falling sale of soft drinks.

Government norms: The various norms of the different countries can be difficult for the company to handle along with the compliance (Madhavaram, Hunt & Bicen, 2017).

Competitors: Pepsi has attained competitors like Kraft Foods, Coca-Cola, Nestle, Snapple group and more.  

Conclusion

The customer base of Pepsi is strong enough and comprised of mainly young customers. The mission of the company works continuously to attain the purpose. The core values have made the company where it stands. The vision of the company is to create a better tomorrow than today has helped in succeeding. Pepsi makes use of intensive growth strategies as a corporate level strategy. It has facilitated the company to sustain a competitive advantage. The business level strategy comprised of the low-cost differentiation strategy and takes advantage of the economies of scale. Add on SWOT analysis has addressed the entire organization.

References

Aras, G., & Crowther, D. (2016). The durable corporation: Strategies for sustainable development. Routledge.

Bocken, N. M., de Pauw, I., Bakker, C., & van der Grinten, B. (2016). Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 33(5), 308-320.

Brick, D. J., Fitzsimons, G. M., Chartrand, T. L., & Fitzsimons, G. J. (2017). Coke vs. Pepsi: Brand compatibility, relationship power, and life satisfaction. Journal of Consumer Research, 44(5), 991-1014.

Bull, J. W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., ... & Carter-Silk, E. (2016). Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services framework. Ecosystem services, 17, 99-111.

Fayol, H. (2016). General and industrial management. Ravenio Books.

Kazanjian, R. K., Drazin, R., & Glynn, M. A. (2017). Implementing strategies for corporate entrepreneurship: a knowledge?based perspective. Strategic entrepreneurship: Creating a new mindset, 173-199.

Kolbina, O. (2015). SWOT analysis as a strategic planning tool for companies in the food industry. Problems of Economic Transition, 57(9), 74-83.

Madhavaram, S., Hunt, S. D., & Bicen, P. (2017, May). The FREE (Firm Resources and External Environment) Framework as an Alternative to SWOT: An Abstract. In Academy of Marketing Science Annual Conference (pp. 49-49). Springer, Cham.

Moghaddaszadeh, M., Sarfaraz, A. H., Komijan, A. R., & Shojaie, A. A. (2015). An integration of SWOT and factor analysis to determining and prioritizing strategies: case study of a Persian food industry. International Journal of System Assurance Engineering and Management, 6(3), 297-303.

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.

Saebi, T., & Foss, N. J. (2015). Business models for open innovation: Matching heterogeneous open innovation strategies with business model dimensions. European Management Journal, 33(3), 201-213.

Welford, R. (2016). Corporate environmental management 1: systems and strategies. Routledge.