PepsiCoBy: Ashley Cleary, Sylvia LaBrie, Andrea Baril, Marie-Michele Lachance

OverviewCompany OverviewHistory of PepsiGrowth 2009 Events and IssuesExisting Mission and Vision statementNew Mission and Vision StatementSWOT AnalysisExternal AssessmentCPMEFEPositioning MapInternal AssessmentOrganizational ChartIncome StatementBalance SheetFinancial ratiosIFE Matrix

Strategy FormulationSWOT MatrixGrand Strategy MatrixBCGSpace Matrix DataSpace MatrixIE MatrixMatrix AnalysisQSPM MatrixStrategic PlanStrategyObjectivesRecommendationsAssumptionsImplementationEPS/EBITProjected FinancialsEvaluationBalanced ScorecardKey Future Ratios

HistoryIn 1965: PepsiCo, Inc. is founded by Donald M. Kendall, President and CEO of Pepsi-Cola and Herman W. Lay, Chairman and CEO of Frito-Lay, through the merger:1. Pepsi-Cola In 1898: Caleb Bradham, a New Bern, North Carolina, pharmacist, created "Brad's Drink," a carbonated soft drink he created to serve his drugstore's fountain customers. 2. Frito Company3. H. W. Lay CompanyThe Major products of the companies are: Pepsi-Cola Company Fritos brand corn chips, Lay's brand potato chips, Cheetos brand cheese flavored snacks, Ruffles brand potato chips, Rold Gold brand pretzels.Mountain Dew

1966: Doritos is introducedPepsi enters Japan and Eastern Europe.1970:PepsiCo moves from New York City to new world headquarters in Purchase, N.YPepsi is the first company to respond to consumer preference with lightweight, recyclable, plastic bottles.1977:PepsiCo acquires Pizza Hut, Inc1978:Taco Bell1980:PepsiCo Food Service International (PFSI) is formed to focus on overseas development of restaurants.Growth

1982:Pepsi Free and Diet Pepsi Free, the first major brand caffeine-free colas, are introduced.Inauguration of the first Pepsi-Cola operation in China.1985:PepsiCo is now the largest company in the beverage industry. The company has revenues of more than $7.5 billion, more than 137,000 employees. Pepsi-Cola products are available in nearly 150 countries and territories around the world. Snack food operations are in 10 international markets.1986:PepsiCo purchases 7Up International, the third largest franchise soft drink operation outside the United States.1993:Pepsi-Cola introduces Aquafina bottled water into test market.1996:Pepsi-Cola launches Pepsi World at www.pepsiworld.com

Growth Cont.

Pepsi products are in almost 200 countries throughout the worldThere are 22 different brand lines that account for at least $1 billion per year per brandGlobal

Celebrated 75 years in CanadaWas on the Best Food for Women list in Womens Health magazineBegan a partnership with the NFLWon U.S. EPA SmartWay Environmental Excellence awardBecame official beverage of Norwegian Cruise Lines

2009

Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.Mission Statement

PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today."Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.

Vision Statement

Our mission is to be the world's premier consumer products company focused on convenient foods and beverages through stores as well as our website. (1,2.3,4) We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. (5,8,9) And in everything we do, we strive for honesty, fairness and integrity. (6,7)

Proposed MissionCustomerProducts or ServicesMarketsTechnologyConcern for survival, profitability, and growthPhilosophySelf-ConceptConcern for public imageConcern for employees

PepsiCo, in association with smaller brands, offers a wide variety of products from beverages to snacks at low cost.

Proposed Vision

External Assessment

1. Opening in market for less costly products2. Growth opportunities in developed countries as well as international nonestablished countries 3. Pepsi recently reacquired ownership of its two largest bottlers, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS)4. Compete in more than one industry (non-alcoholic beverage industry, the salty or savory snack food industry, and the breakfast food industry)5. Growth in the carbonated drink market is the largest in Asia and Europe6. The world's demand is experiencing a growth with the sports drinks, bottled water, and energy drinks

Opportunities

1. Fierce competition from Coca-Cola, which owns the largest piece of the market share2. The downturn in economy, which lead customers to shift away from bottles of water to tap water.3. Because of the recession, customers are finding cheaper alternatives to the national brands.4. Customers are getting more conscious and concerned about their eating habits and general health. 5. Campaign against plastic containers has impacted the sale of bottled beverages 6. Highly dependent on supplies of clean water, to prevent contamination

Threats

CPM

EFE

Key External FactorsWeightsRatingWeighted Score0.0 to 1.01 to 4Opening in market for less costly products0.0520.1Growth opportunities in developed countries as well as international unestablished countries0.0830.24Pepsi recently reacquired ownership of its two largest bottlers, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS)0.0510.05Compete in more than one industry (non-alcoholic beverage industry, the salty or savory snack food industry, and the breakfast food industry)0.1340.52Growth in the carbonated drink market is the largest in Asia and Europe0.0930.27The world's demand is experiencing a growth with the sports drinks, bottled water, and energy drinks. 0.1340.52Threats0Fierce competition from Coca-Cola, which owns the largest piece of the market share0.1240.48The downturn in economy, which lead customers to shift away from bottles of water to tap water.0.0520.1Because of the recession, customers are finding cheaper alternatives to the national brands.0.130.3Customers are getting more conscious and concerned about their eating habits and general health. 0.0940.36Campaign against plastic containers has impacted the sale of bottled beverages0.0520.1Highly dependent on supplies of clean water, to prevent contamination0.0620.12Totals13.16

Positioning MapHigh Prices

Pepsi Co.

Coca Cola

Dr. Pepper Snapple GroupLow PricesDiverse Products

Limited Products

Market Share

Revenue Distribution

Stock Price History

Internal Assessment

1. Strong brand equity 2. Well-known worldwide3. Innovating company 4. Ethical, socially responsible, and sustainable company5. Strong advertising company with more than 40 slogans and songs6. PepsiCo as the largest part of the market share after Coca-Cola7. PepsiCo owns a wide variety of smaller brands which able them to offer a large product range from beverages to snacks

Strengths

1.PepsiCo production is really expansive because of the need to constantly develop new products to meet the changing customers demands2. PepsiCo is experiencing a lack of focus towards Pepsi sodas3. PepsiCo is experiencing product recalls4. PepsiCo has a low employment productivity and a weak distribution5. PepsiCo depends too much on the US market6. PepsiCo is far behind Coca-Cola in the international market

Weaknesses

IFE

Income Statement

Balance Sheet

Financial Ratios

Financial TrendsAdapted from www.moneycentral.msn.com

Organizational Chart

Revenues and Profits

Strategy Formulation

SWOT Matrix

Grand Strategy Matrix

BCG

Division Revenue % Revenue Profit Profit %Market ShareMarket GrowthFrito-Lay North America $ 13,224.00 31% $ 3,258.00 38%15.42%Quaker Foods North America $ 1,884.00 4% $ 628.00 7%1-0.95%Latin America Foods $ 5,703.00 13% $ 904.00 10%1-3.26%PepsiCo Americas Beverages $ 10,116.00 23% $ 2,172.00 25%0.8-7.51%Europe $ 6,727.00 16% $ 932.00 11%0.4-2.38%Asia, Middle East & Africa $ 5,578.00 13% $ 716.00 8%0.38.97%Total $ 43,232.00 100% $ 8,610.00 100%

BCG Cont.

SPACE Matrix

SPACE Graph1 2 3 4 5 6 1

2

3

4

5

6

6 5 4 3 2

IE Matrix

Matrix Analysis

QSPM

QSPM Cont.

Strategic Plan

Market development is a strategy that PepsiCo should apply by expanding in countries that not already establishedUse forward integration to acquire smaller companies in foreign markets to increase their market shareProduct development and related diversification should also be considered while trying to produce and distribute healthier productsStrategy

In the next 3 years, PepsiCo should acquire 3 brands per year in an international marketplaceOne of these 3 brands per year must be healthy Increase production and distribution of carbonated drinks in Asian and European countriesPepsiCo will expand into Africa to make use of the international market they are not part ofRecommendations

Spend $15 million on a healthier more eco-friendly beverage brand in an already established countrySpend $15 million on a healthier more eco-friendly snack brand in an already established countrySpend $10 million to acquire a smaller brand in AfricaIncrease our revenues by 5% in 2010Start our own environmental cause fund with $1 million

Objectives

Spend $40 million to acquire new brandsSpend $1 million to start an environmental cause groupRevenue increase of 5%Decrease short-term and long-term debt by using some of our cash and cash equivalents as well as retained earningsAssumptions

Implementation

Projected Income Statement

Projected Balance Sheet

Evaluation

Balanced Scorecard

Future Ratios

Fun Facts

http://www.buzzfeed.com/pepsi/the-10-most-iconic-pepsi-commercials-of-all-time-1q6t

Pepsi/Coke Rivalry

Questions?

"2010 Will be Changing for PepsiCo." Medill Reports Chicago. N.p., n.d. Web. 20 Apr. 2012. ."Coke vs Pepsi." Coke vs Pepsi. N.p., n.d. Web. 25 Apr. 2012. ." Google Image Result for http://41minds.files.wordpress.com/2011/04/bcggrowthsharematrix.png."Google. N.p., n.d. Web. 22 Apr. 2012.