SM, PepsiCo, group Assignment final

MRC 3013 – Coca-cola Case Analysis

STRATEGIC MANAGEMENT

GROUP ASSIGNMENT GROUP 4PepsiCo-2009

For:

DR. MAS BAMBANG BAROTO

By:

D. PazookiMR091234

Ding Jie (Marya)MR091189

Wu Jing (Sofia)MR091187

TABLE OF CONTENTS

1.0 VISION AND MISSION

1.1 VISION EVALUATION

1.2 MISSION EVALUATION

2.0 EXTERNAL ANALYSIS..............................................................................6

2.1 PEST ANALYSIS................................................................................................7

2.2 COMPETITIVE FORCES........................................................................................8

2.3 PORTER’S FIVE FORCES...................................................................................11

2.4 LIST OF OPPORTUNITIES AND THREATS BEFORE ELIMINATING OVERLAPPED ITEMS

...............................................................................................................14

2.5 LIST OF OPPORTUNITIES AND THREATS AFTER ELIMINATING OF OVERLAPPED ITEMS

...............................................................................................................16

2.6 EFE MATRIX..................................................................................................18

2.7 KEY SUCCESS FACTOR..............................................................................20

2.8 CPM MATRIX.................................................................................................21

Pepsi Co Analysis Page 3

1.0 VISION AND MISSION

1.1 VISION EVALUATION

Vision Statement

“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.”

“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.”

AnalysisPepsiCo’s vision statement is concise and comprehensive. It is easily to understand and make the customers feel friendly and accessible. And this company play a important role in environment-protect and social benefits. It gives a strong believes of the company can make the profits for stakeholders. It also set up a well-known brand that related to the stakeholder value.PepsiCo have the brand concept is "ask for more". It can encourage young people to living with proactive attitude. It means PepsiCo have the meaning for young people, for example, PepsiCo means opportunities and infinitely room for ideal and they can enjoy their imagination and pursuit.PepsiCo Vision Statement:PepsiCo is aim to improve the environment of the world for population. Give the people and planet a healthier environment, the company will become more successful in the future.

1.2 MISSION EVALUATION

“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.”

AnalysisThe mission statement meets the requirements about the characteristics of a mission statement as followed: Broad in scope Inspiring Less than 250 words Identify the utility of a firm’s products

√ √

√ √

Pepsi co. Analysis Page 4

Reveal that the firm is socially responsible

Reveal that the firm is environmentally responsible

Includes most of the 9 components in mission statement

Reconciliatory Enduring

EXTERNAL ANALYSIS

2.1 PEST ANALYSIS

2.1.1 Economie Forces

Variables Case Issues FindingsOpportunities Threats

Downturn in the economy, U.S.

The downturn in the economy has also affected the sale of colas and water as some consumers have switched to store brands and tab water as cheaper alternatives to the national brands.

ü

World Demand World demand for carbonated soft drink has continued a slow. ü

International markets

PepsiCo investing $1billion in Russia over the next three years.

PepsiCo investing over $1billion in china over the next 4 years.

ü

drink market The carbonated soft drink market has shown a decline of 0.4% in 2007 in United State. ü

Steady overall growth for the last five years of around 9% with sports drinks, bottled water, and energy drinks.

ü

√ √

√ √√


2.1.2 Social, Culture, Demographic Environnent Forces


Lifestyle As consumer tastes have changed. Pepsi Co has developed liquid refreshment products that are light, calorie free, sugar free, caffeine free, sports and energy directed. Snacks also now have less salt and less fat.

ü

Consumers shifted from soft drinks to bottled water and sports drinks. ü

News of contamination

News of contamination (either real or perceived) can quickly destroy consumers’ confidence in a company’s ability to provide a safe, healthy product.

ü

Non for profit projects

PepsiCo has undertaken numerous projects and alliance around the world, working with such groups as the Earth institute at Columbia University, The Energy and Resources Institute, Keep America Beautiful, Exnora, and UNICEF.

ü

Recycled materials and reduce materials used

PepsiCo have initiated projects to increase use of recycled materials and reduce materials used in packaging.

ü

2.1.3 Political, Gouvernent and legal Forces


Environmental campaign

Recent environmental campaign against plastic containers has impacted the sale of bottled water and forced manufacturers to develop more environmentally friendly containers.

ü

Many stats now ban the selling of some soft drink brands in public schools due to obesity issues among youth.

ü

2.1.4 Technological Forces



Changing the technology to

reduce the costs

Pepsi Co opened one new factory in china and plans to open five more new plants over next two years, the new Pepsi Co plants uses 22% less water and 23% less energy than the average Pepsi plant in china.

ü

2.2 COMPETITIVE FORCES

2.2.1 Competitive Forces

Forces Case Issues Opportun

ities

Threats

Major

competitors

Coca-Cola, the brand known around the world, is the largest

producer and distributor of dark colas in the world and as such

is PepsiCo’s major competitor.

√

As Kraft continues to improve in the coming years, it should

become a stronger competitor in all divisions.

√

Competitors’

Strength

As the demand for dark colas has diminished, Coca-cola has

continued to strengthen their juice, ready-to-drink tea and

coffee products, water and sport drinks along with the

introduction of Truvia as a sweetener.

√


Coke generates most of its operating revenue outside the

United States with international concentrate sales

accounting for 77 percent and U.S. sales 23 percent.

√

The changes about restructuring the organization are

designed to strengthen the position of Kraft in the highly

competitive and dynamic markets in which it currently

operates.

√

The North American snacks and Cereals division produced

$5.025 billion in revenues in 2008, an increase of 3 percent

over 2007 revenue of $4.879 billion.

√

Competitors’

Weaknesses

In the North American market volume growth was down 1

percent.

√

Coca-Cola Company continues to expand even in the current

monetary crises.

√

With long-term debt of $18.5 billion (LTD to common equity of

83.73 percent), debt coverage could slow its progress.

√

Competitors’

Strategies

Coca-Cola’s strategy is enhanced by extensive advertising

through the bottling and distribution network and toward the

ultimate consumer.

√


Coca-Cola seems to be following a very concentrated

strategy by focusing almost exclusively on nonalcoholic

beverages with little, if any, tendency to diversify.

√

Kraft’s new strategies seem to be paying off in increased

revenue and possible future growth.

√

The nature of

Suppliers and

distributors

relationship of

the

Competitors

Coca-Cola has also invested in purchasing bottlers and

streamlining its operations.

√

2.3 PORTER’S FIVE FORCES

2.3.1 Competitive pressure among Rivalry

No Key Variables Case Issues Opportunities Threats Competitive Force

Strong Moderate Weak

Coca-Cola Brand identity Coca-Cola, the brand known around the world, is the largest producer and distributor of dark colas in the world and as such is PepsiCo’s major competitor.

√ √


Financial management

The financial for Coca-Cola show a strong cash position of $4.979 billion and long-term debt of only $2.781 billion.

√ √

Supplier power Coca-Cola’s strategy is enhanced by extensive advertising through the bottling and distribution network and toward the ultimate consumer.

√ √

Buyer power As the demand for dark colas has diminished, Coca-cola has continued to strengthen their juice, ready-to-drink tea and coffee products, water and sport drinks along with the introduction of Truvia as a sweetener.

√ √


Coke generates most of it’s operating revenue outside the United States with international concentrate sales accounting for 77 percent and U.S. sales 23 percent.

√ √

Industry concentration

The global trends of a mature and declining market in North America with growth in other parts of the world.

√

√

Marketing method

Advertising for Coca-Cola is similar to Pepsi in that they also rely

√ √


heavily on short catchy slogans, songs, and celebrity endorsements.

Substitutes Coca-Cola will continue to concentrate on its cola business but expand its water and juice sales and continue growth in international markets.

√ √

Market share Coca-Cola holds the largest share of the U.S. cola market at 41% with Pepsi second at 36.7%.

√ √

Kraft Restructuring Kraft Foods is currently in the process of reinventing itself by restructuring the organization into two major divisions, North America and International. They have brought in new top management and six new independent board directors. These changes are design to strengthen the position of Kraft in the highly competitive and dynamic markets in which it currently operates.

√ √


The Kraft financials for 2008 show a 13.32 percent increase in net revenues over 2007 to $42.201 billion.

√ √



The North American snacks and Cereals division produced $5.025 billion in revenues in 2008, an increase of 3 percent over 2007 revenue of $4.879 billion.

√ √

Industry growth As Kraft continues to improve in the coming years, it should become a stronger competitor in all divisions.

√ √


With long-term debt of $18.5 billion (LTD to common equity of 83.73 percent), debt coverage could slow its progress.

√ √

2.3.2 Competitive Pressure associated with New Entrant

No Key Variables Case Issues Opportunities

Threats

Competitive Force

Strong Moderate Weak

1 Promotion and advertising

This amount of spending on promotion and advertising has led to volume growth in Eurasia of 7 percent, Europe of 3 percent, Latin American of 8 percent, and the Pacific of 8 percent.

√ √

2 Package Coca-Cola has also invested in purchasing bottlers and streamlining its operations.

√ √


3 advertising Coca-Cola’s strategy is enhanced by extensive advertising through the bottling and distribution network and toward the ultimate consumer.

√ √

4 Industry growth As Kraft continues to improve in the coming years, it should become a stronger competitor in all divisions.

√ √

2.3.3 Competitive Pressure from the Substitute Products

No Key Variables Case Issues Opportunities

Threats

Competitive ForceStrong Moderate Weak

1 Substitutes As the demand for dark colas has diminished, Coca-cola has continued to strengthen their juice, ready-to-drink tea and coffee products, water and sport drinks along with the introduction of Truvia as a sweetener.

√ √

2 International market

Coca-Cola will continue to concentrate on its cola business but expand its water and juice sales and continue growth in international markets.

√ √

3 Restructuring Kraft Foods is currently in the process of reinventing itself by restructuring the organization into two major divisions, North America and International. The North American division is composed of

√ √


Beverages, Cheese &Foodservice, Convenient Meats, Grocery, and Snacks & Cereals. The International division consists of European Union and Developing markets.

4 Trend of consumer

Non-carbonated products are today about 40 percent of Pepsi-Cola volume, versus less than 15 percent 10 years ago.

√ √

5 Supplier Pepsi’s desire to own its own bottlers is to spur its non-carbonated health and wellness products, which are often smaller-volume, slower-moving products.

√ √

2.3.4 Competitive Pressure from the Suppliers’ Bargaining Power

No Key variables Case Issues Opportunities

Threats

Competitive ForceStrong Moderate Weak

1 Suppliers Pepsi’s desire to own its own bottlers is to spur its non-carbonated health and wellness products, which are often smaller-volume, slower-moving products.

√ √

2 Market share PBG and PAS distribute nearly 75 percent of Pepsi drinks in the United States, excluding Galorate.

√ √

3 Resource Pepsi highly dependent on supplies of clean water.

√ √

2.3.5 Competitive Pressure from Buyers’ Bargaining Position

No Key variables Case Issues Opportunitie Threat Competitive Force


s s Strong Moderate Weak

1 Economic troubles

PepsiCo may need to further adjust costs to reflect continuing economic troubles as consumers shift to less costly drinks and snacks.

√ √

2 Package There is also a shift away from bottled water and back to the tap.

√ √

3 Healthy In recent years we have seen the introduction of diet, free, and zero colas as well as flavored water sports and energy drinks.

√ √

2.3.6 Result the Industry Analysis

No Key Variables Competitive ForceStrong Moderate Weak

1 Competitive pressure among rivalry 7 4 3

2 Competitive pressure associated with new entrant 3 1 -

3 Competitive pressure from the substitute products 3 1 1

4 Competitive pressure from supplier’s bargaining power 2 - 1

5 Competitive pressure from buyer’s bargaining power 3 - -

Total Sum 18 6 5

PepsiCo is a global company operating in the non-alcoholic beverage industry, the salty or savory snack food industry, and the

breakfast food industry.


2.3.7 Nonalcoholic beverage

The global nonalcoholic beverage industry is composed of carbonated soft drinks, fruit and vegetable juices, bottled water, sports and energy drinks, concentrates, and ready-to-drink coffee and teas.

World demand kept a slow but steady overall growth for last five years. However, in the United States, the carbonated soft drink market has shown a decline and consumers purchased bottled water and sports drinks.

Coca-Cola holds the largest share of the U.S. cola market at 41% with Pepsi second at 36.7%. Both Pepsi and Coke manufacture the concentrates and syrups, which are sold to bottlers, and then bottlers distribute the finished product to

grocery stores, convenience stores, restaurants, vending machines and so on. Pepsi and Coke spend heavily on national advertising and provide large promotional incentives to the bottlers. The market for these products depends on the changing taste of consumers and requires manufactures to develop new products to meet those

changing demands. These companies are highly dependent on supplies of clean water. The downturn in the economy has affected the sale of colas and water. The environmental campaign against plastic containers has impacted the sale of bottled water and forced manufactures to develop more

environmentally friendly containers.

2.3.8 Savory Snack

The U.S. savory snack market is composed of over 400 companies with combined annual revenues of $23 billion. It is concentrated with the top 50 companies controlling 75% of the market.

The largest competitors in this industry include PepsiCo’s Frito-Lay, Kraft’s Nabisco and Kellogg’s Retail Snacks division. The largest product segment of this market is potato chips (30% of industry revenues) followed by tortilla chips (20%) and bulk nuts (10%). Companies in this industry must compete against each other through extensive advertising, product promotions, and product innovation. Some of the new products are designed to compete on taste; others are designed to reflect a particular consumer concern such as obesity or

hypertension.

3.3.9 Breakfast Cereals The global breakfast foods market is composed of more than just cereals, it also includes bread, pastries, breakfast bars, and spreads. Break is by far largest segment of this market followed by pastries and then cereals. The greatest growth for breakfast foods appears to be in breakfast bars, and the fastest regional growth is the Asian-Pacific market. The largest

markets continue to be Europe and America, but both are mature with low growth rates. PepsiCo is primarily in the U.S. breakfast cereal market with the Quaker division generating approximately 4% of total revenues, down from 5% in

2007 and 2006.


This market is highly concentrated; the major competitors are Kellogg and General Mills. Demand is driven by consumer demographics (age and lifestyle) and health considerations.

2.4 Competitive Forces of Industry

No. Opportunities

1 PepsiCo is a global company operating in the non-alcoholic beverage industry, the salty or savory snack food industry, and the breakfast food industry.

2 World demand has continued a slow but steady overall growth for the last five years of around 9 percent with sports drinks, bottled water, and energy drinks showing the largest growth.

3 Growth in the carbonated drink market was largest in Asia and Europe.

4 The market for these products depends on the changing taste of consumers and requires manufactures to constantly develop new products to meet those changing demands.

5 The global chip market is over $32 billion, with an annual growth rate of approximately 6.35 percent.

6 It is estimated that 99 percent of all American households have salty snacks and the average household spends approximately $80 yearly on 32 pounds of these products.

7 Some of the new products are designed to compete on taste; others are designed to reflect a particular consumer concern such as obesity or hypertension.

8 The global breakfast foods market is composed of more than just cereals: it also includes bread, pastries, breakfast bars, and spreads.

9 The greatest growth for breakfast food appears to be in breakfast bars, and the fastest regional growth is the Asian-Pacific market.

10 Ready-to-eat cereals comprise about 90 percent of total industry revenue.


No. Threats

1 In the United States, the carbonated soft drink market has shown a decline of 0.4 percent in 2007 as consumers shifted from soft drinks to bottled water and sports drinks.

2 Coca-Cola holds the largest share of the U.S. cola market at 41% with Pepsi second at 36.7%.

3 The company are highly dependent on supplies of clean water.

4 The downturn in the economic has also affected the sale of colas and water as some consumers have switched to store brands and tap water as cheaper alternatives to the national brands.

5 A recent environmental campaign against plastic containers has impacted the sale of bottled water.

6 Companies in this industry must compete against each other through extensive advertising, product promotions, and product innovation.

7The largest markets continue to be Europe and America, but both are mature with low growth rates.

8 PepsiCo is primarily in the U.S. breakfast cereal market with the Quaker division generating approximately 4 percent of total revenues, down from 5 percent in 2007 and 2006.

9 The major competitors in this market are Kellogg and General Mills.

10 This industry is also highly concentrated with the top 50 companies controlling 75 percent of the market.

11 The largest competitors in this industry include PepsiCo’s Frito-Lay(with 39 percent), Kraft’s Nabisco(with 11 percent), and Kellogg’s Retail Snacks division.

2.5 LIST OF OPPORTUNITIES AND THREATS BEFORE ELIMINATING OVERLAPPED ITEMS

Opportunities


1. The Coca-cola’ volume growth was down 1% in the North America market.

2. Kraft has long-term debt of $18.5 billion (LTD to common equity of 83.73 percent); debt coverage could slow its progress that become a

stronger competitor in all divisions.

3. In the nonalcoholic beverage industry, world demand has continued a slow but steady overall growth for the last five years.

4. In the savory snack industry, 99% of all American households have salty snacks and the average household spends approximately &80

yearly on 32 pounds of these products.

5. In the breakfast cereals industry, the demand is driven by consumer demographics (age and lifestyle) and health considerations because a

fast-paced life and health concerns shape our perceptions of the first meal of the day.

Threats

1. Coca-Cola, the brand known around the world, is the largest producer and distributor of dark colas in the world and as such is PepsiCo’s

major competitor.

2. Coca-Cola holds the largest share of the U.S. cola market at 41% with Pepsi second at 36.7%.

3. The financial for Coca-Cola show a strong cash position of $4.979 billion and long-term debt of only $2.781 billion.

4. Coca-Cola’s strategy is enhanced by extensive advertising through the bottling and distribution network and toward the ultimate

consumer.


5. As the demand for dark colas has diminished, Coca-cola has continued to strengthen their juice, ready-to-drink tea and coffee products,

water and sport drinks along with the introduction of Truvia as a sweetener.

6. Coke generates most of its operating revenue outside the United States with international concentrate sales accounting for 77 percent and

U.S. sales 23 percent.

7. The global trends of a mature and declining market in North America with growth in other parts of the world.

8. Advertising for Coca-Cola is similar to Pepsi in that they also rely heavily on short catchy slogans, songs, and celebrity endorsements.

9. Coca-Cola will continue to concentrate on its cola business but expand its water and juice sales and continue growth in international

markets.

10. Kraft Foods is currently in the process of reinventing itself by restructuring the organization into two major divisions, North America and

International.

11. They have brought in new top management and six new independent board directors.

12. These changes are design to strengthen the position of Kraft in the highly competitive and dynamic markets in which it currently operates.

13. The Kraft financials for 2008 show a 13.32 percent increase in net revenues over 2007 to $42.201 billion.

14. The North American snacks and Cereals division produced $5.025 billion in revenues in 2008, an increase of 3 percent over 2007 revenue

of $4.879 billion.

15. As Kraft continues to improve in the coming years, it should become a stronger competitor in all divisions.

16. In the United States, the carbonated soft drink market has shown a decline of 0.4% in 2007 as consumers shifted to bottled water and

sports drinks.


17. The company are highly dependent on supplies of clean water

18. The downturn in the economic has also affected the sale of colas and water as some consumers have switched to store brands and tap

water as cheaper alternatives to the national brands.

19. A recent environmental campaign against plastic containers has impacted the sale of bottled water.

2.5.2 LIST OF OPPORTUNITIES AND THREATS AFTER ELIMINATING OF OVERLAPPED ITEMS

Opportunities

1. The Coca-cola’ volume growth was down 1% in the North America market.

2. Kraft has long-term debt of $18.5 billion (LTD to common equity of 83.73 percent); debt coverage could slow its progress that become a

stronger competitor in all divisions.

3. In the nonalcoholic beverage industry, world demand has continued a slow but steady overall growth for the last five years.

4. In the savory snack industry, 99% of all American households have salty snacks and the average household spends approximately &80

yearly on 32 pounds of these products.

5. In the breakfast cereals industry, the demand is driven by consumer demographics (age and lifestyle) and health considerations because a

fast-paced life and health concerns shape our perceptions of the first meal of the day.

Threats


1. Coca-Cola, the brand known around the world, is the largest producer and distributor of dark colas in the world and as such is PepsiCo’s

major competitor.

2. The financial for Coca-Cola show a strong cash position of $4.979 billion and long-term debt of only $2.781 billion.

3. As the demand for dark colas has diminished, Coca-cola has continued to strengthen their juice, ready-to-drink tea and coffee products,

water and sport drinks along with the introduction of Truvia as a sweetener.

4. Coke generates most of its operating revenue outside the United States with international concentrate sales accounting for 77 percent and

U.S. sales 23 percent.

5. The global trends of a mature and declining market in North America with growth in other parts of the world.

6. Coca-Cola will continue to concentrate on its cola business but expand its water and juice sales and continue growth in international

markets.

7. Kraft Foods is currently in the process of reinventing itself by restructuring the organization into two major divisions, North America and

International.

8. As Kraft continues to improve in the coming years, it should become a stronger competitor in all divisions.

9. In the United States, the carbonated soft drink market has shown a decline of 0.4% in 2007 as consumers shifted to bottled water and

sports drinks.

10. The company is highly dependent on supplies of clean water.

11. The downturn in the economic has also affected the sale of colas and water as some consumers have switched to store brands and tap

water as cheaper alternatives to the national brands.


2.6 EFE MATRIX

Opportunities Weight Rating WeightedScore

O1) The Coca-cola’ volume growth was down 1% in the North America market.

.0.06 2 0.12

O2) Kraft has long-term debt of $18.5 billion (LTD to common equity of 83.73 percent); debt coverage could slow its

progress that become a stronger competitor in all divisions.

coverage could slow its progress that become a stronger competitor in all divisions.

0.09 4 0.36

O3) In the nonalcoholic beverage industry, world demand has continued a slow but steady overall growth for the last

five years.0.07 3 0.21

O4) In the savory snack industry, 99% of all American households have salty snacks and the average household spends

approximately &80 yearly on 32 pounds of these products. 0.08 3 0.24

O5) In the breakfast cereals industry, the demand is driven by consumer demographics (age and lifestyle) and health

considerations because a fast-paced life and health concerns shape our perceptions of the first meal of the day. 0.06 2 0.12

THREAT


T1) Coca-Cola, the brand known around the world, is the largest producer and distributor of dark colas in the world and

as such is PepsiCo’s major competitor.0.07 4 0.28

T2) The financial for Coca-Cola show a strong cash position of $4.979 billion and long-term debt of only $2.781 billion.0.04 2 0.08

T3) As the demand for dark colas has diminished, Coca-cola has continued to strengthen their juice, ready-to-drink tea

and coffee products, water and sport drinks along with the introduction of Truvia as a sweetener.0.06 3 0.18

T4) Coke generates most of its operating revenue outside the United States with international concentrate sales

accounting for 77 percent and U.S. sales 23 percent.0.07 3 0.21

T5) The global trends of a mature and declining market in North America with growth in other parts of the world. 0.04 1 0.04

T6) Coca-Cola will continue to concentrate on its cola business but expand its water and juice sales and continue

growth in international markets.0.08 3 0.24

T7) Kraft Foods is currently in the process of reinventing itself by restructuring the organization into two major

divisions, North America and International. 0.04 1 0.04

T8) As Kraft continues to improve in the coming years; it should become a stronger competitor in all divisions. 0.03 1 0.03

T9) In the United States, the carbonated soft drink market has shown a decline of 0.4% in 2007 as consumers shifted to

bottled water and sports drinks.0.07 3 0.21

T10) The company is highly dependent on supplies of clean water 0.08 4 0.32


T11) The downturn in the economic has also affected the sale of colas and water as some consumers have switched to

store brands and tap water as cheaper alternatives to the national brands.0.06 2 0.12

Ability to Respond [Poor(1), Below average(2), Above average(3), Superior(4)]

TOTAL 1.00 2.80

Since the total weighted Score is higher than 2.5 (average), the 2.80 represents the strong ability of firm to respond to the existing opportunities and threats.


2.7 KEY SUCCESS FACTOR

Factors References (Case Fact / Guideline)

Customer Loyalty

PepsiCo must appeal to the ultimate consumer through extensive advertising and promotional activities.

Quality (Healthy- drinks)

As consumer tastes have changed, PepsiCo has developed liquid refreshment products that are light, calorie free, sugar free, caffeine free, sports and energy directed, and flavored.

Snacks now have less salt and less fat and baked, kettled, and made with vegetables.

Branding PepsiCo is indeed a large company and is defined in the 10K as “a leading global beverage, snack and food company”.

Marketing

Globally, PepsiCo operates in Canada, Latin America, Europe, Middle East, Asia, Northern Asia, Australia, and the Asian Pacific. PepsiCo continues to expand its markets in both the beverage and snack food industries through market penetration, mergers, and acquisitions.


Innovation

As consumer tastes have changed, PepsiCo has developed liquid refreshment products that are light, calorie free, sugar free, caffeine free, sports and energy directed, and flavored.

Snacks now have less salt, sea salt, baked, zero trans fat, made of vegetables, low carb, organic, hot, sweet, black, green, and with chili or cheese added.

Market share

PepsiCo’s strategy in China is to overtake Coke, which has a 47.3% market share in the country’s cola market versus Pepsi’ 44.5%.

Coca-Cola and PepsiCo hold the largest share of the U.S. cola market at 23% and 25%.

In the snack industry, the PepsiCo’s Frito-Lay has 39% market share.

2.8 CPM MATRIX

2.8.1 Nonalcoholic Beverage Industry

CRITICAL SUCCESS FACTORS

WeightPepsiCo Coca-Cola

Rating Score Rating Score

Customer Loyalty 0.20 4 0.80 4 0.80

Quality (Healthy- drinks) 0.25 3 0.75 3 0.75


Branding 0.15 4 0.60 3 0.45

Marketing 0.15 3 0.45 4 0.60

Innovation 0.10 4 0.40 3 0.30

Market share 0.15 4 0.60 4 0.60

TOTAL 1.00 3.60 3.50

According the evaluation in CPM matrix, it shown that the PepsiCo has the greatest weighted score (3.60) representing strongest competitive position close to Coca-Cola (3.50).

2.8.2 Snack and Food Industry

CRITICAL SUCCESS FACTORS

WeightPepsiCo Kraft Kellogg

Rating Score Rating Score Rating Score

Customer Loyalty 0.20 4 0.80 4 0.80 3 0.60

Quality (Healthy- foods) 0.25 4 1.00 4 1.00 3 0.75

Branding 0.13 4 0.52 3 0.39 4 0.52

Marketing 0.15 3 0.45 2 0.30 3 0.45

Innovation 0.12 2 0.24 3 0.36 3 0.36

Market share 0.15 3 0.45 3 0.45 3 0.45

TOTAL 1.00 3.46 3.30 3.13


According the evaluation in CPM matrix, it shown that the PepsiCo has the greatest weighted score (3.46) representing strongest competitive position close to Kraft (3.30). And the Kellogg is the third one (3.13).

Documents

SM, PepsiCo, group Assignment final