Pepsico Case Study

RuoNan Zheng

3/6/16

                                                                 PepsiCo Case

         Based on the case study, PepsiCo’s as world’s largest snack and Beverage Company, “In 2014, PepsiCo’s corporate strategy had diversified the company into salty and sweet snacks, soft drinks, orange juice, bottled water, ready- to –drink tea and coffees, purified and functional waters….”  (C-310). The company was mainly focusing on sustaining performance, which related to product innovation, close relationships with distribution allies, international expansion, and strategic acquisitions.  The company had presented different strategies in different business segments.  For the Frito-Lay North America division, the company tended to convenience foods and focused on the nutritional content of snack foods. For example, producers begun to use healthier oils, eliminate trans fats or provide Flat earth fruit and vegetables snacks to satisfy consumers who take care about nutrition. Besides, the company used smaller bags that not only to avoid overeating but also to provide convenience for consumers. PepsiCo’s performs its strategy through the FLNA’s and helps the division to contribute to BFY and GFY snacks. For the Quaker Food North America division, the company tried to diversify the categories by producing hot and ready-to –eat cereals, pancake mixes, rice and paste side dishes in the United States and Canada.  For the PepsiCo Americas Beverages division, CSD took huge percent consumption, but PAB also had divided into various brands such as Gatorade sport drinks, Tropicana fruit juices and Lipton ready-to-drink tea. Because of the demand of the healthier beverage, the PAB tended to more sales of energy drinks, bottled water and also attributable to the noncarbonated beverages. For the PepsiCo international segment, the company had developed the understanding of consumer taste preferences and provided the similar taste preferences of salty snacks like classic varieties of Lay’s from country to country and only need to modest modifications its products. In addition, PepsiCo operated many plants, warehouses, distribution centers and offices over Latin America, Europe, Asia, Middle East, and Africa, in order to manufacturing and marketing their global and regional brands.

        From my industry attractiveness assessment showed in the exhibit 1, because the four Industry attractiveness scores are about 5, we can see that Frito-Lay North America, Quaker Food north America, PepsiCo Americas beverages and PepsiCo International are all participating in an attractive industry.  In the exhibit 2, the competitive strength assessments showed that PepsiCo Americas had the highest competitive strength at7.45 and Frito-Lay North America also was estimated at 7.3. Thus, they were considered as strong market contenders in the industry. While Quaker Oat food North America had score at 5.1, the company showed moderate competitive strength. In Nine-cell industry attractiveness-competitive strength Matrix.  PepsiCo Americas beverages and Frito-Lay North America had high level of industry attractive and also high priority for resource allocation based on their high level of industry attractive and business unit sales. Besides, PepsiCo international and Quaker Food North America had their medium level of resource allocation based on their average industry attractive comparing to other industry rivals