PepsiCo Inc is a publicly traded company that operates in the beverage industry. Established in the 1890s by Caleb Bradham, who was a pharmacist, the company became publicly traded in 1903. Initially, the company operated under the name Pepsi-cola. In the year 1965, the Pepsi-cola merged with Frito-lay to form the current company. At the merging time, Pepsi-cola Company produced products such as Pepsi-Cola, Mountain Dew and Diet Pepsi. Frito-lays on the other hand produced products such as Lay’s potato chips, Fritos corn chips, Ruffles potato chips; Cheetos cheese flavored snacks and Rold Gold pretzels (Young, 2015). PepsiCo Inc Company has strengths, weaknesses, opportunities and threats. However, the company manages to exploit the strengths and opportunities presented to it in ensuring it remain competitive in the market.

With the acquisition of Tropicana in the year 1998 and merger with Quaker Oats, the company grew bigger. As such, the company was provided with an excellent opportunity to operate within the larger United States of America market, and this set the beginning for the globally recognized company. Currently, PepsiCo operates in more than 200 countries around the world. Some of the company’s main products include Pepsi Max, Pepsi Samba, Mirinda, Pepsi Twist, Crystal Pepsi, Pepsi Jazz, and Pepsi One (Young, 2015). However, three brands perform best in the U.S, which includes Diet Pepsi, Mountain Dew, and Pepsi-Cola. Apart from beverages, the company also holds a market share of 56% through production and distribution of salty

PepsiCo Inc operates in an oligopoly market. An oligopoly market has a small number of firms dominating the market. The actions of any of the dominant firms affect the other companies. The major players in the beverage industry include PepsiCo, Coca Cola, Rebbull, Living Energy and Hansen Natural Corporation.  These firms dominate the beverage market and usually buy out other small companies that enter the market. All these firms sell identical and differentiated products.

The beverage industry has entry barriers. Although it is possible for new entrants to enter the beverage market in the US, as the legalities are favorable, the threat of entrant is high (Gamble and Thompson, 2013). It is difficult for a new beverage company to maneuver in the industry in the presence of the well-established companies, which have been in the industry for a long time. The reason behind this argument is that the industry is very competitive. Any new entrant in this industry must be financially stable and have well-formulated strategies to help expand the market share and enhance competitiveness.

This kind of situation is hard especially in the U.S. market, which is very unpredictable due to the high number of well-informed customers. The already existing companies have established brand loyalty and this makes it hard for new entrants to establish and enjoy competitive advantage since the customers in this market are very sensitive and they would rather buy a product that they know the manufacturer at a high price, rather than a new cheap product from a new manufacturer. A small number of dominant companies, differentiated goods and barriers to market industry are characteristics of an oligopoly market snacks.

The company’s major competitors include Coca-Cola Company, Monster Beverage Corporation, DPSG, Mondelēz International, Hansen Natural Corporation, Kraft Foods Group, National Beverage Corp, The Kellogg Company, Nestlé S.A., ConAgra Foods., Snyder’s-Lance and other beverage, food and snack companies. The success and growth of the company is due to its increasing market share, brand loyalty, competitive advantage, as well as enhancement of customer confidence and loyalty (Gamble & Thompson, 2013). In addition, the company has a variety of products that are available all over the world a clear indication that it is a success and growth oriented Beverage Company.

Currently, PepsiCo Inc distributes its products to over 200 countries worldwide.  The food products produced by the company include flavored snacks, chips, rice, cereals, dairy-based product and pasta. Currently the company’s portfolios of beverages include carbonated soft drinks, ready-to-drink tea and coffee, bottled water, sports drinks and juices. By the end of the year 2014, the company had approximately 274000 employees. The company has maintained its mission of being the market leader especially in the US. As of the year 2015, the company commanded a market share of 20.5% worldwide in the beverage industry (The Statistics Portal, 2015).  The company seeks to continue producing quality products to its customers. At the same time, the company endeavors in providing success and growth opportunities for its employees, investors and all its business partners.

Strengths

The strengths of the company are internal. First, the company has been in existence for many years and has managed to build a brand of its own. By use of celebrities, PepsiCo has managed to build a brand for those who care for their health. PepsiCo Inc operates in over 200 countries. This enables the company to access a large base revenue sources. Successful penetration in multiple national markets has provided a much broader customer base from which it generates revenue while minimizing costs and increasing profits (Young, 2015). With its globalization, the company has a larger market base and development meaning the company risk is spread across a larger customer base.

If issues of supply, regulation or environment arise in one country, the company still operates in the other countries. Globally the company has a larger human resource pool creating access to a larger talent access. The company has approximately 274000 employees. Having diverse employees who can interact with different populations and different business partners is also an advantage. This has also given the company an ability to move people around to different locations and roles, and that’s an advantage to the company.

The company has a diversified product portfolio. The company has a wide range of `products in the market ranging from carbonated drinks to snacks. That ensures that the risks in the market are spread along a wide variety of products. The company also has popular subsidiary brands. Through the years, the company has acquired other companies such as Frito-Lays, Tropicana, Quaker Oats Company, Quaker Foods North America and Gatorade. These subsidiaries have been very influential in the growth of the company. PepsiCo Inc has an efficient and strong supply chain (Young, 2015). The company has regional stores where the products are stored and supplied to different areas. This has enabled the company to reach the remote areas where other companies have not managed to reach. Combined with the global advertising done by the company by use of celebrities, the brand awareness in all regions is high.

Another strength the company has is the Pepsi Refresh project which is involved in funding new ventures and idea aimed at benefiting the society. This is part of the corporate social responsibility. Other corporate social responsibility activities include the PepsiCo Foundation. The foundation works in the sectors of health, education, water conservation, and others.

Weaknesses

The major weakness faced by the company is competition, especially in the drinks segment. Coca-Cola is the leading brand in this segment and this force PepsiCo to highly switch brands (Young, 2015). Competing against such a strong brand as Coca-Cola is hard and requires switching brands from now and then which is very risky.

Another weakness is that PepsiCo Inc has a low penetration outside America. Most of the revenue generated by the company comes from the North and South America. This shows that the company has not yet maximized on its potential regarding reaching other markets. Though the company is present in more than 200 countries, the market share in these countries is very low (Young, 2015). Additionally, the company concentrates in the food and beverage industry. The company has not diversified its products, and it is vulnerable to risks in the food and beverage market.

In recent years, the consumers are becoming very health conscious. With the high increase in diseases such as obesity, people are very considerate of what they eat and drink. PepsiCo Inc has yet not managed to market its products to the health conscious consumers (Young, 2015). The marketing endeavors are mostly directed to the non-conscious consumers.

Opportunities

PepsiCo Inc has opportunities for growth globally. A major opportunity is product diversification. There are many other industries that the company can venture in. By acquiring complementary firms not in the beverage industry, the company can be able to diversify its business. Another opportunity is that PepsiCo Inc should increase its efforts in the developing countries. The developing countries are an emerging market that the company can tap into. By penetrating into such countries the company will be able to increase its revenues outside America.

The company has an opportunity to form alliances with complementary businesses. This will enable the company to increase its market presence (Young, 2015). Again, just like the company has been able to acquire other brands, the endeavors should be increased and many more brands acquired in different regions. In addition, the company has an opportunity to improve its brand image by getting involved in more corporate social responsibility activities in the communities where it operates.

Threats

PepsiCo Inc operates in the food and beverage industry which is faced with some threats. A major threat to PepsiCo Inc is the aggressive competition in the industry. In this industry, the decision of one company affects the other companies. The influence of the Coca-Cola brand is the major threat to PepsiCo Inc (Young, 2015). Through the years; Coca-Cola has managed to create the best brand in the industry. This is a threat to other players in the industry including PepsiCo Inc.

Most of the PepsiCo Inc products are seen by people as unhealthy because of their salt, sugar, and fat content. The healthy lifestyle adopted by consumers in this century is against the products of PepsiCo Inc. in addition; environmentalism poses a threat to the company. Consumers respond negatively to the waste and lifecycle issue raised about the company.

PepsiCo has been accused in the past of being unethical. The products manufactured by PepsiCo Inc have caused health problems in the past. People these days are considering food rich in low calories, natural items and low fat as opposed to processed salty and sugary foods. PepsiCo Inc fought back by producing drinks that are low in sugar content and calories. PepsiCo Inc is making big strides in addressing the heath issue with its products.

The analysis of the strengths of a company is essential in the strategic planning in that it allows the company to have a look at its competitive advantage in the market. The strengths are the vocal point in the operation s and planning of the company. The way a company markets itself depends with its strengths. The company’s strengths are the advantages a company has over the other competitors in the market. It is essential for any company to identify its advantages to remain competitive in the market. In addition, the strengths allow the company to identify the strong areas that can be relied on in times of threats. The strengths reveal the internal capabilities of a company.

It is important for a company to realize that it cannot be good at all things.  Strengths of a company run hand in hand with the weakness of the company. Both the strengths and weaknesses are internal to the company.  By understanding the weaknesses of a company, it becomes easy to deal with them. The company cannot deal with things which are not known. Weaknesses can be approached in different ways, they can be improved to enable the company achieves its objective or they can be termed as part of the overall business of the company (Cole, 2003). The weaknesses can be downplayed or worked on depending with the level of influence. Understanding the possible threats enables the company to come up with effective solutions.

Opportunities are an important part of the strategic plan. Any company grows by identify any opportunities that are available for manipulation. By identifying the opportunities available to a company, a company is able to dram a road map into the future. In any market, competition depends on the available opportunities. Without taking advantage of the available opportunities, the company cannot be competitive I the market. It can also not plan for the future. Growth requires exploitation of any available opportunities. Any strategic plan is meant to enable the company to grow (Cole, 2003). Opportunities allow a company to gain new markets, capital or gain new businesses. In addition, to attain a higher market share, a company needs to be vigilant in exploiting any available opportunities.

Every strategic plan has objectives and goals to be achieved. To measure the success of this strategic plan, it will require the measuring of the achievement of the objectives and goals.  This is a measure of whether the services meet the proposed results as per the plan. It demonstrates the impacts and benefits of the activities undertaken. Another method is quality measures. This is a measure of the effectiveness and improvement in accuracy, courtesy, reliability, responsiveness and competency (Cole, 2003). For PepsiCo Inc the strategic plan is meant to increase productivity and efficiency. The best measure of the success of this strategic plan is outcome measures. This will measures the achievements of the desired outcomes as described in the objectives part of the plan.

As discussed above, PepsiCo Inc has its own strengths, weaknesses, threats and opportunities. By using the strengths to overcome the weaknesses and the opportunities to avert the threats, the company can be able to gain a higher market share in the beverage industry. Both the strengths and weaknesses are internal to the company. The opportunities and threats are however external to the company.

When Caleb Bradham started the company, he had a vision that the company will grow o bigger heights. Though it is agreeable that the company has grown, there is still room for improvement. By applying several tactics such as product diversification, the company can gain a higher market share and increase competitive advantage. However, to achieve this, the strategic plan needs to be reviewed regularly to enable the incorporation of any changes. With the threats such as accusations of unethical behavior, the company needs to utilize its strengths. The company has been in existence for many years and has a wide pool of employees with diverse experiences. Though its competitors including Coca Cola, Rebbull, Living Energy and Hansen Natural Corporation are also working to be more productive, PepsiCo Inc has its opportunities as guided by its strengths.

References

Cole, G. A. (2003). Strategic management: Theory and practice. London: Thomson learning.

Gamble, J., & Thompson, A., (2013). Essentials of strategic management: The Quest for Competitive Advantage. New York: McGraw-Hill/Irwin.

Penzkofer, A. (2007). The Market of Pepsi/PepsiCo. California:  GRIN Verlag.

The Statistics Portal. (n.d.). Market share leading carbonated beverage companies worldwide, 2015 | Statistic. Retrieved April 24, 2016, from http://www.statista.com/statistics/387318/market-share-of-leading-carbonated-beverage-companies-worldwide/

Young, J. (2015, December 02). PepsiCo SWOT Analysis & Recommendations – Panmore Institute. Retrieved April 11, 2016, from http://panmore.com/pepsico-swot-analysis-recommendations

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