Strategic Management

Company Name: Pepsi Team Name: Am your Wish Department of management sciences The Islamia University Bahawalpur ,

Contents Introduction of Pepsi Vision And Mission Statement Analysis of Mission and vision statement Strength and weaknesses of Pepsi Competitor Analysis External factor evaluation Competitor profile matrix

Introduction of Pepsi About PepsiCo is an American multinational food and beverage corporation headquartered in Purchase, New York, United States, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc. PepsiCo has since expanded from its namesake product Pepsi to a broader range of food and beverage brands, the largest of which include an acquisition of Tropicana in 1998 and a merger with Quaker Oats in 2001 which added the Gatorade brand to its portfolio. As of January 2012, 22 of PepsiCo's product lines generated retail sales of more than $1 billion each, and the company's products were distributed across more than 200 countries, resulting in annual net revenues of $43.3 billion. Based on net revenue, PepsiCo is the second largest food & beverage business in the world. Within North America, PepsiCo is ranked (by net revenue) as the largest food and beverage business. Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006, and the company employed approximately 297,000 people worldwide as of 2011. The company's beverage distribution and bottling is conducted by PepsiCo as well as by licensed bottlers in certain regions. Mission and Vision Statement Mission 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.

Vision 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. Performance with Purpose At PepsiCo, we're committed to achieving business and financial success while leaving a positive imprint on society - delivering what we call Performance with Purpose. Our approach to superior financial performance is straightforward - drive shareholder value. By addressing social and environmental issues, we also deliver on our purpose agenda, which consists of human, environmental, and talent sustainability. PepsiCo Values & Philosophy

Our Values & Philosophy are a reflection of the socially and environmentally responsible company we aspire to be. They are the foundation for every business decision we make. Our Commitment We are committed to delivering sustained growth through empowered people acting responsibly and building trust. Analysis of Mission and vision statement

Sustained Growth Sustained growth is fundamental to motivating and measuring our success. Our quest for sustained growth stimulates innovation, places a value on results, and helps us understand whether today's actions will contribute to our future. It is about the growth of people and company performance. It prioritizes both making a difference and getting things done. Empowered People Empowered people means we have the freedom to act and think in ways that we feel will get the job done, while adhering to processes that ensure proper governance and being mindful of company needs beyond our own. Responsibility and Trust Responsibility and trust form the foundation for healthy growth. We hold ourselves both personally and corporately accountable for everything we do. We must earn the confidence others place in us as individuals and as a company. By acting as good stewards of the resources entrusted to us, we strengthen that trust by walking the talk and following through on our commitment to succeeding together. Guiding Principles We uphold our commitment with six guiding principles. We must always strive to: Care for our customers, our consumers and the world we live in. We are driven by the intense, competitive spirit of the marketplace, but we direct this spirit toward solutions that benefit both our company and our constituents. Our success depends on a thorough understanding of our customers, consumers and communities. To foster this spirit of generosity, we go the extra mile to show we care. Sell only products we can be proud of. The true test of our standards is our own ability to consume and personally endorse the products we sell. Without reservation. Our confidence helps ensure the quality of our products, from the moment we purchase ingredients to the moment it reaches the consumer's hand. Speak with truth and candor. We tell the whole story, not just what's convenient to our individual goals. In addition to being clear, honest and accurate, we are responsible for ensuring our communications are understood. Win with diversity and inclusion.

We embrace people with diverse backgrounds, traits and ways of thinking. Our diversity brings new perspectives into the workplace and encourages innovation, as well as the ability to identify new market opportunities. Balance short term and long term. In every decision, we weigh both short-term and long-term risks and benefits. Maintaining this balance helps sustain our growth and ensures our ideas and solutions are relevant both now and in the future. Respect others and succeed together. Our mutual success depends on mutual respect, inside and outside the company. It requires people who are capable of working together as part of a team or informal collaboration. While our company is built on individual excellence, we also recognize the importance and value of teamwork in turning our goals into accomplishments. Strength and weaknesses of Pepsi

Strengths
1. Product diversity. PepsiCo has several hundreds of brands, which include: carbonated and noncarbonated drinks, water, savory and whole grain-based snacks. Product diversification strengthens PepsiCo because it doesnt have to rely on few key products or seasonal sales and isnt significantly affected by changes in customer tastes. 2. Extensive distribution channel. PepsiCo products are served to more than 10 million stores per week in more than 200 countries. 3. CSR. The firm recognizes its role in a society and engages in education, recycling, water usage reduction, obesity fighting and other projects through PepsiCo Foundation, thus increasing its brand awareness and customer loyalty. 4. Competency in mergers and acquisitions. The key to PepsiCo business growth is its successful mergers and acquisitions of beverage, bottling and snacks companies. PepsiCo acquired such brands as Gatorade, Tropicana, Doritos, Quaker Oats and many others. 5. 22 brands earning more than $1 billion a year. The company doesnt have to rely on one or two of its product to bring most of the revenues. Instead, Pepsi has 22 brands that contribute significantly to its income, serving different industries and satisfying various consumer tastes. 6. Successful marketing and advertising campaigns. More than $2 billion spent on advertising over 2012 resulted in PepsiCos growing market share over its main competitors, including Coca Cola Company, which spent even more on advertising. 7. Complementary product sales. In its annual financial report, PepsiCo revealed one of its studies' results that about 30% of customers who buy its snacks also buy its beverages. PepsiCos decision to diversify its product range is firms competitive advantage too. 8. Proactive and progressive. According to New York Times food industry writer Melanie Warner, PepsiCo, by many critics, is considered to be most proactive and progressive food company.

Weaknesses
1. Overdependence on Wal-Mart. More than 13% of PepsiCo business revenues come from WalMart store chain. Wal-Mart has a significant buyer power and can easily dictate prices over PepsiCo leaving it with very small margins. In addition, if PepsiCo would lose Wal-Mart it would lose 13% of its revenue and competitive advantage. 2. Low pricing. PepsiCo usually prices its products lower than its competitors. Low price is associated with low quality and PepsiCo products are usually perceived as ones. 3. Questionable practices. PepsiCo is using and selling tap water but places view of mountains on its water bottle labels, thus deceiving people that it is mountain spring water when it is not. PepsiCo has also been criticized for using water in India with higher than allowed amount of pesticides in it. 4. Weak brand awareness. The Coca Cola Company has the largest share market of beverages in the world and much stronger brand awareness than Pepsi, placing it at competitive disadvantage. 5. Too low net profit margin. PepsiCos net profit margin is 9.7% compared to Coca Colas 18.55% and Nestls 11%.

Opportunities
1. Growing beverages and snacks consumption in emerging markets. PepsiCo has made large investments in BRIC countries to expand its market share as these countries represent the fastest growing food and beverages markets in the world. If PepsiCo is successful it will increase its revenues and global market share significantly. In addition, it will be able to rely less on US market. 2. Increasing demand for healthy food and beverages. Due to many programs to fight obesity, demand for healthy food and beverages has increased drastically. PepsiCo has an opportunity to further expand its product range with beverages and snacks that have low amount of sugar and calories. 3. Further expansion through acquisitions. So far, PepsiCo has been successful in acquiring other companies and adding new growing brands to its portfolio. 4. Bottled water consumption growth. Consumption of bottled water is expected to grow both in US (PepsiCos largest bottled water market) and the rest of the world. 5. Savory snacks consumption growth. The same opportunity PepsiCo has in growing its revenue selling snacks as this market is also expected to grow.

Threats
1. Changes in consumer tastes. Consumers around the world become more health conscious and reduce their consumption of carbonated drinks, drinks that have large amounts of sugar, calories and fat. 2. Water scarcity. Water is becoming scarcer around the world and increases in both cost and criticism for PepsiCo over the large amounts of water used for production.

3. Decreasing gross profit margin. PepsiCos gross profit margin was decreasing over the past few years and may continue to decrease due to higher water and other raw material costs. 4. Legal requirements to disclose negative information on product labels. Some researches show that particular ingredients, consumed in extra large quantities, in some of PepsiCo products could cause cancer. For this reason, many governments consider to pass legislation that requires disclosing such information on product labels. Products containing such information may be perceived negatively and lose its customers. 5. Strong dollar. More than 50% of PepsiCos income is from outside US. Due to strong dollar performance against other currencies PepsiCos income should fall. 6. Increased competition from Snyders. Snyders increase its US savory snacks market share by 1.6% and almost all of it was taken from PepsiCo.

Competitor Analysis Coca-Cola SWOT Analysis of Coca Cola Strengths Personnel Relations Knowledge Regarding Adversary Accomplished Staff & Benefactor Added Bazaar Allotment in Textile Sector Humans Assurance on Above of our Artifact and Cast

Merchandising and All-around Score Rating (Gives Backbone to brainwash bazaar about convalescent sales) Coca-Cola has been a circuitous allotment of apple ability for a actual continued time.

The product's angel is loaded with over-romanticizing, and this is an angel abounding humans accept taken acutely to heart. The Coca-Cola angel is displayed on T-shirts, hats, and collectible memorabilia. This acutely apparent branding is one of Coca-Cola's greatest strengths. "Enjoyed added than 685 actor times a day about the apple Coca-Cola stands as a simple, yet able attribute of above and enjoyment" (Allen, 1995). Additionally, Coca-Cola's bottling arrangement is one of their greatest strengths. It allows them to conduct business on a all-around calibration while at the aforementioned time advance a bounded approach. The bottling companies are locally endemic and operated by absolute business humans who

are accustomed to advertise articles of the Coca-Cola Company. Because Coke does not accept absolute affairs of its bottling network, its basic antecedent of acquirement is the auction of apply to its bottlers. Lower amount of assembly Demonstrably above annual Presented a actual circuitous artefact

Extensive advertising, acceptable promotions or business programs..don't stop here, accumulate belief your competitors Ask: why do I like spending my money added at some businesses than others?

Weaknesses: Weaknesses for any business charge to be both minimized and monitored in adjustment to finer accomplish abundance and ability in their business's activities, Coke is no exception. Although calm business as able-bodied as abounding all-embracing markets are advancing (volumes in Latin America were up 12%), Coca-Cola has afresh appear some "declines in assemblage case volumes in Indonesia and Thailand due to bargain customer purchasing power." According to an commodity in Fortune magazine, "In Japan, assemblage case sales fell 3% in the additional division [of 1998]...scary because while Japan generates about 5% of common volume, it contributes three times as abundant to profits. Latin America, Southeast Asia, and Japan annual for about 35% of Coke's aggregate and none of these markets are assuming to expectation. Coca-Cola on the added ancillary has furnishings on the teeth which is an affair for bloom care. It as well has got amoroso by which connected bubbler of Coca-Cola may could could could cause bloom problems. Being absorbed to Coca-Cola as well is a bloom problem, because bubbler of Coca-Cola circadian has an aftereffect on your physique afterward few years. Gourmet Strengths: Gourmet has been a main part of Pakistans market for a long time. The product's position is loaded with sloppiness, and this is an position many people have taken it deeply as it has covered the market of Lahore which is considered a most prominent city of Pakistan due which its becoming familiar. It has almost 90 outlets in Lahore so people have to travel a little to get gourmet drinks. This familiar branding is one of gourmets best strengths. It is providing the best quality and enjoyment to their customers and its supply is continuously increasing day by day because of its wide variety of tastes. Furthermore, Gourmets bottling system is one of their extreme strengths. It allows them conduct business in all over the Pakistan; bottling companies are locally measured and controlled by independent business people

who are allowed to sell products of the Gourmet food company. It is just because the Gourmet Company does not have absolute ownership of its bottling network. Weaknesses: It is generally accepted that the weaknesses for any organization require to be both minimised and scrutinized in order to successfully attain effectually and efficiency in their businesss performance, gourmet is no exemption. Although domestic business as well as many others markets of Pakistan are flourishing. Gourmet didnt open its outlets in others major cities like Gujarat, Jhelum, is just because they have low consumer power. Moreover major part of its customers are the universities and colleges which shows that the general public customers are less in number this is because other brands are also available with more market share and goodwill than gourmet. Additionally, Gourmet has an issue of having a teeth problem which cause health problems. It also has got sugar by which constant drinking of Gourmet may also cause health trouble. Being addicted to Gourmet is a health problem, because drinking of Gourmet daily has an effect on your body as well.

Competitor profile matrix