Strategic Analysis Of The Firm: Report About Pepsi Co
Writer to determine which company to choose as soon as possible to tell me that the professor in advance need to be sent！！！Once you've chosen a company please tell me. Let me know!!
Please begin referring to the list of major ESB employers(Excel that I upload) and choose a company you'd like to work for. You can choose any company. I would also encourage you to choose a public company since more information will be publicly available.
Your assignment is to complete a strategic analysis of the firm. The analysis should be based on research on the company (e.g. annual reports, 10K filings, analyst reports, industry reports, etc) and on its industries and markets (e.g. database searches, industry articles, etc). The library's Business Source Complete database is an excellent source of information. You should use at least 5 sources in your analysis and cite these sources at the end of the paper. If you use direct quotations or information, please cite the source of information the the text as well using footnotes or endnotes.
The analysis should be 4-5 pages single spaced. You may not exceed 5 pages of text, but you may add exhibits and tables to support the analysis within an appendix The analysis should contain at a minimum the following components:
1. Executive Summary
2. External Analysis, including a careful identification of the technologies and developments that are likely to affect the firm's long-term competitiveness, and the main opportunities and threats.
3. Internal Analysis, including an assessment of the company's resource and capability strengths and weaknesses in comparison to competitors.
4. Strategic Positioning, including identification of the firm's value proposition in its main product lines vis-à-vis rivals.
5. Financial and Operating Performance, including not only broad trend and benchmark analyses of the firm's performance but identifying metrics pertaining to key aspects of its operation.
6. Diversification and Internationalization Strategy (if appropriate)
7. Disruptive Threats and Entrepreneurial Opportunities that the Firm Needs to Prioritize
8. Overall Strategic Recommendations For Top Management for the Next 3, 5, and 10 Years.
The final text should not exceed 5 pages single spaced, with clearly delineated sections and citations to research that was conducted. It should include both quantitative and qualitative analysis.
The exercise will be evaluated on the following criteria:
1.) Did you use appropriate sources to conduct your research? Does the document have appropriate qualitative and quantitative facts from these sources?
2.) Completeness and depth of strategic analyses, including major components discussed above and in lectures.
3.) Clear and logical strategic plan for the future that builds on analyses of the past and present.
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Pepsi Strategic Analysis
EXECUTIVE SUMMARY
This strategic analysis report about PepsiCo attempts to analyze and evaluate its external and internal environments, Strategic positioning, performance, and internationalization strategy. The report focuses on the competition with Coca Cola, which is the market leader in the soft drinks and beverages industry. However, besides being the second largest company in the industry, Pepsi has emerged to be the largest industry seller across the world and is accepted by majority of the consumers. Therefore, this report analyzes the strategies that are being utilized by PepsiCo to elevate the competition and increase its effectiveness and efficiency. Consequently, it includes the threats and opportunities that the company can work as well as few recommendations on how it can improve its effectiveness and efficiency for better results.
BACKGROUND
Pepsi was first developed in 1880 by Caleb Bradham in New Bern, North Carolina. In 1898, Caleb renamed it to “Pepsi Cola.” As the cola industry continued to grow, Pepsi Cola Company became registered in 1902. In 1931 Pepsi-Cola Company became bankrupt and was acquired by Charles Guft who owned a syrup manufacturing company under the name Loft Inc. in Baltimore, Maryland. Therefore, Loft Inc. acquired Pepsi-Cola Company’s recipe and trademark. In 1941, Loft Inc. absorbed Pepsi and rebranded its name to Pepsi Cola Company and has been operating under the name (commonly referred to as PepsiCo). Since then, PepsiCo has had successful expansions through mergers and acquisitions of various companies such as Quaker Oat Company. Pepsi-Co has five divisions namely: PepsiCo Americas Foods (PAF), PepsiCo Asia, Middle East and Africa (AMEA), PepsiCo Europe and PepsiCo Americas Beverages (PAB). Each division has its own research and development team that strives to match the needs of the local customers.
Vision Statement
PepsiCo’s vision statement is:
“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.” This implies that the company strives to bring a continuous improvement in the food and beverages industry, economy, environment and society at large to promote a healthier living and better future.
Mission Statement
PepsiCo’s mission statement 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 and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.”
EXTERNAL ANALYSIS
Pestel Analysis
Political and Legal Factors
PepsiCo operates in various countries across the world. It has its operations in Asia, America, Africa and Europe. Therefore, it is vital for it to consider the political and legal forces of the country it has established its operations in. In order to comply with the law, it must have a good working policy and internal control procedures in regard to its operations and labor force. Some of the factors that the company needs to consider include, labor union, tax and environmental rules and regulations. For it to develop and have an effective corporate compliance and governance, it must adhere to the rules and regulations of the country it is operating in.
Economic Factors
These factors plays a significant role in any company. If the consumers’ income levels increase, their consumption on the company’s products. Additionally, in case of inflations, the company will experience negative effects since the purchasing power of the consumers will decrease thus consuming less products. Since, PepsiCo has its operations in different countries across the world, the strength of the host nation’s currency has significant impact as well. A decrease in the currency’s strength, gives PepsiCo greater opportunities of exporting to foreign markets.
Social and Environmental Factors
This category comprises the consumer lifestyles. People who have adopted a healthier lifestyle have different consumption patterns. This can act as either an opportunity or threat to the company. Through its corporate social responsibility strategy, PepsiCo can sponsor various societal events such as games to pass a message that it is concerned about the health and welfare of the people. Consequently, the needs of the consumers differ across the age groups thus the company should focus on the age that consumes more soft drinks and snacks. The young generation tend to consume more drinks while adults tend to observe healthier lifestyle, therefore, PepsiCo target market for Pepsi should be the young generation while adults for Quaker Oats. Another consideration for PepsiCo should be the literacy levels of the target market in the different countries since the education level plays a significant role in the formulation of promotional and marketing strategies. It should develop marketing strategies that can create awareness of the existence of its brands based on the target customers’ educational levels. Moreover, PepsiCo should also consider the environmental factors when running its operations as part of its corporate social responsibility.
Technological Factors
The current market trends are being driven by technological advancements. With the nature of the food and beverage industry (capital intensive and competitive), it is important for PepsiCo to be ahead of its competitors in terms of terms of technological breakthroughs. PepsiCo requires well mechanized assembly lines that have been designed to support long productions and are highly flexible. The technological advancements provides new opportunities in the development of marketing strategies. Technological proliferation such as the Internet has opened up the market opportunities for various companies and PepsiCo is not an exception. Therefore, PepsiCo should invest more on Social media and internet campaigns.
Competitive Factors
PepsiCo enjoys the second largest market share after Coca Cola in the food and beverage industry.
Porter’s Five Forces
Bargaining Power of Buyers (High)
The market has a wide variety of substitutes, thus customers are exposed to large varieties of products, which they can choose from. Consumer are price sensitive thus PepsiCo cannot charge premium prices since the customers have a variety of products wh...