Pepsico Swot Analysis Essay Example for Free

Pepsico Swot Analysis Essay When making any investment decision, it is important for a potential investor to gain insight into the company. An evaluation of the company’s strengths, weaknesses, opportunities, and threats will help the investor determine if the venture is worth going into (Nickels, McHugh McHugh, 2010). It also provides details about the internal status of the business and the future growth to expect in the future. SWOT Analysis Conducting a SWOT analysis of PepsiCo will help the company determine where change is possible. If the company is at a turning point, an inventory of its strengths and weaknesses can reveal possibilities. The identified strengths can be built on and used to their full potential and makes can be made to reduce the weaknesses. Potential problems that need to be addressed or at least recognized are identified. It will help PepsiCo discover what it does well, could improve, whether they are making the most of the opportunities around them, and whether there are any changes in the market that may require changes in the business (Nickels et al., 2010). Strengths PepsiCo has a diverse product portfolio that includes foods, snacks, and beverages with annual revenue of over $66 billion. The PepsiCo brands such as Pepsi, Gatorade, Tropicana, Mountain Dew, Lay’s, Aquafina, Sierra Mist, Fritos, and Quaker stand for quality and are well recognized household names. These brands generate over $1 billion each in annual global sales revenue which gives PepsiCo an advantage over its competition that have limited product line (â€Å"Brands,† 2012). Lower sales in one product line because of unforeseeable circumstances can be offset with promoting sales from another product line. PepsiCo’s geographical footprint is another strength of the organization. It currently operates in more than 200 countries worldwide which provides PepsiCo with diverse income sources. In 2011, only 50% of the company’s revenue came from the United States but this did not impact PepsiCo’s overall revenue growth because of the company’s increasing revenue from other parts of the world like Asia, Russia, Europe, and Latin America (â€Å"The Power of PepsiCo,† 2012). Weaknesses With the diverse portfolio of PepsiCo, not all products produced by this  company bear it name and its holdings are still seen by the public as separate entities, not as parts of PepsiCo. Its branding is not obvious and not easily recognized and this is hurting the image of the company. One of its most popular brands, Gatorade, recently changed its name to multiple sub-brands such as â€Å"G Prime 01,† and â€Å"G Series Pro 03 Recover† (Edwards, 2011). PepsiCo is gradually losing its credibility because of its lack of stability in management. The company has a high turnover rate and in the last four years, 26 senior marketing managers have resigned and those that are still with PepsiCo have been moved from one brand to another or from one division to another (Edwards, 2012). The revenue of PepsiCo is over dependent on sales to Wal-Mart. In 2011, approximately 18% of PepsiCo’s North American net revenue was from sales to Wal-Mart (including Sam’s Club). As a result PepsiCo is highly influenced with the business strategies of Wal-Mart (â€Å"The Power of PepsiCo,† 2011). Opportunities PepsiCo is investing its resources by expanding its operation in emerging foreign markets like China and Russia and developing continents like Africa. With the company’s recent purchase of Wimm-Bill-Dann, a Russian food and beverage company with huge market shares in dairy and juice products, PepsiCo will expand greatly its presence in Eastern Europe and Central Asia and is expected to increase its annual sales revenue by $5 billion (â€Å"Pepsi Absorbs Wimm,† 2011). PepsiCo recently signed a partnership agreement with Theo Muller, a German dairy company to sell its dairy products in the US starting with yogurt. PepsiCo will also invest in research to create new dairy products for the US market. This is a great opportunity for PepsiCo to increase its future revenue because it is predicted that annual revenue of $9 billion will be generated by 2016 with nearly 100 million American households expected to buy yogurt products (Steinberg, 2012). Threats PepsiCo faces a strong competition from The Coca-Cola Company, its primary competitor in the carbonated beverage category. These two companies have  had a long history of rivalry since the 1800s with Coca-Cola has a leader for most of the period. PepsiCo recently lost its five-year partnership deal with Dunkin’ Brands to Coca-Cola. Coca-Cola products will now be offered in 7,000 Dunkin’ brands outlets instead of PepsiCo products. In January 2012, Dunkin’ Brands announced the plan to double their outlet stores to 14,000 over the next 20 years. This is a huge revenue loss for PepsiCo (Fisher, 2012). Also in 2010, Diet Coke overtook Pepsi to become the second largest soda brand in the Unites States behind Coke, moving Pepsi to third (Theodore, 2012). There has been a steady decline in carbonated drink sales for the past seven years in the US with total sales dropping one percent in 2011. Americans are now turning to healthier food and drinks like bottled waters to avoid the high sugar contents in soda (â€Å"Soda Sales Fall,† 2012). Even with the diverse portfolio of PepsiCo, this decline in sales of carbonated soda drinks will have a negative impact on its total revenue. United States federal, State, and local laws and other regulatory authority in foreign countries could have a negative impact on the sales and profitability of PepsiCo. PepsiCo’s marketing, manufacturing, and distribution of its products can be affected as a result of what the government dictates. Also Governmental agencies that exist where PepsiCo operates can impose new labeling, accounting standards, product requirement, marketing practices, and taxation requirement. In California, PepsiCo is required to post a warning label on any product sold that contains a substance that the state has found to cause cancer or birth defect. If this type of law is enacted in other states or foreign countries, it would affect the sales of PepsiCo products (â€Å"The Power of PepsiCo,† 2011). Investor Analysis As a result of the SWOT analysis, investing in PepsiCo would yield a positive return on investment. The analysis shows a strong company with increase in earnings for the past five years. PepsiCo’s increasing presence in developing countries is most relevant in the decision to invest. With nearly 72% of the world’s processed food consumption in 2050 predicted to be  happening in developing countries because of increase in population, this will give PepsiCo a competitive edge. Internal and External Stakeholders The success or failure of PepsiCo is determined by how the wants and needs of its internal and external stakeholders are met. The internal stakeholders of PepsiCo are associates, shareholders, and board of directors. The external stakeholders of PepsiCo are consumers, local and foreign communities, retail and food service customers, partners, suppliers, and competitors. PepsiCo meets the needs of its associates by providing a supportive and empowering workplace. The company helps its employees to succeed by helping them develop the skills needed to increase the growth of the company (â€Å"Talent Sustainability,† 2012). The need of the shareholders of PepsiCo is met by striving to deliver top of the line financial performance and providing a high return on their investment (â€Å"Performance,† 2012). In 2011, the dividends paid to PepsiCo’s shareholders was six percent higher than 2010 ((â€Å"The Power of PepsiCo,† 2011). PepsiCo provides its consumers with a diverse list of products that delivers affordability and great taste. The company has recently begun offering consumers a wide range of healthy foods and beverages. Current products are constantly been improved and new products created to meet the changing needs of consumers (â€Å"Stakeholders Engagement,† 2012). Local jobs are created in the developing countries that PepsiCo operates in. PepsiCo provides support for education through PepsiCo Foundation grants. The company is working to protect the water resources they have used in India and working with nonprofit organizations to promote sustainable agricultural practices (â€Å"Stakeholders Engagement’† 2012). Products are delivered directly to retail and food service customers such as grocery stores, gas stations, restaurants, and vending machines. PepsiCo  also assist these stakeholders with marketing services that contributes to the customers’ growth and profit (â€Å"Stakeholders Engagement,† 2012). Conclusion A company’s strength, weaknesses, opportunities, and threats must be analyzed to determine the potential of the return on investment. Even with its weaknesses, PepsiCo is a strong company with earnings growth over the past five years, and has enough cash on hand to maintain its operation. With the new initiatives that PepsiCo is working on, such as expanding its market into developing countries and providing healthier options to its consumers, the company will be able to meet the needs of its stakeholders. References Brands. (2012) Retrieved from http://www.pepsico.com/Brands.html Diet Mountain Dew, Brisk and Starbucks Ready-T0-Drink Beverages Grow to the Billion-Dollar Brands for PepsiCo. (2012, January 26) Retrieved from http://seekingalpha.com/news-article/2139612-diet-mountain-dew-brisk-and-starbucks-ready-to-drink-beverages-grow-to-be-billion-dollar-brands-for-pepsico Edwards, J. (2011, June 22). Pepsi Just Can’t Stop Pulling the Tab After Shaking Up Management. Retrieved from http://www.cbsnews.com/8301-505123_162-42749107/pepsi-just-cant-stop-pulling-the-tab-after-shaking-up-management/ Edwards, J. (2012, May 10). How Pepsi Management Shuffles Led To Sales Collapse. Retrieved from http://www.businessinsider.com/how-pepsis-management-shuffles-led-to-sales-collapse-2012-5?op=1 Fisher, B. (2012, June 12). Pepsi loses Dunkin, Eyes Emerging Markets. Retrieved from http://beta.fool.com/bobbyfisher/2012/06/12/pepsi-loses-dunkin-eyes-emerging-markets/5599/?logvisit=ysource=eptcnnlnk0000001 Nickels, W. G., McHugh, J. M., McHugh, S. M. (2010). Understanding Business (9th ed.). New York, NY: McGraw-Hill/Irwin. Pepsi Absorbs Wimm-Bill-Dann. (2011) Retrieved from http://rt.com/business/news/pepsi-absorbs-wimm-bill-dann-333/ Performance. (2012) Retrieved from http://www.pepsico.com/Purpose/Performance-with-Purpose.html Stakeholder Engagement. (2012) Retrieved from http://www.pepsico.com/Purpose/Overview/Stakeholder-Engagement.html Steinberg, J. (2012, July 11). PepsiCo Expanding Its American Portfolio With Dairy Products. Retrieved from http://seekingalpha.com/article/714491-pepsico-expanding-its-american-portfolio-with-dairy-products Talent Sustainability. (2012) Retrieved from http://www.pepsico.com/Purpose/Talent-Sustainability.html The Power of PepsiCo – 2011 Annual Report. (2011) Retrieved from http://www.pepsico.com/annual11/downloads/pep_ar11_2011_annual_report.pdf Theodore, S. (2012, August 13). Diet Coke Enters A New Decade: The Carbonated Soft Drink Brand Has Come A Long Way. Retrieved from http://www.mintel.com/blog/diet-coke-enters-new-decade-carbonated-soft-drink-brand-has-come-long-way Tomlinson, S. (2012, March 3). Soda Sales Fall Faster As Americans Turn To Healthier Options. Retrieved from http://www.dailymail.co.uk/news/article-2118291/Soda-sales-fall-faster-Americans-turn-healthier-options.html

Brand Tracking Survey Essay -- Business and Management Studies

Brand Tracking Survey This is a brand tracking survey that Steinlager beer might use. You will see where you can insert your own product category and brand name. Notice how the questions go from broad to specific. Keep that format if you add your own questions. Keep all of these questions! Be aware that in some situations, brand tracking may be concerned with which products the brand reminds consumers of (when the brand is on multiple products), instead of which brands the product reminds people of (as we do here). Parts of this survey come from: Keller, Kevin Lane (1998), Strategic Brand Management: Building, Measuring, and Managing Brand Equity, New Jersey: Prentice Hall, p382-383. You would conduct this kind of survey by telephone or in person. The interviewer can complete the questionnaire[1]. Alternatively, give respondents a printed copy to complete, but save any pages that mention the target brand until they have completed the first part. Always begin with an introduction that tells who you are, what you are doing and what you will ask them to do. Use one like the one provided here. Introduction Information for Participants â€Å"I am conducting a short interview on consumer opinions about certain products. This is part of my study about brands at the Waikato Management School. I’m in Dr Carolyn Costley’s class on Brand Strategy. The questions will take about ten minutes. You do not have to answer them. If you do, I will combine your res...

Industrial Economic Research Paper

Qustion1 Identify and explain the market structure in which the company is operating Pos Malaysia Market structure * Monopoly firm Introduction (Pos Malaysia) Pos Malaysia Berhad is Malaysia’s premier physical communications provider. Pos Malaysia also has a widespread network of 701 post offices all over the country, in addition to its network of mini post offices, mobile post offices, postal agents and stamp agents, making it one of the most extensive retail networks in Malaysia.Pos Malaysia’s Strategic Business Units that aim to provide quality, reliable, timely and innovative solutions to its customers, are made up of PosMel (mail and postal services), PosLaju (courier and express mail services), and PosNiaga (retail business services). Pos Malaysia also acts as a counter collection and payment agency for a range of financial transactions, such as bill payments, remittance, insurance and unit trusts. Pos Malaysia consists of 3 Main Core Business Units: Pos Mel ,Pos Laju and Pos Niaga. Poslaju or EMS service caters to all segments of the business community and the general public.There are 37 Poslaju Centres nationwide offer all types of courier services. Besides Mail and Express servicer. Poslaju or EMS service caters to all segments of the business community and the general public. Type of courier services Inbound Logistics * Customs Clearance, Import permit documentation, Transportation, Warehousing, Distribution channel/break bulk, Proof of delivery, Track and trace. Outbound Logistics * Customs clearance ,Export documentation ,Transportations ,Warehousing ,Distribution channel/break bulk ,Proof of delivery ,Track and trace Monopoly market structure (Pos Malaysia)Government protection Pos Malaysia Berhad is a Malaysian postal service company that was privatized in 1992 from a government department into a business corporation. Government also protects and helps pos Malaysia if that firm has shortage cost and losses. was attributed to the pos Malaysia is the first company established to provide these services and the company has long operated, known by society and high cost in the provision of post Malaysia. Society loyalty The society in Malaysia has known about brand of pos Malaysia and the society also has familiar to uses pos Malaysia as services of mail.The public will be more confident in such a service as Pos Malaysia is an agency under the ministry and the government is indirectly involved in ensuring the security of the items kept here. Maximize profit A monopoly market exists when there is huge number of buyers but small or very limited number of sellers in the market. Monopoly is the only supplier of a product for which there is no close substitute. In monopoly market, the firm has get a maximize profit, if the manager has have good skill and knowledge to manages that company.For example, pos Malaysia have a good manages, and that means this company can get a height profit. In monopoly market, pos Malaysia can set its own price and the prices chosen affects the quantity it sells. Pos Malaysia is the only licensed mail services provider in Malaysia and is the leader in the Malaysia Courier Services. Pos Malaysia posted a net profit of RM 61 million for the nine months ended September 2004 – an increase of more than 40 per cent from the corresponding period in the previous year.It is projected to earn a net profit of close to RM100 million this year based on existing postal rates. Power of set prices In monopoly market, pos Malaysia can put the price of the service with a high rate to the profit of the community to obtain greater. This can be carried out in the market as pos Malaysia is the only domestic postal mail offered in Malaysia Advantages in monopoly Stability of prices * In a monopoly market the prices are most of the times stable. This happens because there is only one firm involved in the market that sets the prices if and when it feels like.In other types of market struc tures prices are not stable and tend to be elastic as a result of the competition that exists but this isn’t the case in a monopoly market as there is little or no competition at all. Source of revenue for the government * The government gets revenue in form of taxation from monopoly firms. Massive profits * Due to the absence of competitors which leads to high number of sales monopoly firms tend to receive super profits from their operations.The massive profits realized may be used in such things as launching other products, carrying out research and development among many other things that may be beneficial to the firm. Question 2 Comment if there are barriers to entry Definition Barriers to entry are designed to block potential entrants from entering a market profitably. They seek to protect the monopoly power of existing (incumbent) firms in an industry and therefore maintain supernormal (monopoly) profits in the long run.Barriers to entry have the effect of making a mark et less contestable. Defined an entry barrier as â€Å"A cost of producing (at some or every rate of output) which must be borne by a firm which seeks to enter an industry but is not borne by firms already in the industry. Barriers to entry in( pos Malaysia). In pos Malaysia, there are barriers to entry. Among them are: Advertising and marketing * Developing consumer loyalty by establishing branded products can make successful entry into the market by new firms much more expensive. Cost Advantages Lower Costs; through experience of Being in the market for missing time, allows the existing postal company Malaysia’s to cut price and win price wars if another firm enter the market. Absolute cost advantages * Allows an incumbent firm to earn excess profits without feat of new firm entering the market. for example in the market, pos Malaysia price of the service is able to offer a cheaper service player medals RM7 per unit, but other companies likes DHL and FedEx only able to off er prices as low as RM 12 mail service. so its pos Malaysia cans set PRICES at rm10.Which is are more chipper, than the more customer use pos Malaysia services and also get a highest profit. Government Restrictions * Government is the source of barriers to entry that are created by patents and copyrights. But these are not the only barriers to entry enabled by government. Government is, after all, the entity that establishes the rules of the game. Governments frequently erect barriers to entry by legally limiting the number of participants in a market. Legal restrictions for public utilities are usually designed to make the most effective use of natural monopoly markets that can create serious inefficiency problems.Other legal restrictions, such as licenses or charters, are generally intended to pursue other goals, but create barriers to entry nonetheless. For example, pos mel only provided by pos Malaysia. Although there are big rivals like FedEx and DHL outside, but pos Malaysia o ffer cheaper prices. First mover advantages * The first firm to enter incurs lower marketing costs because it faces no rivals. Later firm face higher marketing costs because they must compete against the first firm. If the presence of the incumbent raises the marketing costs of the second firm to enter, then the first firm has permanent advantages and can maintain high prices

Leonardo Da Vinci s The Last Supper - 1658 Words

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