Download - Pepsi Co India Strategy
Pepsico entered India in 1989 through a JV with Punjab Agro Ltd. and Voltas
Over the years it has built an expansive beverage and snack foods business
The beverages division includes – 7UP, Aquafina, Duke’s, Gatorade, Mirinda, Mountain Dew, Nimbooz, Pepsi,
Slice &Tropicana
The foods division houses both local and international brands like – Aliva, Cheetos, Kurkure, Lay’s, Lehar Namkeen, Quaker Oats & Uncle Chipps
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.
In everything we do, we strive for honesty, fairness and integrity.
Mission
Vision
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.
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.
Key External FactorsWeights (0.0 -
1.0) Rating (1 - 4)Weighted
ScoreOpportunities
The growing demand for sports drinks, bottled water, and energy drinks 0.18 4 0.72
Growth rate in the carbonated drink market is the largest in Asia when compared to the rest of the world 0.15 2 0.3
Compete aggressively in more than one industry (the salty food industry, and
the breakfast food industry) 0.1 1 0.1Threats
Fierce competition from Coca-Cola, which has the highest market share 0.16 4 0.64
Customers are getting more conscious and concerned about their eating
habits and general health 0.14 3 0.42Concerns of pesticides in carbonated drinks had an impact on their sales 0.14 3 0.42Excess dependence on supplies of
clean water to avoid contamination 0.08 2 0.16Recessionary conditions lead customers
to finding cheaper local substitutes 0.05 2 0.1Totals 1 2.86
Pepsico Coca Cola
Critical Success Factors
Weights (0.0 - 1.0)
Rating (1 - 4)
Weighted Score
Rating (1 - 4)
Weighted Score
Price Competitiveness 0.15 3 0.45 3 0.45
Product Diversity 0.14 4 0.56 4 0.56
Product Quality 0.13 4 0.52 4 0.52
Customer Loyalty 0.12 3 0.36 4 0.48
Sales Distribution 0.12 4 0.48 3 0.36
Advertising 0.11 4 0.44 4 0.44
Company Image 0.11 4 0.44 4 0.44
Financial Position 0.07 3 0.21 3 0.21
Market Share 0.05 3 0.15 4 0.2
Totals 1 3.61 3.66
Key Internal FactorsWeights (0.0 -
1.0) Rating (1 - 4)Weighted
Score
Strengths
Strong Brand Equity 0.15 4 0.6
Diverse Product Portfolio 0.13 3 0.39
Strong Ad campaigns 0.13 4 0.52
Socially responsible 0.12 3 0.36
Continuous Innovation 0.11 4 0.44
Weaknesses
Lower customer loyalty 0.14 1 0.14Expensive to develop new products
continuously 0.12 2 0.24Lower market share for Pepsico as a
whole 0.1 2 0.2
Totals 1 2.89
SO Strategies ST Strategies WO Strategies WT Strategies
(O1,O3,S2,S5) Continue to offer variety or product in various brands.
( O2, S2,S5) Expand and focus on the carbonated drinks and beverage segment
(O1,O3,S1,S2) Respond to the growing demand of sports drinks, bottled water, and energy drinks by expanding product market.
(S1, S3, S4, S5,T1) Innovate Pepsi product line with something that is going to differentiate us from Coca-Cola.
(S2,S5,T2,T3,T4) Innovate products by offering healthier alternatives.
(S1,T1,T5) Offer more promotions or discounts to prevent sales from decreasing.
(S4,S5,T2,T3) Develop more environmentally friendly containers.
(S1,S4,T2,T3,T4) Support environmental issues, such as pollution, which causes water contamination.
(W3,O1,O2) Expand Pepsi sodas product in rural areas
(W1,W3,O1,O3)Improve their sales in the beverage segment by responding to the increasing demand for sports drinks, bottled water, and energy drinks.
(W2,T1,T5) Adjust production of bottles with downturn in economy.
(W1,W3,T1) Produce bigger size of bottles and sale them at the same price as the small one.
(W2,T1,T4) Be responsible and cautious towards supplies of water.
(W1, W2,T1,T5) Increase supply chain production by monitoring cautiously employees and improving workers training.
(W1,W3,T1,T3,T4) Increase presence in rural areas and promoting environmental cause.
IFE Scores
Strong 3.0 - 4.0
Average 2.0 - 2.99
Weak 1.0 - 1.99
EFE Scores
High 3.0 - 4.0
Medium 2.0 - 2.99
Pepsico India
Low 1.0 - 1.99
Division Revenue % Revenue Profit Profit % Market Share Market Growth
Frito-Lay North America $ 13,224.00 31% $ 3,258.00 36% 1 5.42%
Quaker Foods North America $ 1,884.00 4% $ 628.00 7% 1 -0.95%
Latin America Foods $ 5,703.00 13% $ 904.00 10% 1 -3.26%
PepsiCo Americas Beverages $ 10,116.00 23% $ 2,172.00 24% 0.8 -7.51%
Europe $ 6,727.00 16% $ 932.00 10% 0.4 -2.38%
Asia, Middle East & Africa $ 453800 10.6% $ 716.00 8% 0.3 8.97%
PepsiCo India $ 104000 2.4% 430.00 5% 0.2 8.1%
Total $ 43,232.00 100% $ 8,610.00 100%
PEPSICO INDIA
Alternative Strategies IE BCG COUNT
Forward Integration 1 1 2
Backward Integration 1 1 2
Horizontal Integration 1 1 2
Market Penetration 1 1 2
Market Development 1 1 2
Product Development 1 1 2
Related Divesiifcation 1 1
Un Related Diversification 1 1
Horizontal Diversification 1 1
Joint Venture 1 1
Retrenchment 1 1
Divesture 1 1
Liquidation 1 1
Area of Objectives Measure of Target Time ExpectationPrimary
Responsibility
Customers
Customer Satisfaction Customer Surveys Quarterly HR
Employees
Improve efficiency Increase in Production Bi-annually OperationsOffer employee
trainingsSurveys to measure
efficiencyYearly HR
CSR
Eco-friendly company
Increased usage of recyclable bottles
Achieving positive water balance
Yearly CEO
Operations
InnovationNew product developmentAcquisition of new brands
Yearly CEO
Financial
Reduce cost of production &
increase profitabilityIncome statement Quarterly CFO
Launched slew of indigenous products - such as Aliva, Nimbooz, Kurkure
Used Idea and technology of indigenous products in other markets - eg Nimbooz used to launch a Hibiscus-based drink in Egypt
Used India as a low-cost high-quality benchmark for other PepsiCo regions
Product development and related diversification Strategic Alliance with farmer in Punjab and
other states
Customizing the Supply Chain Strategies ranging from sourcing, procurement and distribution
Market development is a strategy that PepsiCo should apply by expanding in rural areas which have not yet been tapped
Use forward integration to acquire smaller companies in domestic market to increase their market share
Innovative and Captive Advertising build a stronger brand than Coke
Develop a healthier more eco-friendly beverage brand Further Customise its food and beverage products to
suit the requirements of the Indian market.