Situational Analysis of PepsiCo: SWOT Analysis, Strengths, Weaknesses, Opportunities, Threats

This document provides a situational analysis of PepsiCo, including a SWOT analysis. It discusses the strengths, weaknesses, opportunities, and threats faced by the company. The analysis highlights PepsiCo's strong brand image, global market presence, and focus on CSR and sustainability. It also addresses the company's weaknesses, such as overdependence on the US market, and explores opportunities for growth through technological innovations and acquisitions. The document concludes with recommendations for PepsiCo to expand its market presence and partnerships.

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Table of Contents
1
.Introduction...............................................................................................................................2
2. Situational analysis.................................................................................................................2
3. SWOT analysis.......................................................................................................................3
3.1. Strength............................................................................................................................3
3.2. Weaknesses......................................................................................................................3
3.3. Opportunities...................................................................................................................4
3.4. Threats.............................................................................................................................4
4. Conclusion..............................................................................................................................4
References..................................................................................................................................5

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1. Introduction
Incorporated in the year 1919 in Delaware, PepsiCo again got reincorporated in the year
1986 in North California. The firm leads global food and beverage industry by holding
complimentary brand portfolio, including Gatorade, Pepsi-Cola and Tropicana. Through
strategic operation, contract manufacturer, authorised bottlers, PepsiCo have made its
marketing, distribution and selling realise net revenues amounting $ 64,661 in the year 2018
(2% higher than 2017). At present, the firm is headquartered in New York city and operates
in more than 200 countries and territories (PepsiCo , 2018).
2. Situational analysis
Situational analysis is used by the firms to identify where they are at present and identify
own strengths and weaknesses related to external opportunities and threats. It is one way that
can help management to select a position in the industry as per identified factors (Blackwell
& Eppler, 2014). Situational analysis of PepsiCo reveals that the firm leads present food and
beverage industry through continuous innovation and effective marketing strategies that made
the firm realise global recognition. Though competition in food industry is fierce, PepsiCo
have added many nutritional and healthy products to gain consumers attention and increased
market share. The investment made in development and technology started bearing enhanced
results for the company and now PepsiCo focuses upon sustainability and CSR to maintain its
global image and reputation (PepsiCo , 2018). However, the increased competition in the
industry have made PepsiCo face tough rivalry with the companies like Coca-Cola and Dr
Pepper Snapple as both the brands have invested huge amount in marketing and other R&D
projects (Kell, 2017).

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3. SWOT analysis
Figure: SWOT analysis (Gurel & Tat, 2017)
3.1. Strength
Strength analysis of PepsiCo reveals that the company holds a strong brand image
worldwide and leads food and beverage industry that make the firm challenge its competitors
efficiently. Not just marketing and distribution strategy of the firm gain’s excellence, but the
effective advertisement strategies of its management have made the firm realise enhanced
financial performance each year. PepsiCo initiatives toward CSR and sustainability alongside
consideration of healthier food products have made its brand popular among consumers
globally. The firm’s distribution network is supported by well-managed by supply chain that
have made the firm expand its market share in various countries (Young, 2017).
3.2. Weaknesses
PepsiCo highly relies upon US market for sales and although being globally established,
most of its revenues are generated from US market only. In 2017, 58% of market share were
noted from US market which shows any sudden fluctuation or disruption in US market can
affect the company sales intensely. To reduce its over dependence on one single market,
PepsiCo needs to release more of its products in global market, especially in developing
nations like India and China (PepsiCo , 2018).

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3.3. Opportunities
There are numerous opportunities for PepsiCo to grow its brand through technological
innovations and effective digitization. For example, the inventory management and supply
chain can be digitized by the firm that will help in managing operations more efficiently.
Considering waste management and water recycling is also an opportunity for PepsiCo that
can gain effective reputation along with popularity. Though PepsiCo have two major areas
where the company had made investment in the past, to maintain strong reputation it can
consider investing more on such initiatives. PepsiCo have always considered acquisitions and
mergers, however considering A&M with companies other than food and beverage industry
can effectively expand its product portfolio (Young, 2017).
3.4. Threats
Regulations and legal compliances have always posed a major threat for the company as
they may result in major fines that can consequently turn profits into loses. Competitive
pressure on food and beverage industry have also led PepsiCo fall under global risk since all
the major brands in similar industry keeps raging and gets intense to gain market leadership.
Moreover, entering new countries have also become tougher for the company due to local
brands that does not allow PepsiCo enter their marketplace. Strong dollar and currency
fluctuations is the most threatening issue that have made company face loses before and has
potentiality in resulting future loses (Muzumdar, 2014).
4. Conclusion
PepsiCo is a global company dealing in food and beverage industry with a strong brand
portfolio, operating with efficient business and corporate level strategies. Few weaknesses
has been seen in its internal management and thus it can be recommended that to grow faster,
PepsiCo must not rely upon single market and can consider making partnerships with foreign
country investors to enter new markets effectually.

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References
Blackwell, R., & Eppler, D. (2014). An Approach to Strategic Situation Analysis: Using
Models as Analytical Tools. The Journal of Global Business Management Volume,
10(1), 80-86.
Gurel, E., & Tat, M. (2017). SWOT Anaysis: A Theoritical Review. The Journal of
International Social Research, 10(51), 994-1006.
Kell, J. (2017). Bottled Water Continues to Take the Fizz Out of Diet Soda. Retrieved from
http://fortune.com/2017/04/19/coca-cola-pepsi-dr-pepper-soda-water/
Muzumdar, P. (2014). A Study of Business Process: Case Study Approach to PepsiCo. SSRN
Electronic Journal , 1-16.
PepsiCo . (2018). 2018 PepsiCo Annual Report. Retrieved from
https://www.pepsico.com/docs/album/annual-reports/2018-annual-report.pdf?
sfvrsn=35d1d2bc_2
Young, J. (2017). PepsiCo SWOT Analysis & Recommendations. Retrieved from
http://panmore.com/pepsico-swot-analysis-recommendations