PepsiCo: Challenges and Growth Strategies

Running head: STRATEGIC MANAGEMENT 1
Non-Profit Management
Student’s Name
University Affiliation

STRATEGIC MANAGEMENT 2
Strategic Management
Table of Contents
Title Page
Executive summary ........................................................................ 3
Introduction .................................................................................. 3
Organizational overview ................................................................... 4
Organizational corporate governance mechanism ........................................ 5
Sources of cost and differentiation advantage in the industry ......................... 6
Competitor analysis .......................................................................... 8
Value chain analysis to identify sources of competitive advantage .................... 9
VIRO analysis on sources of the competitive advantage ................................ 10
Recommendations on strategies of increasing competitiveness ........................ 12
Conclusion ...................................................................................... 13
References ...................................................................................... 14

STRATEGIC MANAGEMENT 3
Executive summary
The activity of managing an organization is of significant importance, to the extent
that any organization is extremely effective in its operations when it is managed by good
organizational managers and strategists. The well-recognized organizations that have
managed to expand their operations beyond local boundaries and still maintain a high margin
of profitability have specific operational strategies that help them manage to remain
competitive in the global markets. The management of an organization, therefore, determines
whether the organization will remain completely effective in its operation or it is likely to fail
and become less profitable than intended (Wit. & Meyer, 2010). To understand the role of
strategic management in an organization’s success, this paper assesses the PepsiCo
organization and the means through which it has utilized management strategies to manage
remaining effective and competitive in its operations. The paper evaluates the management
mechanisms in this organization, its competitors and the strategies that the management of
the organization has been utilizing to manage to remain profitable despite this high level of
competition that it faces on a daily basis.
Introduction
PepsiCo organization is one of the most effective organizations operating in the drinks
and beverage industry. The organization has managed to achieve its current level of
effectiveness through effective management strategies that its management has instituted
throughout its operation since its establishment in the year 1965. Like all other organizations,
therefore, PepsiCo’s success is associated with good management and leadership throughout
the organization, which enables it to expand its operations beyond local boundaries and still
manage to have success in its operations. Over time, a large number of organizations have
made attempts to join the industry, but it has become extremely difficult for them to manage

STRATEGIC MANAGEMENT 4
to compete with this organization in the industry and obtain a share of its already fully
established market. An assessment of the many management aspects that have helped this
organization achieve its level of effectiveness that it has achieved so far can help in
determining the importance of effectiveness in organizational management. This assessment
is carried out in this paper, which helps in understanding how effectively management
strategies theories can be applied in practice.
Organizational overview
PepsiCo, Inc. is one of the most popular and highly ranked food and beverage
companies in the world. It is based in the United States and was established in the year 1965
after two organizations, Pepsi-Cola Company and Frito-Lay, Inc. merged. Since this
establishment, the organization has been developing significantly through expansion and
acquisition of much other existing organization to the current level that it is today. The
organization’s main acquisition that significantly increased its revenue and general rank is the
acquisition of Tropicana Products a fully known and popular organization which took place
in the year 1998.
An important aspect of this organization is the products that it stocks and sells to a
large number of individuals over time. The first main brand which provides the organization
with a large amount of revenue is the Pepsi Brand. This brand has a large number of drinks
like the Pepsi drink among other products, and it provides more than 15 billion dollars in
revenue for the organization. The Pepsi Brand is thus the main product that the organization
offers to its customers. Other brands that are also important and contributes significantly to
the gains of the organization is the Mountain Dew brand, Gatorade products obtained from
the Tropicana acquisition and the Lay’s Potato chips products. These brands of the
organization are the other brands that also provides a significantly large number of revenue