Report on PepsiCo: Competitive Pressures and Strategic Recommendations

The assignment is a report analyzing PepsiCo's business strategy and competitive advantages. It examines PepsiCo's cost leadership, market penetration, and customer value propositions. The report identifies PepsiCo's competitive pressures, including those from Coca-Cola, and offers strategic recommendations to improve its market position. The analysis covers areas such as minimizing costs, maximizing customer value, and adapting to changing consumer preferences. It also highlights the importance of promotional offers, product diversification (e.g., low-calorie options), and brand loyalty. The report emphasizes the importance of the business adapting to the health-conscious consumer and introducing healthier options at an affordable price. The student's understanding of competitive pressures and the realism of their recommendations are also assessed.

Engagement : Consultation Exercise
Business Name
Business Nature
Chairman’ s name
Date of Consultation
Pepsi Co.
Beverages and Food Processing
Indra Nooyi
Competitive Advantage
1. What is the unique competitive
advantage of the business?
PepsiCo focuses on minimization of the cost as
their way to improve the overall competitiveness
and financial performance. The company has
special promotional offers with discounted prices.
Further the company is offering new products for
capturing large number of consumers. Pepsi Co
has been developing variants and products like
reduced salt, low-calorie, low-saturated-fat
variants etc.
2. Does the business have another
competitive advantage that is not
being properly exploited?
PepsiCo has implemented market penetration
which supports their business growth and is
considered as the primary intensive growth
strategy. This enables the company to support the
growth of the business and obtaining biggest
market share. This strategy of competitive
advantage is linked with cost leadership

supporting the growth of the company.
3. How should rival business
respond competitively?
Coca Cola has been aiming to bring a revolution in
the market place by providing low rates for the
price conscious consumers. The cost based
strategy has led an intense rivalry among the
competitors.
Value
1. What do customers’ value in the
business’ products and/or
services?
The customers are provided with best taste at a
cheaper value. The product appeals to the youth
and therefore tries to add a cool factor to the
product. The brand name has appealed to the
customers and the celebrity association has
influenced the sales of the product. These have
been a critical factor in building brand loyalty.
2. How does business maximize
value to the customers?
By lowering the cost of their products, the
company has maximized value to their customers
as compared to the marketplace of the competitors.
The company has been providing the products as
per the needs of their customers, like diet Pepsi for
health conscious customers. In this manner, the
company aims to build high level of brand loyalty.
3. How can the value to the
customers be increased?
By catering to the needs of the customers and
keeping in mind their health and lifestyle, the

company can launch additional products which
will appeal to the masses like vitamin-enriched
drink, energy drink etc. at an affordable price.
Additionally, the company should try to come up
with different bottle sizes for catering the needs of
the people.
Costs
How does the business minimize costs to
itself?
The company has set their market prices as per
the needs of the customers without hurting
anyone’s pocket. This has led the company to
enjoy the position of the pioneer of the market
along with minimizing costs to itself.
What further efficiencies could be made? By providing promotional discounts to the
customers from time to time so as to connect
directly with their customers. The company must
now concentrate on the healthy drinks with cost-
effective strategies.
Feedback from Manager
How well has the student understood the
competitive pressures facing the
company? How realistic are the student’s
recommendations?
The students has presented various useful
recommendations and has completely understood
the competitive pressures faced by Pepsi Co,
especially from Coca Cola Company. As the
company has been targeted against for launching
soft drinks, it must now concentrate towards