Report on PepsiCo's Competitive Advantage and Business Strategy

This report provides a comprehensive analysis of PepsiCo's competitive advantages, focusing on its business details, cost-minimization strategies, and value proposition. The company leverages cost leadership, market penetration, and product diversification, including the acquisition of brands like Quaker Oats and Tropicana, to maintain its competitive edge in the food and beverage industry. The report highlights PepsiCo's focus on customer value through affordable products, brand loyalty, and catering to diverse consumer needs, such as offering healthier options like diet Pepsi. Furthermore, it explores the company's competitive pressures, particularly from Coca-Cola, and suggests launching healthy drinks and varying bottle sizes to cater to different customer segments. The analysis includes feedback from a manager who acknowledges the student's understanding of the competitive landscape and recommends launching healthy drinks to enhance market position. The report references key academic sources to support its findings.

Introduction
This paper presents the competitive advantage of Pepsi Co and discusses all the business details,
costs, values and manager feedback. It is a multinational company dealing with the beverages
and food processing and is considered to be one of the best company in this industry. A broader
range of food and beverage brands have been included by acquisition of Quaker Oats Company
and Tropicana Products.
Business Details
Business Name Pepsi Co.
Business Nature Beverages and Food Processing
Chairman’s name Indra Nooyi
Date of Consultation
Competitive Advantage
The company has a unique competitive advantage compared to other companies. 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.
PepsiCo has another competitive advantage that is not being properly exploited as the company
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 (Kim, K. H., Jeon, B. J., Jung, H. S., Lu, W., &
Jones, J., 2012). This strategy of competitive advantage is linked with cost leadership supporting
the growth of the company.
In order to compete with the company, Coca Cola, it’s rival 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
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. This is what the customers’ value in the business
products of the company.
The business maximizes its 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 (Wilson, R. M., & Gilligan, C., 2012).
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
The business can 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. The company can
make further efficiencies 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
The student has understood the competitive pressures being faced by the company. 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 launching healthy
drinks.
References
1. Kim, K. H., Jeon, B. J., Jung, H. S., Lu, W., & Jones, J. (2012). Effective employment
brand equity through sustainable competitive advantage, marketing strategy, and
corporate image. Journal of Business Research, 65(11), 1612-1617.
2. Wilson, R. M., & Gilligan, C. (2012). Strategic marketing management. Routledge.
3. MacInnis, D. J., Park, C. W., & Priester, J. W. (2014). Handbook of brand relationships.
Routledge.