PepsiCo Strategic Analysis: Five Forces, Ansoff Matrix & Evaluation

This report provides a strategic analysis of PepsiCo, employing Porter's Five Forces framework to assess the competitive intensity within its industry, examining factors such as rivalry among existing firms, the threat of new entrants, the bargaining power of buyers and suppliers, and the threat of substitute products. Furthermore, it explores PepsiCo's corporate strategy options through the Ansoff Matrix, considering market penetration, market development, product development, related diversification, and unrelated diversification, evaluating the benefits, disadvantages, and strategic suitability of each option, ultimately recommending market penetration as the most viable strategy for enhancing market presence and customer satisfaction. The analysis incorporates examples of PepsiCo's past strategic initiatives and emphasizes the importance of digital marketing and customer-centric approaches for sustained growth in a competitive landscape. Desklib offers a platform to explore similar solved assignments and past papers for students.

Title page
Title of the report:
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Template to use for the Assessment 1 - individual report
(This template is to help work through the tasks of the assessment 1. Use the template to address
the tasks and follow the guidance provided - in lectures, seminars, assessment brief and the
template.)
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TABLE OF CONTENTS (Not counted in word count)
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Task – 1: Five Forces analysis
Table -1 Five Forces (not included in the word count)
Force Nature of force (choose
whichever applicable as per
the situation)
Key points (Mention as many
as relevant – show the
situation using relevant
concepts and related data)
Rivalry of competition in
industry
High or Medium or Low 


Threat of new entrants High or Medium or Low 


Threat of buyer power High or Medium or Low 


Threat of substitutes High or Medium or Low 


Threat of supplier power High or Medium or Low 


Supporting discussion: (Included in the word count)
(Use this to discuss the five forces and explain the key points and nature of the force as mentioned
in the table – show correct understanding of each of the force in the context of the given firm’s
industry. Also discuss the implications of each of the force for the given firm)
A. Rivalry of competition
B. Threat of new entrants
C. Threat of buyer power
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D. Threat of substitutes
E. Threat of supplier power
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Task 2: Corporate strategy options using the Ansoff’s matrix
Table – 2: Corporate strategy options and their implications for the given firm
Corporate Strategy options Benefits to the firm(Mention
any relevant key points –
using relevant concepts and
any related data)
Disadvantages for the
firm(Mention any relevant
key points –using relevant
concepts and any related
data)
Market Penetration
 Growth in the market
share
 To reduce the
competition level.
 Introduced 60 ml bottle
(Balakrishnan, 2015).
 High competition level
in the market.
 Boost the cost of the
company.
 Sometimes the company
misses the opportunity.
Market Development
 Enhanced the market
share.
 Introduced Pepsi Blue
 Enhanced sale and
demand of the products
(Amine and Raizada,
2015).
 More resources are
important to grow.
 High risk.
 Enhances cost of
operations.
Product Development
 Enhanced brand image.
 Competed with the local
brands.
 Enhanced quality of the
PepsiCo products.
 If not according to the
needs of the customers
then it can impact the
image of the company.
 Product failure
 External resources
necessary.
Related Diversification
 Diversify by pursuing
the distribution of the
water in relation to
Soda.
 Diversified into the
snack food sector and
considered a “Power of
one” strategy.
 Helped to meeting the
demands of the
customers
 High risk of failure.
 High cost.
 High risk.
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Unrelated Diversification
 Helped the company in
offering the different
segments of the products
in the market.
 The company was able
to the target the new
target audience such as
teenagers and adults.
 More options for the
customers.
 Need time to grow in the
market.
 Incur promotional
strategy.
 Affect the need of the
customers.
Supporting discussion: (Included in the word count)
(Use this section to discuss the corporate strategy options and explain any relevant key points for
benefits or disadvantages to the firm for each of the corporate strategy options – show correct
understanding of each of the corporate strategy optionfor the given firm and discuss the
implications of each of the corporate strategy options for the given firm)
A. Market Penetration
It has been observed that market penetration strategy is considered by PepsiCo. Diet
Pepsi entered into the existing market created by the Diet coke. To penetrate in the
market, the company introduced the bottle of 60 ml of the Pepsi Cola in the market.
The company also focused on the quantity offered in the market. It is analyzed that
PepsiCo introduced family sized bottles and pet bottles in the market. The small
quantity is also offered at low price in the rural market (Balakrishnan, 2015).
B. Market Development
PepsiCo company is focusing on introducing the different products such as Pepsi Blue
was introduced which took the advantage of cricket world cup fever. Also, Diet Pepsi
entered into the existing market in relation to the Diet Coke. This assisted in boosting
the demand of the product in the market and boosted the sale in the highly
competitive market. The Pepsi introduced in the market, resulted in the growing trend
towards the concept of dieting and healthier living. The company also expanded in
different areas such as in America, Asia, Africa and in Middle east (Amine and
Raizada, 2015).
C. Product Development
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The company introduced the products in the market such as natural fruit juice and also
collaborated with Starbicks and Unilever. PepsiCo entered into the cola market to
compete with the local brands and coke is the existent cash cow that will help to boost the
brand image in the market. To develop the product, the company entered into the market
and the benefit attained by the company is related to enhancement in the image of the
company (Rao and Purkayastha, 2017).
D. Related Diversification
This is one of the effective corporate strategies considered by PepsiCo. The company
has been changed from the traditional beverage to the food sector. It is examined that
company was able to diversify by pursuing the distribution of the water in relation to
Soda. The product of the company attained success because the brand name was
translated into another business. On the other hand, PepsiCo also diversified into the
snack food sector and considered a “Power of one” strategy that assisted in meeting
the demands of the similar industries and also the company attained success in both
(Rahman, 2016). The diversification considered by the company helped in
accomplishing the set goals and objectives and also boosted the sale in the market.
E. Unrelated Diversification
In relation to the unrelated diversification, it has been examined that company
considered the lays products to be introduced in the existing market of the PepsiCo
products. This has helped the company in offering the different segments of the
products in the market. Also, through this strategy the company was able to the target
the new target audience such as teenagers and adults (Kaynak and Meulenberg, 2017).
Task 3 – Evaluation of corporate strategies
Table – 3 SAFe evaluations of Corporate Strategy options (not included in the word count)
(Use this table to evaluate, which corporate strategy option(s) are more SAFe using key pointers)
Corporate Strategy
options
Suitable Acceptability Feasibility
Market Penetration  It is one of the
best corporate
strategy in
relation to
PepsiCo
company as
 To maintain
acceptability,
it is important
for the
company to
introduce the
 To maintain
feasibility, it
is important to
have proper
access of
products to
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there are
different
products of the
company that
have good image
in the market
(SAFE).
products
according to
the customer
needs.
the customers
Market Development  Presently, the
company
develop its
customer
base in the
Nigeria
market.
 The products
will be
accepted if it
is offered
according to
the customer
needs.
 This will be
feasible for
that market
where the
products have
attained
growth.
Product Development The products
will be suitable if
it is according to
the target
audience.
 This corporate
strategy will be
acceptable in
market where the
products are
already
introduced.
 The company
has sufficient
resources to
develop the
new products
in the market.


Related Diversification  It will be suitable
if the customers
have awareness
about the
activities of the
company.
 This strategy will
be acceptable as
PepsiCo
diversified into
the snack food
sector and
considered a
“Power of one”
strategy.


 It will be
feasible if
proper
promotional
strategies are
considered.
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Unrelated
Diversification
It is suitable at
the time of
introducing the
new product in
the market.
 This is acceptable
as with the help
of this strategy
the company was
able to the target
the new target
audience such as
teenagers and
adults.
 It will be
feasible where
there is
demand with
low
substitution
rate.
Recommended strategy option and justification:
(Based on the above analysis, recommend the most suitable corporate strategy option and provide
justification for your recommended strategy option)
From the above analysis, it is recommended that the most suitable corporate strategy option
will be market penetration as the company has an opportunity to diversify its product
portfolio in different kinds of categories. The categories can be related to snacks, food and
beverages. This strategy can help the company to boost its market presence and also the
demand of the products can be enhanced if this strategy is considered by the company. It is
important for the company to satisfy the needs of the customers and it can be done if this
strategy is considered by the company. The company should first analyze the different factors
at the time of introducing the new products in the market so that growth can be attained and
also acceptability is one of the major criteria. It is necessary for the company to consider the
acceptability factor before introducing for the products in the market.
This strategy assists the company to offer the different products in the market which can
boost the customer satisfaction towards the products which are offered in the market. Market
penetration corporate strategy in relation to PepsiCo Company assists in the entire growth of
the business operations with the increased sales ratio. The company also focuses on the
aggressive marketing which assists in attracting the customers. It can be considered as the
strategic link related to intensive growth strategy that will also focus reducing the cost of the
products with the large customer base. It has been observed that competition level is also
high which impacts the overall sales. So, at the time of penetrating in the market the different
tools such as digital marketing should be considered by the company so that large market
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share can be grabbed in the competitive market. In the recent era, it is examined that PepsiCo
is practicing this strategy in Nigerian market to seek growth in the market share so to
penetrate in the market, the company introduced the bottle of 60 ml of the Pepsi Cola in the
market Therefore, it can be stated that this is one of the effective strategy that can help to
boost the demand of the products with the market share.
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References
Amine, L.S. and Raizada, D., 2015. Market Entry into the Newly Opened Indian Market:
Recent Experiences of US Companies in the Soft drinks Industry. In Proceedings of the 1995
Academy of Marketing Science (AMS) Annual Conference (pp. 287-292). Springer, Cham.
Balakrishnan, M.S., 2015. PepsiCo MEA: the role of packaging in brand activation. Emerald
Emerging Markets Case Studies, 5(3), pp.1-12.
Kaynak, E. and Meulenberg, M., 2017. Strategic Marketing Objectives in Mergers and
Acquisitions in the Greek Food Industry. In Food and Agribusiness Marketing in Europe (pp.
47-64). CRC Press.
Rahman, K.M., 2016. Strategic Planning and Marketing Models. In Strategic Marketing
Management in Asia: Case Studies and Lessons across Industries (pp. 59-110). Emerald
Group Publishing Limited.
Rao, A.S. and Purkayastha, D., 2017. Sustainable development at PepsiCo. In Case Studies in
Sustainability Management (pp. 77-98). Routledge.
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Appendix (If any)
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