Qualitative Analysis of PepsiCo's Strategic Management Report

This report presents a qualitative analysis of PepsiCo's strategic management, examining both internal and external factors influencing the company's performance. It begins with an overview of PepsiCo's history, vision, and mission, followed by a PEST analysis that assesses the political, economic, social, and technological forces impacting the business. The report then delves into competitive analysis, comparing PepsiCo to key rivals like Coca-Cola and Kraft, and applying Porter's Five Forces model to evaluate the industry's competitive dynamics. An External Factor Evaluation (EFE) Matrix and an Internal Factor Evaluation (IFE) Matrix are utilized to assess opportunities, threats, strengths, and weaknesses. A SWOT analysis synthesizes these findings, leading to strategic recommendations for PepsiCo. The report concludes with a summary of the key insights and implications for PepsiCo's future strategic direction.

RUNNING HEAD: QUALITATIVE ANALYSIS ON THE STRATEGIC MANAGEMENT
OF THE PEPSICO
Qualitative analysis of the strategic management of PepsiCo
Name of the student
Name of the university
Authors note

1QUALITATIVE ANALYSIS ON THE STRATEGIC MANAGEMENT OF PEPSICO
Executive summary
This report states about a qualitative analysis on the PepsiCo. In this report both external as
well as the internal factors is shown and how it is affecting the brand like PepsiCo. Th3e
competitor advantage of PepsiCo is also stated in this report. An analysis of the strength,
weakness, opportunity and threats is also done in this report. A complete study regarding the
qualitative analysis is been conducted about the strategic management.

2QUALITATIVE ANALYSIS ON THE STRATEGIC MANAGEMENT OF PEPSICO
Table of Contents
Introduction................................................................................................................................3
Vision and mission statement.....................................................................................................4
PEST Analysis...........................................................................................................................4
Competitive analysis..................................................................................................................6
Porters five forces model...........................................................................................................7
External Factor Evaluation Matrix.............................................................................................9
Internal analysis.......................................................................................................................11
Strengths...............................................................................................................................11
Competitive advantages of the PepsiCo...................................................................................12
Weakness..............................................................................................................................12
Internal factors evaluation matrix............................................................................................13
SWOT Analysis.......................................................................................................................14
Recommendations....................................................................................................................15
Conclusion................................................................................................................................15

3QUALITATIVE ANALYSIS ON THE STRATEGIC MANAGEMENT OF PEPSICO
Introduction
In 1880 the PepsiCo was founded by Caleb Bradham in North Carolina, USA. The
company got its patent in the year of 1903. The company also went bankrupt in the year
1931. Till now PepsiCo is successfully running its business and they are expanding their
market. PepsiCo has many brands under them. They do their marketing so well that it is
known by every people. In this report, analysis has been done on PepsiCo where it shows
how PepsiCo successfully doing its business apart from having such tough competitors in the
market where they are operating. After Coca-Cola, PepsiCo holds the largest market share in
the beverage sector.

4QUALITATIVE ANALYSIS ON THE STRATEGIC MANAGEMENT OF PEPSICO
Vision and mission statement
Vision statement
The main aim of PepsiCo is to develop the quality of the products in every parts of the
world where they are having their business. Their main target is to create a better tomorrow.
Their vision statement is to improve continuously in the food and beverages sector and with
that in the market as well.
Mission statement
The main of the company is to be the world's best premier consumer goods company
all across the world. As when the company gets any opportunity they give rewards in terms
of finance to those stakes who are investing to them. The things that the company does are to
strive for honesty and integrity. With the existing statement the company has only portrayed
the product and growth of the firm. The ultimate goal of the company is to become the best
consumer goods company and to be the market leader. They will try to sell the goods that will
be of high quality to their customers across the globe. Their aim is to produce the products
safely by using the efficient technologies. The company believes that doing this they will
make them financially strong by earning more profits and with that they can also reward their
investors. The will seek for every opportunities which will be benefitted to their employees.
The company is very much clear about giving correct incentives to their employees. The
company has the goal to train and motivate their employees in such a way so that it will help
the employee to know more about the company where they are working. It will also help
them to gain knowledge about the products that they are manufacturing.
PEST Analysis

5QUALITATIVE ANALYSIS ON THE STRATEGIC MANAGEMENT OF PEPSICO
Political and legal forces
PepsiCo does its in different countries across Europe, America, Asia, and Africa.
Therefore the company needs to take notice of the governance and the legal forces that
working in all those particular countries. The company must have a good policy and terms
with those countries where they are operating. PepsiCo must have good internal control over
the operations and as well as to their employee's incentives to respect the law. There are
certain measures that PepsiCo must look after are the tax laws, labor unions, and the laws that
are there for protecting the environment. To have a good political relationship with the
country the PepsiCo must obey their law.
Economic forces
Many economic factors play a vital role in the business of PepsiCo. If the income
level of a particular country increases then with that the rate of consumption will also
gradually increase. If inflation arises then consumption will gradually decrease. As PepsiCo
is present in every parts of the world. The headquarter of the PepsiCo is in USA. There is
strong value of the dollar that gives a positive impact on them. It also helps PepsiCo for
exporting purposes when the dollar strength decreases.
Social forces
The different pattern consumption is the reason to have a healthy lifestyle. This can
also be a threat or an opportunity for PepsiCo. Pepsico with its sponsorship spreads a
message to all its consumers that they are concerned about their health. There different age
groups with different need criteria. PepsiCo also targets those customers for whom the
company can satisfy their needs(Bandy et al 2020). For the young generation, their target
products are Lays and Pepsi. They have targeted the adults by Quicker oats because it is
healthy for them. PepsiCo spends money on the education of the poor because this PepsiCo
does its promotion and marketing. They make promotional campaigns so that their brands get

6QUALITATIVE ANALYSIS ON THE STRATEGIC MANAGEMENT OF PEPSICO
properly identified. They are also concerned about the natural factors of the environment and
the company respect every community where they are operating their business.
Technological forces
PepsiCo is the company who never comes behind of the curve in the field of
technology. The company should have a high-level technology for both short term and long
term productivity. Due to the growth of technology, it will benefit the company with new
opportunities and PepsiCo can imply many marketing strategies with the help of
technologies. The increase of use of the internet will also help them to market their product
on online platforms.
Competitive analysis
In the beverages sector, PepsiCo is second in the market share in the entire market. In
the following table the comparison of PepsiCo’s market with Coca-Cola and Kraft are shown
below:
PepsiCo Coca Cola Kraft
Market Cap 108.85B 168.19B 27.45B
Employees 297 146,2 N/A
Qtrly Rev
Growth(yoy)
-0.05 0.01 0.03
Revenue(ttm) 65.70B 47.60B 18.88B
Gross margin(ttm) 0.52 0.60 0.33
EBITDA(ttm) 12.59B 13.01B 3.53B
Operating
margin(ttm)
0.15 0.23 0.17
Net income(ttm) 5.92B 8.80B 1.94B
EPS(ttm) 3.76 1.91 3.28
P/E(ttm) 18.74 19.60 14.14
PEG(5 years
expected)
4.07 2.30 2.58
P/S(ttm) 1.65 3.55 1.46

7QUALITATIVE ANALYSIS ON THE STRATEGIC MANAGEMENT OF PEPSICO
From the table above, the analysis is completely shown that it can be concluded that the
opportunities for PepsiCo are high when it comes to new products. They can do market
penetration easily. It can also be operational in the industry which is fast growing and goes
with the new trends. The social media promotion advantages are also there for PepsiCo. The
company also has a good position to work with many strong brands as a partnership like
Starbucks(Love 2019). On the other hand, they have a strong force from the competitor.
Their top competitor is Coca Cola which is the market leader. With the growth of the
beverages industry, there will be the entry of new competitors. Some health issues are
concerned with PepsiCo.
Porters five forces model

8QUALITATIVE ANALYSIS ON THE STRATEGIC MANAGEMENT OF PEPSICO
Analysis:
Rivalry among the existing competitors: VERY HIGH
The diversification of the market is where PepsiCo is operating is very high.
Many companies are operating in this market (Maamoun 2020). At the present the competitor
of PepsiCo is Coca-Cola and the other competitors provides a huge number of products under
its own brand. Both and Coca-Cola and Pepsi dominate the whole beverage market. They are
both involved heavily in sponsoring many festive and sports events(Håkansson, L., 2018).
Bargaining power of the buyers: HIGH
In the market, there are many products that are substitute of the PepsiCo
products. Therefore there is a high variety of products for the customers to buy. The price of
the product in the beverage sector is very much sensible as the companies cannot increase the
value of the product because of the varieties present in the market. If PepsiCo tries to increase
the price of their products then there is a high chance that the consumer might shift to their
substitute products.
Bargaining
power of
the
suppliers
Rivalry
among the
existing
customers
Threats of
the new
entrants
Bargaining
power of
the buyers
Threat of
substitute

9QUALITATIVE ANALYSIS ON THE STRATEGIC MANAGEMENT OF PEPSICO
The threat of substitutes: HIGH
In the food and beverage sector, many kinds of food and energy drinks are
present in the market. Many companies also produce the same products in the beverage
sector. Coca-Cola is not the only competitor of PepsiCo. There are many other product lines
of PepsiCo where there are many other competitors of the company.
Threats of the new entrants: LOW
In the beverage sector, the entry barrier is relatively low because various
companies are present in the beverage market. The number of multinational groups who are
holding the market share is very less. The initial cost for a company to enter into this market
is high therefore many few companies want to do their into this ssector.
Bargaining power of suppliers: LOW
PepsiCo is dependable for the raw materials they need to make their products but
there are large numbers of suppliers who are ready to provide which makes the bargaining
powerless(Peng et al 2020). The main ingredients that PepsiCo needs to make their products
are carbonated water, sweetener, and caffeine. The suppliers of such are neither concentrated
on differentiation. Any supplier who will get the chance to serve for PepsiCo won’t lose the
opportunity.
External Factor Evaluation Matrix
The following table shows the opportunity analysis of the PepsiCo:
Key External factors Weight Rating Score
Easy new penetration
in the market
0.09 4 0.36
Operate in the fastest
growing industry
0.10 3 0.30

10QUALITATIVE ANALYSIS ON THE STRATEGIC MANAGEMENT OF PEPSICO
Changing social
trends
0.10 3 0.30
Media promotion and
vending machines
0.10 2 0.20
Partnerships with
well-known brands
0.07 2 0.14
Sponsorship to the
worldwide
tournaments
0.09 4 0.36
The following table shows the Threat analysis of the Pepsico:
Threats Weight Rating Score
Strong competition in
every division
0.10 2 0.20
Growth of energy
drinks in the sector
0.08 1 0.08
Mature industry 0.10 2 0.20
Health problems of
the consumers
0.07 2 0.14
Aggressive top
management strategy
by a
competitor(Coke)
0.10 1 0.10
The external factor evaluation matrix holds such lists that are crucial for the organisation. The
above lists only have opportunities as well as threats that PepsiCo has in the market(Tiruwa
Yadav and Suri 2017). The analysis also concludes that PepsiCo is currently not working on
its new opportunities and threats. It also states that PepsiCo must also concern about
environmental factors.

11QUALITATIVE ANALYSIS ON THE STRATEGIC MANAGEMENT OF PEPSICO
Competitive Profile Matrix
PepsiCo Coca-Cola Kraft
Critical success
factors
Weight Rating Score Rating Score Rating Score
Financial
positions
0.15 3 0.45 4 0.60 3 0.45
Advertising 0.15 4 0.60 4 0.60 3 0.45
Market share 0.10 3 0.30 4 0.40 3 0.30
Customer
loyalty
0.20 3 0.60 3 0.60 3 0.60
Price
competitiveness
0.10 3 0.30 3 0.30 3 0.30
Expansions 0.15 3 0.60 4 0.60 3 0.45
Brand image 0.15 4 0.60 4 0.60 4 0.60
Total 1.00 3.30 3.70 3.15
Competitive Profile Matrix identifies the major competitors of the firm that operates in a
particular sector. This analysis also says the position of the company in the market based on
the strength and weaknesses of the company. From the analysis, it can completely be seen
that PepsiCo lies in between Coca-Cola and Kraft Foods(Brownbill Miller, and Braunack‐
Mayer 2018). The advertisement does by PepsiCo creates the attention of every consumer
which is their main target. If the organisation can work on their position in respect of finance
in thesectort and market share then they have a high chance to catch up with coca-cola and
become a market leader. Thus it will help the company to improve themselves in the market.
Internal analysis
Strengths
The strong brand name in the market is the greatest strength of PepsiCo. PepsiCo
is the largest brand in the world and people can easily recognize them by their
name(Faivishenko 2020). The strong brand name helps the company to market its products