Pepsico Swot Analysis Essay Example for Free

Pepsico Swot Analysis bear witnessWhen fashioning any investment decision, it is important for a potential investor to gain insight into the attach to. An evaluation of the social clubs strengths, weaknesses, opportunities, and threats ordain help the investor determine if the venture is worth going into (Nickels, McHugh McHugh, 2010). It as well provides details some the internal status of the business and the future growth to expect in the future. SWOT AnalysisConducting a SWOT analysis of PepsiCo leave behind help the telephoner determine where change is possible. If the company is at a bend point, an inventory of its strengths and weaknesses can reveal possibilities. The identified strengths can be built on and use to their full potential and makes can be made to reduce the weaknesses. Potential problems that carry to be intercommunicate or at least recognized atomic number 18 identified. It leave behinding help PepsiCo disc all over what it does well, could improve, whether they are making the most of the opportunities around them, and whether there are any changes in the market that may require changes in the business (Nickels et al., 2010).StrengthsPepsiCo has a diverse product portfolio that includes foods, snacks, and beverages with yearbook gross of over $66 billion. The PepsiCo brands such as Pepsi, Gatorade, Tropicana, Mountain Dew, Lays, Aquafina, Sierra Mist, Fritos, and Quaker stand for quality and are well recognized nursing home names. These brands generate over $1 billion each in annual global sales revenue enhancement which gives PepsiCo an advantage over its competition that have limited product line (Brands, 2012).Lower sales in one product line because of unforeseeable circumstances can be offset with promoting sales from other product line. PepsiCos geographical footprint is another strength of the organization. It currently operates in more than cc countries worldwide which provides PepsiCo with diverse income sources. In 2011, only 50% of the companys revenue came from the United States solely this did not impact PepsiCos over whole revenue growth because of the companys increasing revenue from other parts of the world like Asia, Russia, Europe, and Latin America (The Power of PepsiCo, 2012).WeaknessesWith the diverse portfolio of PepsiCo, not all products produced by thiscompany bear it name and its holdings are still seen by the public as calve entities, not as parts of PepsiCo. Its branding is not obvious and not easily recognized and this is pain sensation the image of the company. One of its most popular brands, Gatorade, recently changed its name to multiple sub-brands such as G Prime 01, and G Series Pro 03 Recover (Edwards, 2011).PepsiCo is gradually losing its credibility because of its lack of stability in management. The company has a high turnover rate and in the last four years, 26 of age(p) marketing managers have resigned and those that are still with PepsiCo have been moved from one brand to another or from one division to another (Edwards, 2012). The revenue of PepsiCo is over dependent on sales to Wal-Mart. In 2011, some 18% of PepsiCos North American net revenue was from sales to Wal-Mart (including Sams Club). As a get out PepsiCo is highly influenced with the business strategies of Wal-Mart (The Power of PepsiCo, 2011).OpportunitiesPepsiCo is investing its resources by expanding its operation in rising foreign markets like China and Russia and developing continents like Africa. With the companys recent purchase of Wimm-Bill-Dann, a Russian food and beverage company with huge market shares in dairy and juice products, PepsiCo will expand spaciously its figurehead in Eastern Europe and Central Asia and is expected to increase its annual sales revenue by $5 billion (Pepsi Absorbs Wimm, 2011).PepsiCo recently signed a partnership reason with Theo Muller, a German dairy company to sell its dairy products in the US starting with yogurt. Peps iCo will also invest in research to create new dairy products for the US market. This is a great opportunity for PepsiCo to increase its future revenue because it is predicted that annual revenue of $9 billion will be generated by 2016 with nearly 100 million American households expected to buy yogurt products (Steinberg, 2012).ThreatsPepsiCo faces a ardent competition from The Coca-Cola Company, its primary competitor in the carbonated beverage category. These two companies havehad a presbyopic history of rivalry since the 1800s with Coca-Cola has a leader for most of the period. PepsiCo recently lost its five-year partnership deal with Dunkin Brands to Coca-Cola. Coca-Cola products will now be offered in 7,000 Dunkin brands outlets instead of PepsiCo products. In January 2012, Dunkin Brands announced the plan to double their outlet stores to 14,000 over the next 20 years. This is a huge revenue loss for PepsiCo (Fisher, 2012). overly in 2010, viands blow overtook Pepsi to beco me the second largest sodium carbonate brand in the Unites States behind Coke, moving Pepsi to third (Theodore, 2012).There has been a steady decline in carbonated drink sales for the past seven years in the US with total sales dropping one percent in 2011. Americans are now turning to healthier food and drinks like bottled pisss to avoid the high sugar contents in soda (Soda gross sales Fall, 2012). Even with the diverse portfolio of PepsiCo, this decline in sales of carbonated soda drinks will have a negative impact on its total revenue.United States federal, State, and local laws and other regulative authority in foreign countries could have a negative impact on the sales and profitability of PepsiCo. PepsiCos marketing, manufacturing, and distribution of its products can be affected as a result of what the government dictates. Also Governmental agencies that exist where PepsiCo operates can impose new labeling, accounting standards, product requirement, marketing practices, and taxation requirement. In California, PepsiCo is required to post a warning label on any product sold that contains a substance that the state has found to cause cancer or birth defect. If this type of law is enacted in other states or foreign countries, it would affect the sales of PepsiCo products (The Power of PepsiCo, 2011).Investor AnalysisAs a result of the SWOT analysis, investing in PepsiCo would yield a positive topic on investment. The analysis shows a strong company with increase in earnings for the past five years. PepsiCos increasing presence in developing countries is most relevant in the decision to invest. With nearly 72% of the worlds processed food consumption in 2050 predicted to behappening in developing countries because of increase in population, this will give PepsiCo a competitive edge.Internal and External StakeholdersThe success or failure of PepsiCo is set by how the wants and needs of its internal and external stakeholders are met. The internal stake holders of PepsiCo are associates, shareholders, and board of directors. The external stakeholders of PepsiCo are consumers, local and foreign communities, retail and food service customers, partners, suppliers, and competitors.PepsiCo meets the needs of its associates by providing a supportive and empowering workplace. The company helps its employees to succeed by helping them develop the skills needed to increase the growth of the company (Talent Sustainability, 2012).The need of the shareholders of PepsiCo is met by striving to deliver top of the line financial performance and providing a high return on their investment (Performance, 2012). In 2011, the dividends paid to PepsiCos shareholders was six percent higher than 2010 ((The Power of PepsiCo, 2011).PepsiCo provides its consumers with a diverse list of products that delivers affordability and great taste. The company has recently begun offering consumers a wide range of firm foods and beverages. Current products are constan tly been improved and new products created to meet the changing needs of consumers (Stakeholders Engagement, 2012).Local jobs are created in the developing countries that PepsiCo operates in. PepsiCo provides support for education through PepsiCo Foundation grants. The company is working to protect the water resources they have used in India and working with nonprofit organizations to promote sustainable agricultural practices (Stakeholders Engagement 2012).Products are delivered directly to retail and food service customers such as grocery stores, gas stations, restaurants, and vending machines. PepsiCoalso assist these stakeholders with marketing services that contributes to the customers growth and profit (Stakeholders Engagement, 2012).ConclusionA companys strength, weaknesses, opportunities, and threats mustiness be analyzed to determine the potential of the return on investment. Even with its weaknesses, PepsiCo is a strong company with earnings growth over the past five year s, and has enough cash on hand to fight its operation. With the new initiatives that PepsiCo is working on, such as expanding its market into developing countries and providing healthier options to its consumers, the company will be able to meet the needs of its stakeholders.ReferencesBrands. (2012) Retrieved fromhttp//www.pepsico.com/Brands.htmlDiet Mountain Dew, Brisk and Starbucks Ready-T0-Drink Beverages Grow to the Billion-DollarBrands for PepsiCo. (2012, January 26) Retrieved fromhttp//seekingalpha.com/news-article/2139612-diet-mountain-dew-brisk-and-starbucks-ready-to-drink-beverages-grow-to-be-billion-dollar-brands-for-pepsico Edwards, J. (2011, June 22). Pepsi Just Cant Stop Pulling the Tab After Shaking Up Management. Retrieved fromhttp//www.cbsnews.com/8301-505123_162-42749107/pepsi-just-cant-stop-pulling-the-tab-after-shaking-up-management/ Edwards, J. (2012, May 10). How Pepsi Management Shuffles Led To Sales Collapse.Retrieved fromhttp//www.businessinsider.com/how-pep sis-management-shuffles-led-to-sales-collapse-2012-5?op=1 Fisher, B. (2012, June 12). Pepsi loses Dunkin, Eyes Emerging Markets. Retrieved from http//beta.fool.com/bobbyfisher/2012/06/12/pepsi-loses-dunkin-eyes-emerging-markets/5599/?logvisit=ysource=eptcnnlnk0000001 Nickels, W. G., McHugh, J. M., McHugh, S. M. (2010). Understanding Business (9thed.). New York, NY McGraw-Hill/Irwin.Pepsi Absorbs Wimm-Bill-Dann. (2011) Retrieved fromhttp//rt.com/business/news/pepsi-absorbs-wimm-bill-dann-333/ Performance. (2012) Retrieved fromhttp//www.pepsico.com/ excogitation/Performance-with-Purpose.html Stakeholder Engagement. (2012) Retrieved fromhttp//www.pepsico.com/Purpose/Overview/Stakeholder-Engagement.html Steinberg, J. (2012, July 11). PepsiCo Expanding Its American Portfolio With Dairy Products.Retrieved fromhttp//seekingalpha.com/article/714491-pepsico-expanding-its-american-portfolio-with-dairy-products Talent Sustainability. (2012) Retrieved fromhttp//www.pepsico.com/Purpose/Talent-S ustainability.htmlThe Power of PepsiCo 2011 Annual Report. (2011) Retrieved from http//www.pepsico.com/annual11/downloads/pep_ar11_2011_annual_report.pdf Theodore, S. (2012, August 13). Diet Coke Enters A New Decade The Carbonated Soft DrinkBrand Has Come A Long Way. Retrieved fromhttp//www.mintel.com/blog/diet-coke-enters-new-decade-carbonated-soft-drink-brand-has-come-long-way Tomlinson, S. (2012, March 3). Soda Sales Fall Faster As Americans Turn To better Options. Retrieved fromhttp//www.dailymail.co.uk/news/article-2118291/Soda-sales-fall-faster-Americans-turn-healthier-options.html