PepsiCo
PepsiCo is one of the largest multinational corporations that offers manufacturing, distribution as well as marketing of soft drink beverages inclusive of grain-based snacks among other products. In the modern-day world, PepsiCo is one of the two leading brands in the category of carbonated drinks, the brand is not only present globally but also enjoys extremely high levels of brand recognition.
Strengths
Therefore, one of the primary strengths of PepsiCo is its brand equity or rather its high brand recognition; which translates to a high market position on a global scale. The corporation ranked 26th, thus among the top 100 brands in the world and 29th in Forbes list, on most valuable brands. In 2017 PepsiCo generated approximately 63 billion in sales and more than 4.8 billion in net income from its sales (PepsiCo Inc., 2017). As a result, according to Information Resources, Inc., in 2017, Coca-Cola and PepsiCo represented about 20% and 23% respectively of the liquid refreshment beverage in the US in terms of retail sales (PepsiCo, 2017). Its extensive global presence is also a competitive advantage as it provides a large market for its products, concerning this, PepsiCo serves more than 200 countries worldwide.
Another strength of PepsiCo is its broad product portfolio, today, PepsiCo produces, markets as well as distributes well over 100 products and has more than 22 brands in the beverage, food and snack industries (Dudovskiy, 2016). Examples of its brands include Tropicana, Cheetos, Pepsi-Cola, Cap'n Crunch, Chester's, Chipsy, and Mountain Dew among other, due to its massive number of brands the corporation earns approximately 1 billion annually, thus in retail sales from its brand products. This strategy of different brand products also enables the company to target a broader group of customers with different preferences and also tastes. In addition, its complementary beverage as well as food portfolio also enables PepsiCo to not only provide its customers with a variety of choices but also drives its costs low (Dudovskiy, 2016).
PepsiCo competitive advantage over its competitors is also promoted by its effective leadership. Under Indra Nooyi, PepsiCo's effective leadership has been a major topic in a large number of case studies for other corporations. Under her leadership, the company has experienced a 5% growth including a solid financial performance over the last few decades (Dudovskiy, 2016). Furthermore, another strength of PepsiCo is its sustainability policies as well as practices, generally, PepsiCo has a very strong commitment to accomplishing all its sustainability plans. Some of its sustainability programs include but not limited to, replenishing water for local watershed and investing in programs that have aided both women and girls in areas that the company operates (Jurevicius, 2016). According to the company's CEO Indra Nooyi, such programs are directly responsible for the company's outstanding performance over the last decade as they have attracted many rewards. The positive publicity associated with the company has to a great extent is a strength that only a few of its competitors can match.
PepsiCo has also a considerable competitive in terms of customer loyalty, concerning this, PepsiCo enjoys an extremely loyal customer base. In the beverage category, PepsiCo's soft drinks have a somewhat iconic taste which enables it to not only attract but also retain its customers. The Company has also maintained a competitive advantage in the bottled water and juices categories. In accordance with its financial reports, the company revealed that approximately 30% of its customers who purchase snack also make considerable purchases on its beverages. In addition, brands such as Tropicana and Mountain Dew also enjoy high customer loyalty levels which is a considerable competitive advantage over its competitors including new market entrants (Dudovskiy, 2016).
Weaknesses
Perhaps one of the greatest weakness of PepsiCo is weaker brand awareness inclusive of the market share in the global beverage market as compared to the Coca-Cola Company. According to the company's financial reports, PepsiCo enjoys about 24% of the US domestic market as compared to 20% by Coca-Cola (PepsiCo, 2017). However, the company only controls about 20% of the global beverage market share while Coca Cola enjoys more than 40% market share (Jurevicius, 2016). As a result, PepsiCo is forced to invest heavily in advertising and also marketing initiatives in order to increase its sales, which, in, turn lowers its profit margin. Increased competition from Coca Cola also lowers the company's customer loyalty levels since most of them end up switching brands quickly.
Another major weakness of PepsiCo is overdependence on both the US-based markets and Wal-Mart. Although PepsiCo has a huge global presence, approximately 56% of the company's revenues are generated from the US such concentration to a great extent makes the company vulnerable to negative impacts associated with changing economic conditions, low sales, as well as labor strikes (Dudovskiy, 2016). In addition, overdependence on the US also makes the company vulnerable to customer exploitation due to the company's lack of bargaining power which can have negative impacts on the company. In addition, another weakness is PepsiCo's overdependence on Walmart, according to the company's financial reports Walmart sales represent about 13% of the company's total revenues, therefore, even a slight decline in Walmart's sales would have negative financial impacts (Dudovskiy, 2016).
Conclusively
Unending lawsuits; which are still ongoing, have contributed greatly in destroying PepsiCo's public image which has been negatively tainted. Such has been the lawsuits on the use of carcinogenic products in most of its drinks, as a result of such lawsuits the company has experienced not only loss of image but also financial losses.
References
PepsiCo, Inc. (2017). Form 10-K Annual Report for the Fiscal Year Ended December 30, 2017. United States Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/77476/000007747618000012/pepsico201710-k.htm#sA53A3993EAB45B9AB10A6E599FA506B6
Dudovskiy, J. (2016). PepsiCo SWOT Analysis. Research Methodology. https://research-methodology.net/pepsico-swot-analysis-2014/
Jurevicius, O. (2016). PepsiCo SWOT analysis. Strategic Management Insight. https://www.strategicmanagementinsight.com/swot-analyses/pepsico-swot-analysis.html
