PepsiCo is a global food and beverage company with $66 billion in sales and 25.65,000 workers. PepsiCo is traded on the NYSE. The corporation is also listed in Amsterdam, Geneva, Chicago, and Tokyo. PepsiCo’s key clients are licensed bottlers, distributors, and retailers. PepsiCo has operations in over 200 countries, with the biggest in North America, Mexico, and the UK. The business mostly sells non-alcoholic drinks and macro foods. They are now the world’s biggest macro snack manufacturer. Their key objective is to expand globally and adapt to changing customer tastes.
SWOT ANALYSIS of PepsiCo
Pepsi is one of the most popular food and beverage brands in the world. This Swot Analysis of PepsiCo includes the company’s strengths and weaknesses, which characterize the company’s abilities and problems. With its worldwide operations the business is able to gain economies of scale, which helps it maintain a strong competitive advantage. In contrast, the external strategic determinants that affect Pepsi’s commercial possibilities and challenges reflect the state of the information technology industry and the industries in which the company competes. Maintaining a competitive edge while developing and maintaining the company in accordance with Pepsi’s capabilities necessitates adopting proper strategies and methods. Following this Pepsi’s SWOT Analysis is essential for long-term development and survival in the face of severe industry shifts.
Strengths of PepsiCo
Brand Awareness
Pepsi being one of the most popular and globally recognized brands in foods and beverages has done an excellent job of building significant brand recognition. (4). Their logo is one of the most well known symbols in the world, and it may be seen on a variety of products. It also assisted them in building a consumer base that was loyal to them. (2).
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Endorsements and sponsorships
The company makes use of celebrity endorsements to help sell its goods. Concerts and athletic events are also a big part of the company’s business. Pepsi is presently sponsoring a number of major sports teams in cricket, football etc.. As a result, Pepsi can better focus its marketing efforts on a younger demographic, which is a key demographic for the company. (1).
Distribution Network
PepsiCo has both a worldwide footprint and a robust supply chain network. One of its greatest strengths is its capacity to guarantee that its goods are available in every corner of the globe. (3).
CSR Activities
Pepsi conducts its corporate social responsibility programs via the PepsiCo Foundation, which works in the fields of education, health, water conservation, and education, among other things. (4).
Weaknesses of PepsiCo
Unhealthy Product
Many of Pepsi’s products are deemed harmful by health professionals. Sugary beverages and salty snacks are often the first things individuals take out of their diets, which means that if more people consider dietary adjustments, sales might decline. (5).
Public Relations Problems
It has been widely reported that Pepsi’s advertising efforts have sparked a major reaction from customers. To prevent public relations disasters that might immediately lead to diminished sales earnings, it is vital that all campaigns be thoroughly thought out. (5).
Sole Focus on Food Industry
PepsiCo has almost 100 different product brands. They are, however, solely involved in the food sector. It’s a good idea to have so many options in a single business. However, they are still essentially placing all of their eggs in one basket. (1)
Failed Products
Sometimes, a firm that depends on a successful core product takes a large risk on a new product. PepsiCo has taken this risk before with Pepsi Crystal and Pepsi Clear, but those bets haven’t paid off for the company. (5).
Opportunities for PepsiCo
Product Diversification
PepsiCo has 22 brands that sell items including sodas, energy drinks, crisps, fruit drinks, etc. But these 22 brands are all in one sector. Its sub-brands often compete against one other. Pepsi might attain considerably more market stability if it expanded into other areas like clothes and sports equipment. To diversify within the food and beverage business, it might provide healthier items. (3).
Focusing More on Consumers for R&D Process
Customers might be asked directly for their thoughts and suggestions on new product offers rather than relying on hired researchers. As simple as creating and expanding focus groups, the corporation might also shift into a specialized consumer testing group that gives frequent feedback and comments on new items in development. For example, this guarantees that customer preferences are taken into consideration when deciding on the next product to debut. (5).
Alliances & Partnerships
PepsiCo already has revenue-sharing agreements in place with Nestle and Starbucks that enable it to sell its goods at those establishments. There may be long-term benefits if the company continues to collaborate with other global companies in this way. (3).
Related Reading: NESTLE SWOT ANALYSIS & STARBUCKS PESTLE ANALYSIS
Threats for PepsiCo
Fierce Market Competition
The food and beverage industry is very competitive, and Coca Cola, the company’s principal market competitor, is a force to be reckoned with in the industry. Both brands have identical product portfolios and use marketing methods that are almost identical to one another. (2).
International Trade Issues
Pepsi must follow by all relevant national and international trade regulations since it has regional headquarters in several countries. For example, restrictions that directly impact production or distribution processes might prohibit items from reaching retail shelves, which is problematic.
Economic Uncertainty
As a result of inflation, economic slowdown, and political instability, consumers’ buying power decreases over time. Moreover, the COVID outbreak has stopped their earning profits for a certain period of time provided that it was not a necessary product and as well as a balanced diet. (4). Additionally, demographic and economic shifts have altered the pre-existing market. (2)
Regulations
Aside from general trade rules, government restrictions may present issues for any firm, but notably one that produces food and beverages. (2). Some governments have even limited the quantity of harmful components allowed in particular food categories or demanded certain disclosures about the final product. (5).
Recommendations for PepsiCo
The PepsiCo SWOT Analysis informs us that brand like Pepsi needs to develop new healthy goods. Also, new non-carbonated beverages with low calorie content and safe for diabetics may be developed.
Additionally, Pepsi must try hard to improve technologically. Besides, they may utilize online platforms where clients can purchase and get things at home. It will need a good supply chain and create new employment, boosting the brand’s image. Furthermore, Pepsi may explore additional partnerships and acquisitions to expand. A good relationship will help them introduce new items and grow their company.
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REFERNCES
- https://pestleanalysis.com/pepsico-swot-analysis/
- https://www.edrawmax.com/article/pepsico-swot-analysis.html
- https://www.marketingtutor.net/pepsico-swot-analysis/
- https://www.mbaskool.com/brandguide/food-and-beverages/2805-pepsi-co.html
- https://brandongaille.com/pepsi-swot-analysis/
