Pepsico Swot Analysis Essay

When making any investment decision, it is important for a effectiveness investor to gain insight into the attach to. An evaluation of the companys strengths, weaknesses, opportunities, and threats will succor the investor determine if the venture is worth going into (Nickels, McHugh & McHugh, 2010). It excessively provides details slightly the internal status of the patronage and the future growth to expect in the future. SWOT AnalysisConducting a SWOT analysis of PepsiCo will assist the company 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 strengthened on and used to their full potential drop and makes can be make to reduce the weaknesses. Potential problems that exact to be addressed or at least recognized ar identified. It will help PepsiCo disc everywhere what it does well, could improve, whether they atomic number 18 making the most of the opportunities around them, and whether there atomic number 18 any changes in the marketplace that may require changes in the business (Nickels et al., 2010).StrengthsPepsiCo has a various(a) product portfolio that includes regimens, snacks, and beverages with annual revenue enhancement of over $66 angiotensin converting enzyme million million. The PepsiCo notices such as Pepsi, Gatorade, Tropicana, Mountain Dew, Lays, Aquafina, Sierra Mist, Fritos, and Quaker stand for quality and are well recognized household reboots. These brands generate over $1 one thousand thousand each in annual global sales revenue which gives PepsiCo an gain over its competition that have limited product line (Brands, 2012). demoralize sales in one product line because of unforeseeable muckle can be offset with promoting sales from another product line. PepsiCos geographical footprint is another strength of the organization. It currently operates in to a greater extent than 200 countries world m assive which provides PepsiCo with different income sources. In 2011, only 50% of the companys revenue came from the United States but this did not opposition PepsiCos overall revenue growth because of the companys increasing revenue from other parts of the world same(p) Asia, Russia, atomic number 63, and Latin America (The billet 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 separate entities, not as parts of PepsiCo. Its branding is not obvious and not tardily recognized and this is hurting the image of the company. One of its most popular brands, Gatorade, tardily 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 stableness in management. The company has a high turnover rate and in the last four years, 26 senior 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, approximately 18% of PepsiCos North American net revenue was from sales to Wal-Mart (including Sams Club). As a result PepsiCo is highly influenced with the business strategies of Wal-Mart (The precedent of PepsiCo, 2011).OpportunitiesPepsiCo is investing its resources by expanding its summons in emerging foreign markets like China and Russia and development continents like Africa. With the companys recent purchase of Wimm-Bill-Dann, a Russian diet and beverage company with huge market shares in dairy and juice products, PepsiCo will expand greatly its presence in Eastern Europe and Central Asia and is expected to increase its annual sales revenue by $5 billion (Pepsi Absorbs Wimm, 2011).PepsiCo lately signed a partnership promise with Theo Muller, a German dairy co mpany to sell its dairy products in the US starting with yogurt. PepsiCo will also invest in query to create brisk dairy products for the US market. This is a great chance 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 strong competition from The Coca-Cola Company, its particular competitor in the carbonated beverage category. These two companies havehad a long history of rivalry since the 1800s with Coca-Cola has a leader for most of the period. PepsiCo recently lost its quintuplet-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). in like manner in 2010, Diet Coke overtook Pepsi to become the second largest soda brand in the Unites States behind Coke, moving Pepsi to third (Theodore, 2012).There has been a calm down decline in carbonated drink sales for the past vii years in the US with total sales dropping one percent in 2011. Americans are now turning to healthier nourishment and drinks like bottled waters to avoid the high sugar contents in soda (Soda Sales nightfall, 2012). Even with the diverse portfolio of PepsiCo, this decline in sales of carbonated soda drinks will have a cast out impact on its total revenue.United States federal, State, and local honors and other restrictive 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 ne w trailing, 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 kingdom 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 return on investment. The analysis shows a strong company with increase in dough for the past five years. PepsiCos increasing presence in development 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. inside and External StakeholdersThe success or failure of PepsiCo is determined by how the wants and call for of its internal and outside stakeholders are met. The internal stakeholders 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 neats the postulate of its associates by providing a supportive and empowering workplace. The company helps its employees to succeed by percentage them develop the skills needed to increase the growth of the company ( natural endowment Sustainability, 2012).The need of the shareholders of PepsiCo is met by striving to deliver top of the line financial operation and providing a high return on their investment (Performance, 2012). In 2011, the dividends stipendiary 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. Th e company has recently begun offering consumers a wide range of healthy foods and beverages. Current products are constantly 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 value the water resources they have used in India and working with nonprofit organizations to get up 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 must 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 years, and has enough cash on hand to maintain 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 goatt 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-pepsis-management-shuffles-led-to-sales-collapse-2012-5?op=1 Fisher, B. (2012, June 12). Pepsi loses Dunkin, Eyes acclivitous Markets. Retrieved from http//beta.fool.com/bobbyfisher/2012/06/12/pepsi-loses-dunkin-eyes-emerging-markets/5599/?logvisit=y&source=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/Purpose/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-ame rican-portfolio-with-dairy-products Talent Sustainability. (2012) Retrieved fromhttp//www.pepsico.com/Purpose/Talent-Sustainability.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 stupefy 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 Healthier Options. Retrieved fromhttp//www.dailymail.co.uk/news/article-2118291/Soda-sales-fall-faster-Americans-turn-healthier-options.html