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m Pepsi-Cola was created in the late 1890s by Caleb

Bradham, a New Bern, N.C. pharmacist.

m Caleb Bradham first formulated Pepsi Cola in 1898 in
New Bern as a cure for indigestion.
m He registered the trademark in 1903 and developed a
system of bottling franchises.
m Pepsi Cola showed strong signs of growth when Donald
Kendall became CEO in 1963.
 he PepsiCo-2005 case study has several issues
revolving it. It has the internal issue that :

PepsiCo has not been able to consistently meet its growth

goal of 15+ percent annual increase in earnings for the last
10 years.

Itsexternal issues consist of its products as reaching

maturity stage industry wise and its divisions, except Frito-
Lay North America (FLNA), fail to rank highest in its
respective market segments.

Division wise, the company holds a large share of each

respective market, but over-all the company sustains a flat
growth rate and fails to meet its growth goal.

m PepsiCo has several strengths that enabled them

to be the third-largest food and beverage company
in the world

m having a well-built distribution channel is also a

great strength, since it is important that your
customers have easy access to your product in
order for it to turn into sales.
m It has the strength to respond quickly o emerging trends
and issues such as health and environmental issues and
the development of the ³PEPSI Generation´.
m PepsiCo were able to penetrate the international market
by focusing more on the emerging markets.


m Lack of focus was the main weakness of PepsiCo.

m Diversified product range made it difficult to concentrate

on all its product unlike its competitor coke which focus
on one product line.

m One of the opportunities that can be quickly seen

is the company¶s efforts in penetrating the
emerging markets of PepsiCo International (PI).
m Pepsi generation theme enable them to attract
younger generation and make them life long
Pepsi drinker.
m hey are opportunities in designing new trends
which will help them to appeal to long time
drinkers as well as influence new ones

m Competitors like coke are its main threat.

m Health and environmental issues are also

posing as threat to PepsiCo

m Since most of its competitors are single product

line companies Pepsico will have to compete
with them head on in order to maintain its
market share.
After analyzing different issues that were
mentioned in the case, it is easy to recognize the
main problem/issue of PepsiCo and that issue is
its incapacity to reach its growth goal, which is to
sustain a compound annual growth rate (CAGR) in
earnings per share of 15 percent per year.