PepsiCo¶ -2005 Henry H.

Beam
Strategic Management
Mrs.Uzma Bashir Ghaus M. Yasir Habib Nisar Malik Faraz Amjad Malik Munawar Nazia Malik Ayesha Hassan 5875 4507 4769 5173 5977

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Background 
PepsiCo is a world leader in convenient snacks, foods and beverages with sales of $29.3 billion and net income $ 4 billion in 2004,over 153,000 employees and market more than 500 varieties of 200 countries.  The total assets of Pepsi Co are increasing but due to the marginal profit, the return on total asset is also increasing. Net Income also increase 18.1% from 2002 to 2004

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activities to benefit society.Vision:  PepsiCo's responsibility is to continually improve all aspects of the world in which we operate environment. social. 3 . economic ."  Our vision is put into action through programs and a focus on environmental stewardship. and a commitment to build shareholder value by making PepsiCo a truly sustainable company.creating a better tomorrow than today.

4 . We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees.Mission: Our mission is to be the world's premier consumer products company focused on convenient foods and beverages.

sustain a compound annual growth rate in EPS of 15 % next five year.Objective:    Develop a three year business strategic plan for Pepsi Co. we're committed to achieving business and financial success while leaving a positive imprint on society - 5 . At PepsiCo. Pepsi Co. that can best ensure this growth.

our commitment to sustainability and top global talent. With some of the world's most powerful brands.09 % to 2. PepsiCo is positioned to win in the long term.4% Net income increase by 18. Total asset increase by 10.5% from 2003 to 2004 6 .Financial Strength PepsiCo has enjoyed a long history of delivering strong financial growth for shareholders.1% last two year EPS increase by 2.

snacks and nonsnacks food industry. trying to make Pepsi product the ´hipµ beverages for the youth market through diversification. Pepsi Co. they are focusing on beverages. 7 .Present Strategy  Pepsi·s present strategy is unrelated diversification.

Beverages North America (Soft drink)  Pepsi Co International (all products)  Quaker Foods North America (Cereals) 8 .Scope of Division  Frito-Lay North America (Snacks)  Pepsi Co.

8% 1485 1323 24.2% 9091 7.6% 910 475 1.7% 4934 9 .7% 1061 16.1% 470 2.6% 2242 2002 7.0% 24978 6098 11.2% 1464 Total Division 29261 8.5% 7733 2002 6.6% 458 9862 13.6% 8678 12.Revenue and Operating Profit Net Revenue 2004 FLNA PBNA PI 9560 8313 2003 5.0% 7749 QFNA 1526 4.1% 8565 7.0% 1467 0.1% 1690 13.6% 5463 10.7% 2081 1911 13.5% 26969 8.4% 7200 2004 2389 Net Profit 2003 6.

0% 6.0% 2002-03 2003-04 10 9091 2242 2003 9560 2389 2004 Revenue Profit 7.6% 5.0% 4.0% 8.FLNA¶s Revenue and Profit 15000 10000 5000 0 8565 2081 2002 10.0% 0.0% 2.2% Revenue Growth Profit Growth .7% 6.1% 6.

0% 2002-03 2003-04 11 7733 1690 2003 1911 2004 Revenue Profit 13.0% 7.PBNA¶s Revenue and Profit 10000 8000 6000 4000 2000 0 8313 7200 1485 2002 15.4% Revenue Growth Profit Growth .5% 5.8% 10.1% 7.0% 13.0% 0.

0% 8678 1061 2003 1323 2004 9862 Revenue Profit 16.PI¶s Revenue and Profit 15000 10000 5000 0 7749 910 2002 30.0% 20.0% 25.6% Revenue Growth Profit Growth 12.0% 5.0% 15.0% 2002-03 2003-04 12 .0% 0.6% 24.7% 13.0% 10.

0% 2002-03 2003-04 13 1526 1464 458 1467 470 2003 475 2004 Revenue Profit 4.1% .6% Revenue Growth Profit Growth 0.0% 0.0% 4.0% 3.2% 1.QFNA¶s Revenue and Profit 2000 1500 1000 500 0 2002 5.0% 2.0% 2.0% 1.

¶s Revenue and Profit 40000 30000 20000 10000 0 24978 4934 2002 14.0% 10.0% 6.5% Revenue Growth Profit Growth 8.0% 8.6% 8.0% 12.PepsiCo.0% 0.0% 2002-03 2003-04 14 .0% 10.0% 2.0% 4.7% 26969 5463 2003 6098 2004 29261 Revenue Profit 11.

Season·s. well run financially sound and also market leader 15 . Pepsi Co. Dole.Competitive Advantage:  The company·s new Gatorade/Tropicana North America business unit would allow the company to combine the production of Gatorade. Tropicana Twister.

Key Success Factors Beverages (Carbonated & NonCarbonated) Loyalty. image 16 . Taste and product variety .

1% to 31.  PepsiCo.4% for 2002-03 and 8.GAPs  Sales growth on average 16% for 40 years.49% in 2003-04.7%.4% 17 . now it is just 7.  In soft drinks market Pepsi share is decreased by 0. Market share is decreased 0.

 PepsiCo Beverages North America ± In recent years sales of non-carbonated beverages have grown steadily. so FLNA should concentrate on them to increase sales revenue.Opportunities  Frito-Lay North America ± About half of sales is from products introduced in past 3 years. 18 .

Opportunities (cont«)  PepsiCo International ± Snack food businesses are growing fastest in the Asia pacific region so PI should give attention to these market to avail growth opportunity. The opportunity is there to give more attention towards these products. ± Overall carbonated soft drink market has shown less than 1% growth over the past few years and all that growth is came from diet soft drinks and energy drinks. 19 .

such as ready-todrink teas. ± In 2004 more than one-third of PepsiCo¶s sales came from smart spot(no trans fats) products. bottled water. 20 .Opportunities (cont«) ± Consumer has shown an increasing interest in healthy alternatives to carbonated soft drinks. sports drinks and juices.

Thank You 21 .

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