SWOT ANALYSIS OF PEPSICO

SAAD IMRAN
19I-0002 (BBA-B)
Marketing Management
 PRODUCT RANGE 2

SAAD IMRAN (19I-0002) BBA-B

INTRODUCTION
 Currently, the second largest beverage manufacturing firm, Pepsi stands tall
with an annual revenue of $16.09 Billion. In a soda (carbonated) market
which has become more or less saturated, Pepsi tried different variations in
its business models to reach up to the top.

 This SWOT Analysis, shows that why Pepsi is positioned to grow and reach the
top of the food and beverage industry.

SAAD IMRAN (19I-0002) BBA-B 3

STRENGTHS
They are the internal capabilities that may help a
company reach its objectives and also how it
differentiates itself from its competitors. To understand
the SWOT Analysis of Pepsi we need to look at the factors
which are its biggest strengths.

• Strong Brand Image:

Pepsi has a strong brand image and brand recall and
these factors have helped the brand maintain constant pressure on its
competitors. Pepsi also invests heavily on advertising and marketing that
supplements in strengthening the brand image and brand awareness.

• Loyal Customer Base:

Pepsi has a huge loyal customer base. Pepsi is the first
and only choice of the consumers who like its taste.

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• Global Presence and Strong Distribution Network:
Over all these years
of its existence, Pepsi has managed to build a strong Distribution Network.
Present in over 200+ countries, it’s just because of the strong distribution
network that you can get Pepsi even at the most remote places of the world.

• Strong Product Portfolio:

Pepsi owns and distributes a wide range of
products brands. Unlike Coca-Cola which is still a beverage company, Pepsi
diversified its product portfolio and merged with Frito-Lay and owns Quaker
Oats, Tostitos, and other food brands.

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 They are the limitations that may interfere with a
WEAKNESS company’s ability to perform at its optimum level.
These are the areas where the business needs to
improve in order to remain competitive.

• Reliance On Carbonated Drinks:

In developed as well as developing
countries, health-conscious consumers have started to shy away from carbonated
beverages containing high levels of sugars or artificial sweeteners. All these
factors have muted the growth of the beverage industry. High dependency on
sweet carbonated drinks is what is impacting the top line of Pepsi and would
need an immediate course correction.

• Weak Product Portfolio containing healthy options:

Consumer needs and demands are changing and
shifting towards healthy beverages (sports drinks) and foods. Understanding this
shift, Pepsi has slowly and steadily started to introduce new healthy products in
its product line, Gatorade and Tropicana sub-brands which Pepsi introduced as
healthy beverages, Pepsi has also acquired Quaker Oats with an aim to provide
healthy snack options to its customers. 6

SAAD IMRAN (19I-0002) BBA-B

OPPORTUNITIES Opportunities refer to the factors (external)
which the organization can use to its favor to
grow its market share, sales, brand recognition
etc. It’s the second most important factor in
SWOT Analysis of Pepsi as it will shape the future
of the company’s strategy.

• Increasing Demand For Healthy Drinks:

The demand for healthy drinks
and foods is still at its developing stage and is growing rapidly, the need of the
hour is to capitalize on this opportunity and grab the maximum market share.

• Partnerships:
Pepsi can look into increasing the market share by partnering
with other non-competing brands, one such example is Coca-Cola has a strong
partnership with McDonald’s . So something of the same sorts can be looked into
to increase the sales and market share.

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THREATS Threats are the current and emerging external factors
that may challenge the company's performance.
These are the negative external factors that can
effects Pepsi.

• Decline In Consumer Need/Demand For Carbonated Drinks:

With
changing time, consumers are giving up sweetened carbonated drinks and are
moving towards health and energy drinks. This change is demand is likely to
impact the sales of Pepsi as their major chunks of sales come in from carbonated
drinks.

• Heavy Competition From Global And Local Players:

It’s not just Coca-
Cola that Pepsi gets competition from, there are number of local beverage
manufacturers that are trying to eat away the market share of Pepsi. Companies
such as Starbucks and other brands which are not a direct competition of Pepsi,
but have managed to place a dent in the company’s market share.
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SAAD IMRAN (19I-0002) BBA-B

• Weak Product Portfolio:
To meet the changing customer needs, Pepsi has
introduced products/brands that are aimed at meeting the customer needs. The
need of the hour is to advertise and market it aggressively so as to create brand
awareness and brand recall.

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SWOT ANALYSIS of PEPSICO SUMMARY
Strength

1. Brand equity
2. Loyal customer base S
3. Global presence
4. Strong product portfolio 1. Increasing
5. Strong distribution network demand for
healthy products
Weaknesses (foods & drinks).

1. Heavy reliance on carbonated W O 2. Market expansion

through
drinks. partnerships and
2. Lack of product diversification acquisitions.

Threats

1. Decline in demand of carbonated drinks T

2. Heavy competition from both global and
local players.
3. Weak product portfolio of Non- 10

carbonated/drinks and foods. SAAD IMRAN (19I-0002) BBA-B

 THANK YOU

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